Zacks Analyst Blog Highlights: Alerian MLP ETF, JPMorgan Alerian MLP Index ETN and Global X MLP ETF


For immediate release

Chicago, IL – February 16, 2022 – announces the list of stocks featured in the analyst blog. Every day, Zacks Equity Research analysts discuss the latest news and events impacting stocks and financial markets. Stocks recently featured in the blog include: Alerian MLP AMLP ETF, JPMorgan Alerian MLP ETN AMJ Index and Global X MLP MLPA ETF.

Here are the highlights from Tuesday’s analyst blog:

Should income investors view MLP ETFs as inflation spikes?

Income-oriented investors are now looking for assets that can generate high returns to counter inflation. Master Limited Partnerships (MLPs) represent an attractive investment option because in addition to juicy returns, they have relatively stable cash flows and solid growth potential. In addition, they profit from the rise in oil prices.

MLPs are publicly traded partnerships that are involved in natural resource-related activities. Most MLPs hold cash-generating assets and process or transport energy commodities under long-term contracts.

They have relatively constant cash flows, unlike exploration and production (E&P) companies, whose earnings are highly correlated to commodity prices. As they do not pay entity-level taxes, they have very attractive returns.

Additionally, MLPs have low correlations to many other asset classes, including equities and commodities, and thus add diversification benefits to portfolios.

MLPs come with complex tax issues and many investors avoid investing in them solely because of discouraging tax requirements. They issue K-1s and additionally, since pipelines cross multiple states, investors may be required to file tax returns for all of those states in some cases.

Some tax complexities can be avoided by holding them as ETPs. ETP payments are reported as ordinary income on Form 1099, and therefore K-1 forms are not required.

ETFs with more than 25% of their assets invested in MLPs are treated as C corporations for tax purposes. The additional layer of charging results in a tracking error. However, a significant portion of the distributions are tax-deferred. MLP ETFs are therefore more suitable for taxable accounts.

ETNs have no tracking error because they do not hold any securities. However, investors should remember that ETNs are unsecured debt securities and carry credit risk. MLP ETNs are best suited for tax-advantaged accounts, as their distributions are taxed at ordinary income rates.

The Alerian MLP ETF, the largest product in the space, invests in energy infrastructure MLPs involved in midstream businesses. It is structured as a C corporation and does not issue K-1s.

The JPMorgan Alerian MLP Index ETN tracks an index composed of intermediate energy MLPs. The Global X MLP ETF invests in midstream pipelines and storage facilities. Also structured as a C-corporation, it is one of the cheapest ETFs on the market.

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Past performance is not indicative of future results. The potential for loss is inherent in any investment. This document is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold any security. No recommendation or advice is given as to whether any investment is suitable for any particular investor. It should not be assumed that investments in the securities, companies, sectors or markets identified and described have been or will be profitable. All information is current as of the date hereof and is subject to change without notice. The views or opinions expressed may not reflect those of the company as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management of securities. These returns come from hypothetical portfolios composed of stocks with Zacks Rank = 1 that have been rebalanced monthly without transaction fees. These are not the returns of actual stock portfolios. The S&P 500 is an unmanaged index. Visit for more information on the performance figures displayed in this press release.

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Alerian MLP ETF (AMLP): ETF Research Reports

Global X MLP ETF (MLPA): ETF Research Reports

JPMorgan Alerian MLP Index ETN (AMJ): ETF Research Reports

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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