This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

6 ETFs to Dump Now

ETF to Dump No. 2: Alerian MLP ETF (AMLP)

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

As I've said before, master limited partnerships, or MLPs, are often a great investment. They typically have high dividend yields and have generated significant capital gains the past few years.

So what's the problem with Alerian MLP (AMLP)?

Well, it is the only ETF on the market that is not a pass-through entity for tax purposes. AMLP is structured as a C corporation, which means it pays 35% federal taxes plus various state taxes on all its gains. The roughly 1,000 other ETFs and ETNs pay none.

The result: AMLP significantly underperforms its competition and its benchmark.

The impact of "tax drag" on this fund is staggering .

The sponsor handles it by clipping off about 37% of each day's price move, leaving investors with only 63%. Investors may also be slammed with additional taxes when they sell their AMLP shares.

While there is no perfect way to access MLPs with exchange-traded products, the way AMLP does it is unquestionably the worst.
3 of 7

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AMLP $15.59 0.00%
EFA $63.98 0.00%
EDV $108.10 0.00%
FXE $108.81 0.00%
IVV $208.59 0.00%

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs