Bill Gross Is Sticking With Pipeline MLPs for High Yields, Underappreciated Tax Benefits

Former bond king Bill Gross remains a fan of master limited partnerships like Energy Transfer and Enterprise Products Partners EPD ↑ +0.33%, saying they have trailed behind pipeline operators structured as corporations in the stock market and have unappreciated tax attributes.

In his latest investment missive, Gross, a co-founder of the big bond manager Pimco and now a private investor, notes that the pipeline partnerships have high yields. Energy Transfer and Enterprise Products are at around 7%, while Kinder Morgan ↑ KMI +0.67% and Williams Cos ↑ WMB +0.31% , two pipelines that are corporations, yield 4%.

Enterprise Products and Energy Transfer have both gained ground this year, with Energy Transfer up about 20%, but Kinder Morgan and Williams are up 40% and 50%, respectively.