Alerian MLP ETF Tax Update

Alerian MLP ETF (AMLP) has adjusted its deferred tax liability (DTL), resulting in a decrease of approximately $3.6 million ($0.016 per share) to the Fund's net asset value (NAV) on May 30, 2025. This adjustment stems from updated tax reporting from underlying MLPs, indicating additional capital loss carryforwards are available to offset future taxable income. AMLP relies on potentially delayed information from MLPs to estimate DTL, which may cause the daily estimate to significantly differ from the Fund’s actual tax liability.

Analysis

The Alerian MLP ETF (AMLP) has reported a modification to its deferred tax liability (DTL) estimate, resulting in a decrease of approximately $3.6 million, which translates to a positive adjustment of roughly $0.016 per share to its Net Asset Value (NAV) recorded on May 30, 2025. This downward revision in DTL is primarily attributed to new tax reporting information received from the underlying Master Limited Partnerships (MLPs) in its portfolio, indicating a greater availability of capital loss carryforwards to offset future taxable income. It is crucial to note that AMLP's DTL estimation process relies significantly on information provided by these MLPs, which is often reported with a delay and may not be consistently timely. Consequently, the daily DTL estimate used for NAV calculation can experience material deviations from the Fund's actual tax liability. The Adviser may adjust these DTL estimates as new information emerges, considering factors such as statutory carryforward periods, shareholder transactions, changes in underlying index constituents, and prevailing market conditions. This specific DTL adjustment underscores the operational complexities and tax implications inherent in AMLP's structure as a C-corporation, which, unlike most investment companies, accrues deferred taxes on unrealized gains and certain distributions, directly impacting its NAV. The Fund's investment focus on the energy infrastructure sector also exposes it to risks such as commodity volume fluctuations, regulatory changes, and interest rate sensitivity.

Key Decisions for Investors

• Investors should recognize the $0.016 per share positive NAV adjustment on May 30, 2025, as a consequence of revised tax information, but understand this may not be indicative of future recurring gains.
• Factor in the inherent uncertainty and potential for volatility in AMLP's NAV due to its reliance on delayed tax reporting from underlying MLPs and the dynamic nature of deferred tax liability estimations.