Can The Alerian MLP ETF And Its 8% Expense Ratio Really Be Trusted Anymore?

MLP investors, beware! The wool may be getting pulled over your eyes. Alerian is one of the heavy hitters in the MLP and no ETF is bigger or more frequently traded than the Alerian MLP ETF (NYSEARCA:AMLP). With assets of over $9 billion, it holds some of the biggest names out there like Kinder Morgan Energy Partners (NYSE:KMP) and Magellan Midstream Partners (NYSE:MMP). MLPs are known for their oversized yields and the Alerian ETF is no exception. With an annual yield of 5.9%, it currently ranks as the 3rd highest yield of 23 MLP ETFs according to the ETF Database.

 

But there's one little detail that's being glossed over in all of this - its expense ratio. At a staggering 8.56%, the Alerian MLP ETF's expense figure ranks it as the highest among those same 23 MLP ETFs. What's worse is that Alerian didn't even acknowledge this figure - keep in mind that this fund's inception date is 2010 - until just recently.

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