What: Shares of Kayne Anderson MLP Investment Co. (NYSE:KYN) fell by 15.2% at their nadir today, but have slightly recovered to a 10.5% loss as of 3:40 p.m. EST.

Oil fell below $40 a barrel on Monday, pushing MLP unit prices broadly lower in active trading.

So what: Kayne Anderson MLP Investment Co. is a closed-end fund that held a portfolio of 56 MLP stocks on Oct. 31, concentrating its holdings in publicly traded master limited partnerships. Unlike mutual funds or exchange-traded funds, Kayne Anderson MLP uses leverage to increase its returns, up and down, but the consequence is higher volatility.

The company last reported leverage of nearly 1 times equity when its deferred income taxes are accounted for. The fund had a net asset value (book value) of $19.20 per share when it reported its results on Nov. 30.

The fund's three-largest positions, Enterprise Products Partners (NYSE:EPD), Energy Transfer Partners (NYSE: ETP), and Williams Partners were down 4.4%, 7.5%, 13% today, respectively, on a rout in oil prices.

Now what: Kayne Anderson MLP is only as good as the MLPs backing the fund. Until mid-November, the fund traded at a persistent premium to book value. According to data from Morningstar, that changed on Nov. 16, when the fund's share price fell below net asset value for the first time since 2014.

Given the fund holds MLPs with an added dose of leverage on top, investors are clearly rethinking whether or not it's prudent to have leveraged exposure to an asset class that is already levered to highly volatile oil prices.

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