Van Eck Global, the New York-based money management firm known for its Market Vectors commodity-related exchange-traded funds, submitted papers to the Securities and Exchange Commission to offer a passively managed ETF of master limited partnerships, making it the second such filing this month.

The fund will be based on the Market Vectors MLP Index and will be listed on the New York Stock Exchange. It didn’t say in the filing what the ETF’s trading symbol would be or what its expense ratio would be.

Van Eck’s filing follows a similar move by ALPS earlier this month to launch the Alerian MLP ETF. The two proposed ETFs mark a new twist in the world of exchange-traded MLP products. The space is now solely populated by three exchange-traded notes. The three are JP Morgan Alerian MLP Index ETN (NYSEArca: AMJ), the UBS E-Tracs Alerian MLP Infrastructure ETN (NYSEArca: MLPI) and the Credit Suisse Cushing 30 MLP Index ETN (NYSEArca: MLPN). Each charge an annual fee of 0.85 percent.

In its filing, Van Eck said MLP ETFs are taxed as a regular corporation for federal income tax purposes. As a result, the ETFs would be subject to U.S. federal income tax on its taxable income at the applicable federal income tax rate and will also be subject to state income tax.

It noted in the filing that changes in federal or state tax laws could hurt the tax treatment or financial performance of MLPs. The company noted that proposed changes, such as the U.S. federal budget for fiscal year 2011 calling for the elimination of about $40 billion in tax incentives and the imposition of new fees on certain energy producers, among other shifts in tax law, could adversely affect MLPs that the fund invests in.

Tracking Error Vs. Credit Risk

Tracking error in general is one big difference between an ETF and an ETN. ETNs are debt issues backed by the good faith and credit of the issuer. That means ETN investors incur credit risk, but also get the exact return of a given benchmark after fees, eliminating the tracking error often associated with ETFs.

MLPs themselves have favorable tax structures. They typically derive at least 90 percent of their income from interest, real estate rental or natural resources development. Because the Internal Revenue Service views shareholders of the MLP as “partners” in the enterprise, an MLP isn’t required to pay taxes at the corporate level and thus avoids double taxation of its income.