However, MLP funds are structured as regular C-Corporations. Consequently, the ETFs pay corporate taxes on profits to meet their tax liability, which weighs on MLP ETFs’ performance.
Morningstar last year was out with a warning on AMLP. Morningstar’s caution flag is related to a complicated tax issue associated with MLPs.
Alps Alerian MLP ETF
For more information on master limited partnerships, visit our MLPs category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own AMLP.