New MLP ETNs Offer Tax Benefits

Oct 9 2013 | 10:12am ET

Investors are flocking to a new kind of exchange-traded note that offers access to master-limited partnerships, but with less of a tax bite.

MLP exchange-traded products have taken in $9.6 billion in new money this year, more than they took in all of last year, Morningstar reports. Much of the attraction can be traced to so-called "second-generation" MLP ETFs that offers less of a tax liability than MLPs, which invest in energy assets, generally feature.

The second-generation products avoid the tax hit by not actually owning most of the MLPs they track, The Wall Street Journal reports. If the products keep their MLP ownership to below 25%, they do not carry corporate tax rates.


In Depth

Q&A: Decathlon Capital On Revenue-Based Alternative Lending

Oct 30 2017 | 3:49pm ET

The explosion in private credit activity since the end of the financial crisis is...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

CAIS: How Technology is Disrupting the Alternative Investment Industry

Nov 7 2017 | 5:35pm ET

If there’s one thing that alternative investment professionals can agree on, it...