AMLP's C-Corporation Tax Structure Cut a Decade of Returns, Fund Report Shows
The Alerian MLP ETF posted a 6.10% annualized net asset value return over the ten years ending November 30, 2025, while its underlying index returned 8.07%. The fund's annual report attributes the shortfall mainly to operating expenses and taxes tied to its C-corporation structure, including about $17.5 million in accrued income tax expense for the latest fiscal year. Unlike pass-through ETFs, AMLP pays entity-level income tax, which reduces what shareholders receive.
The Alerian MLP ETF, trading as AMLP, is structured as a C-corporation because it invests more than a quarter of assets in master limited partnerships. That prevents the pass-through treatment common to most ETFs. Its sponsor's report says the performance shortfall versus the Alerian MLP Infrastructure Index stems mainly from operating costs and entity-level taxes.
For the fiscal year ending Nov. 30, 2025, the fund accrued roughly $17.5 million in income tax expense while reporting about $10.67 billion in net assets. Over five years, it returned 23.35% annually versus 26.73% for the index. The portfolio was concentrated: 13 holdings, with 93.39% of investments in the top ten.
This disclosure could affect income-focused investors, retirees, and advisors who use MLP ETFs for energy-infrastructure exposure. It may prompt closer scrutiny of fund structure, tax drag, and concentration risk before purchase. Greater awareness could shift some allocations toward alternative funds, though those choices carry different trade-offs. It may also encourage clearer communication from sponsors about costs that reduce net asset value before investors see returns.