Income investors often find it hard to avoid downstream logistics MLPs due to the large distributions that they offer. Distribution yields in the high single- to low double-digits have been especially attractive in the low interest rate environment that has prevailed for more than a decade. As Sprague Resources LP (SRLP) recently demonstrated, though, MLPs also provide investors with a unique set of risks that can force large losses on them during bear markets such as the current one.
Sprague Resources LP is a wholesale supplier of energy products, primarily refined fuels but