Beware of MLPs in ETF Wrappers: AMLP

Many investors have been looking forward to the day when they could buy an exchange-traded fund (ETF) containing a basket of Master Limited Partnerships (MLPs).  I am not one of them.  Although I generally prefer ETFs over ETNs (exchange-traded notes), that is not the case when the investments being targeted are MLPs. Earlier this week (on 8/25/10), the Alerian MLP ETF (AMLP) was launched.  It is the first MLP ETF product joining a lineup of five existing MLP ETNs.  I also believe it is the first ETF of any kind that is virtually guaranteed to underperform its chief competitor. Corporate Taxes Before buying AMLP you need to ask yourself why all the other sponsors chose an ETN package over an ETF wrapper.  The answer is taxation.  As noted in the…