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Money Buzz 12/05

Limiting investors' partnership power, shrinking health care and more

This story appears in the December 2005 issue of Entrepreneur. Subscribe »

Low-risk investments that yield more than a few percentage points are tough to find these days. But with master limited partnerships, or MLPs, investors can reap up to 10 percentage points over 10-year U.S. Treasuries while taking on relatively minimal risk.

MLP units essentially give investors a limited partnership in an asset--typically in the energy sector, such as shares in an oil or gas pipeline. MLP units trade on major stock exchanges, so you can invest through any brokerage account. Both the nature of the assets and the MLP partnership structure--which requires that a large portion of cash flow be distributed to investors--make them attractive, explains J.C. Frey, an MLP expert at Los Angeles-based investment advisory firm Kayne Anderson.

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