A popular exchange traded note for master limited partnerships has reached the limit on the number of shares outstanding recently set by issuer JP Morgan (NYSE: JPM). As a result, the ETN may begin trading at a premium to fair value if demand remains strong, which could lead to losses unrelated to the movement of the MLP sector for unsuspecting investors.

As of June 20, JPMorgan Alerian MLP Index ETN (NYSEArca: AMJ) had 129 million shares outstanding, which JP Morgan recently set as the maximum. [Cap in Master Limited Partnership ETN May Trigger Premium]

Exchange traded products tracking MLPs have been popular with investors seeking income and diversification. [What You Need to Know About MLP ETFs]

Other exchange traded products for this asset class include Alerian MLP ETF (NYSEArca: AMLP), Yorkville High Income MLP (NYSEArca: YMLP), Global X MLP (NYSEArca: MLPA) and UBS E-TRACS Alerian MLP Infrastructure ETN (NYSEArca: MLPI).

Although they are often lumped together, ETNs have different credit risks than exchange traded funds. ETNs are debt securities issued by financial institutions that promise to pay the return of a particular index, minus fees and taxes. In other words, investors are exposed to the risk that the ETN issuer goes belly-up. [ETNs are Not ETFs]

JP Morgan’s decision to place a size limit on AMJ is another warning sign for ETN investors.

For example, VelocityShares Daily 2X VIX Short-Term ETN (NYSEArca: TVIX) quickly lost 50% of its value earlier this year when its premium collapsed. TVIX issuer Credit Suisse in February suspended the creation of new shares due to size limits. [What Really Happened with TVIX]