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

An Interview With Harvest Volatility Management's Rick Selvala

Mar 23 2017 | 5:39pm ET

Several years of extremely low interest rates have pushed some investors into equities...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

SEI: Private Debt Coming Into Its Own

Mar 8 2017 | 9:24pm ET

The explosive growth of private debt over the past few years has caused the lines...

 

From the current issue of