This ETF is focused on MLP (Master Limited Partnerships.) Whenever you see MLP or LP (Limited Partnership) next to a stock or ETF, become very skeptical. Those are probably not your best choices. If you want energy-related ETFs, then consider ETFs like: FENY, XLE or VDE. The yield is less, but the quality of the investments and the expense ratio make far more sense to me.
If you just have to have an MLP ETF, then look at AMLP. There is a link below to show you some other alternatives. Don’t forget to check the expense ratio and AUM! Also be aware of the tax implications of having to wait for all of the investments within the MLP ETF to report their results for the year. This will slow down your tax filing. Here is what AMLP says in their prospectus:
“The tax treatment of all items allocated to each Fund each year by the MLPs will not be known until each Fund receives a schedule K-1 for that year with respect to each of its MLP investments. Each Fund’s tax liability will not be known until each Fund completes its annual tax return. Each Fund’s tax estimates could vary substantially from the actual liability and therefore the determination of each Fund’s actual tax liability may have a material adverse effect on the value of an investment in each Fund.”
Here are some key things about AMZA:
Expense Ratio 1.36% – This is TERRIBLE.
Assets Under Management (AUM) 513M – A very small ETF. I view this as risky.
ETF Category Energy Limited Partnership
Net Asset Value (NAV) $6.20
Total Holdings 37 – weak diversification but this is MLP-focused
Dividend yield 6.89% – A good yield. Be careful, yield isn’t everything.
5-Year Returns Not available. 3-year is 1.13% which is poor.
Ranking (AMZA – Real-Time SMART Grade™) on etfdailynews.com is #10 of 21 in this class of ETFs.
The XTF.COM rating for AMZA is 2.4 out of 10.0 with ONE Morningstar star.
There no similar ETFs that I would buy. So stay away from this mess.
You can find the XTF, Morningstar and other ratings when you are signed on to a Fidelity Investments accounts. I prefer the XTF rating over Morningstar.
Recommendation: Don’t buy AMZA to get yield or growth. This is not a good investment. If you must have an MLP ETF, look at AMLP.
AMZA LINK: AMZA etfdailynews
AMLP LINK: AMLP etfdailynews
MLP-ETFs LINK: MLP ETFs etfdailynews