Post by sam on Apr 17, 2024 3:20:58 GMT
I know there is structure issue. AMLP is corp which buys K1 MLP and AMJ is basically derivative contract (ETN) which which mimic MLP index fund. Both are non leverage.
My understanding is
AMLP has to pay tax on those MLP gains once distributions exhaust cost basis (similar to investors in K1) and what is left then send out to share holder as dividends so no K1 for investors.
I always thought due to taxation there will will be smaller dividend payment or since dividend plays a big role in total return of MLPS so AMLP return will less than AMJ?
But over the years AMLP has better total return (depends which time period you look) and dividend . Q. Why any thoughts?
Any reason to think AMLP going to under perform AMJ since most of their BUYs will be at much lower cost basis (due to energy Bull Market of last 3 years) so it might be possible they their Net cost may be closer to ZERO so more tax on them in Future so smaller dividends for investors. Is their way to find out?
Both AMLP and AMJ has good dividends and good total returns than own most individual MLPs so why bother owning K1 MLPs? e.g. Investment grade MLPs like EPD, OKE, WMB, KMI, or ENB (they all have and had investment grade credit ratings in past) plus they did NOT cut or eliminate their distributions during COVID era either.
