MLP Index

jasonrgross · Posted: Sun May 24, 2009 6:22 pm Post subject: MLP Index

JP Morgan recently came out with an ETN tracking the Alerian MLP Index (Symbol: AMJ). They also announced on Thursday May 21, that the previous version of this security - BearLinxSM Alerian MLP Select Index ETNs (Ticker: BSR ) will stop trading on June 15. I was wondering if anyone would care to comment on why these two securities weren't merged - as they track the same index. I was also wondering why JP Morgan chose to use the ETN structure for this investment rather than the ETF structure.

david45 · Posted: Fri Jun 05, 2009 12:39 am Post subject: Re: MLP Index

This does seem odd. Please provide the link to your information because I would like to check this out. Thank you.

masmas · Posted: Wed Oct 28, 2009 7:09 pm Post subject: Re: MLP Index

jasongross,
I can't speak to the first question, but I can the second. Income received from ETNs are taxed as debt income as ETNs are technically a debt security (Exchange Traded Note). There can be significant tax issues with MLPs (not necessarily bad, just different). By converting it from MLP-income to debt-income it simplifies the taxation issues. Of course, it also opens up the new risk of the company "defaulting" on the note.