The "2 and 20" structure refers to fees and expenses computed from 2% of the assets and 20% of the profits. For AMLP, the fees and expenses are 0.85% of the assets and about 37% of the profits.
After two months of operation, the Alerian MLP ETF has already incurred expenses of more than 4%. This translates to an annualized rate of 24%, almost double the 12.5% of MacroShares Major Metro Housing, the former record holder of the most outrageous expense ratio.
The Alerian MLP ETF has a stated objective: "The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of its underlying index, the Alerian MLP Infrastructure Index."The following five data points are taken directly from the performance page of the AMLP Website :
- Total Operating Expenses 0.85%
- Alerian MLP ETF gain for September = +3.42%
- Alerian MLP Infrastructure Index gain for September = +5.70%
- Alerian MLP ETF gain for October = +3.17%
- Alerian MLP Infrastructure Index gain for October = +4.99%
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