For investors seeking the tax benefits of partnership structure and the liquidity of publicly traded companies, master limited partnerships (MLPs) are attractive options. MLPs often engage in the production, processing or transportation of energy resources. Exchange-traded funds (ETFs) and exchange-traded notes (ETNs) are vehicles that allow investors to gain diverse exposure through the purchase of a single security. There are a number of MLP ETFs that have been established for investors seeking both the benefits of ETFs or ETNs and MLPs. The five largest by assets under management (AUM) as of November 14, 2016, were the Alerian MLP ETF (NYSEARCA: AMLP), the Alerian MLP Index ETN (NYSEARCA: AMJ), the ETRACS Alerian MLP Infrastructure Index ETN (NYSEARCA: MLPI), the First Trust North American Energy Infrastructure Fund (ARCA: EMLP) and the Credit Suisse X-Links Cushing MLP Infrastructure ETN (ARCA: MLPN).

Alerian MLP ETF

The Alerian MLP ETF is an index-tracking ETF that holds shares of 25 energy infrastructure MLPs. The ETF tracks the Alerian MLP Infrastructure Index, of which all constituent partnerships are based in the United States. It is the largest fund in its category with $8.9 billion in AUM as of November 14, 2016, according to Morningstar. The fund is structured as a C-corporation, preventing the full return from being passed through untaxed. This has a significant impact on the published fee structure, because tax expenses are included in those calculations. However, distributions are tax-deferred. As of November 14, 2016, shares were $12.19 with an average daily trading volume of 13.74 million. The 12-month trailing yield was 8.76%.

Alerian MLP Index ETN

The JP Morgan Alerian MLP Index ETN tracks the Alerian MLP Index. Unlike AMLP, AMJ is an ETN, the value of which is not backed by underlying securities, and distributions are taxed as ordinary income. The fund has $3.6 billion in AUM and an average daily trading volume of 3.0 million notes as of November 14, 2016, with notes trading at $30.43. AMJ had a 12-month yield of 7.15% and an expense ratio of 0.85%.

ETRACS Alerian MLP Infrastructure Index ETN

The UBS ETRACS Alerian MLP Infrastructure Index is also a market cap-weighted tracker of the 25 firms in the Alerian MLP Infrastructure Index. MLPI tracks MLPs engaged in storage, transportation and processing of energy commodities, which is a slightly more narrow focus than other ETFs and ETNs tracking the same index. As it is an ETN, distributions are taxed as ordinary income. The fund had $2.2 billion in AUM and an average daily trading volume of 218,654 notes as of November 14, 2016, with notes trading at $27.01. MLPI had a 12-month yield of 7.03% and an expense ratio of 0.85%.

North American Energy Infrastructure Fund

The First Trust North American Energy Infrastructure Fund invests in North American energy infrastructure MLPs and limited liability companies. EMLP is actively managed, which is rare in this category. To comply with regulations, the fund diversified its holdings to include certain other C-corporations, royalty trusts and institutional MLP shares, meaning it is not a pure MLP play. The fund also takes share distributions from some holdings rather than cash distributions, which negatively impacts the yield metric. EMLP had $1.33 billion in AUM and an average daily trading volume of 890,774 shares as of November 14, 2016, with shares trading at $23.81. EMLP had a 12-month yield of 3.78% and an expense ratio of 0.95%. Morningstar gave the fund a five-star rating.

Credit Suisse X-Links Cushing MLP Infrastructure ETN

The Credit Suisse X-Links Cushing MLP Infrastructure ETN tracks the equally weighted Cushing 30 MLP Index, which is comprised of 30 publicly traded energy infrastructure companies in North America. As an ETN, the notes are not backed by underlying security ownership, and distributions are subject to ordinary income taxation. The fund had $507.61 million in AUM and an average daily trading volume of 1.5 million notes as of November 14, 2016, with notes trading at $20.83. MLPN had a 12-month yield of 7.53% and an expense ratio of 0.85%.

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