AMLP Returned 6.10% Over Ten Years While Its Index Returned 8.07%. The Fund’s Own Report Explains Why
AMLP's annual shareholder report quietly names the structural feature that drains returns before investors ever see a price quote, and most holders have no idea it exists.
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ALPS ETF Trust reports that over the ten years ended November 30, 2025, the Alerian MLP ETF (NYSEARCA:AMLP) returned an average of 6.10% per year based on net asset value. According to the same ALPS ETF Trust report, the Alerian MLP Infrastructure Index the fund is built to track, returned 8.07% a year over that decade. The gap has a documented cause, and the fund’s own annual report names it.
Where the Missing Return Went, in the Sponsor’s Words
The annual shareholder report covers December 1, 2024 to November 30, 2025. It states that the difference in performance between the fund and its underlying index is primarily due to “the Fund’s operating expenses and the tax impact of the Fund’s C-Corporation structure“. ALPS ETF Trust’s report adds that this included the accrual of approximately $17.5 million in income tax expense during that period. The fund tells shareholders exactly where the money went.
Why This ETF Pays Corporate Income Tax
Most ETFs are organized as regulated investment companies (funds that pass income through). The fund owes no entity-level income tax. Income flows to shareholders, who pay tax on their own returns.
AMLP holds more than 25% of its assets in master limited partnerships, so it cannot use that structure. It is organized as a C-corporation, which makes the fund itself a taxpayer, so tax accrued at the fund level reduces net asset value (the per-share portfolio value) before you see a quote. The expense is embedded inside the fund and surfaces only as a lower return.
For scale, ALPS ETF Trust reported AMLP’s net assets at $10,668,703,135 as of November 30, 2025, alongside the approximately $17.5 million in income tax expense accrued during the fiscal year ended that date. That accrual changes year to year with the portfolio’s gains and income, so treat it as a snapshot of one period.
Costs Stack on Top of the Tax Drag
The gap appears in every period the report covers. Over the five years ended November 30, 2025, ALPS ETF Trust reported 23.35% per year for the fund versus 26.73% for the index.
Operating costs add a second layer. Check the fund website for the current expense ratio. That rate exists alongside the tax effect rather than replacing it.
A Far Narrower Portfolio Than Many Holders Assume
ALPS ETF Trust reported that AMLP held 13 portfolio positions as of November 30, 2025, with 93.39% of total investments in its ten largest. An investor who believes they own broad energy infrastructure holds a tighter basket than they realize.
A Deliberate Design, Fully Disclosed
The C-corporation structure is a deliberate choice. It lets AMLP hold a concentrated portfolio of partnerships and deliver the distribution income its buyers want, something a typically structured fund cannot replicate in the same way. AMLP paid $4.07 per share over the trailing 12 months, including a $1.03 payment with an August 12, 2026 ex-dividend date. The sponsor tells the tax cost clearly.
Alternatives exist, with trade-offs. They hold different portfolios. The Alerian Energy Infrastructure ETF (NYSEARCA:ENFR) and the Global X MLP & Energy Infrastructure ETF (NYSEARCA:MLPX) cap MLP exposure at 25%, which keeps them out of C-corporation tax treatment. MLPX’s holdings as of May 31, 2026 leaned heavily on large pipeline corporations and Canadian infrastructure companies, with traditional MLPs in a supporting role. Their expense ratios were unavailable in current disclosures, so the structural tax difference is the comparison that holds up.
What to Read in Every Annual Shareholder Report
AMLP is built for concentrated MLP exposure and quarterly distributions, with fund-level taxes and expenses keeping returns below the index. Its structure does not deliver index-matching total returns. Two documents explain the gap: the performance discussion in the annual shareholder report and the prospectus section on how the fund is taxed. For every other fund you own, open the annual shareholder report and find the management discussion beside the performance table. Sponsors explain there why a fund trailed its benchmark. Ask each what the structure is costing you that the distribution never shows.
Contact [email protected] for any questions or corrections.
Ryne Mauck is an investment writer covering exchange-traded funds, retirement planning, and portfolio strategy. Through his work at 24/7 Wall St. and other investment platforms, including Seeking Alpha, he aims to provide clear, research-driven insights that help investors make more informed decisions while maintaining a long-term approach to investing.
Ryne holds a B.Sc. in Finance and an M.A. in Political Science. He is a formerly registered Municipal Advisor Representative and has passed the Series 50, Series 63, and Series 65 exams. His articles are not intended to be, nor should they be interpreted as, financial advice.
