Stock Talk – January, 2017

Stock Talk

Glenn Huff

Glenn Huff

Do you have an opinion on AMZA. It’s a midstream MLP ETF that uses leverage and provides a 1099. Current yield is near 20%. Its holdings are all well known MLPs or MLP GPs.

Igor Greenwald

Igor Greenwald

Yes, the fund is exposed to significant tax leakage and has a distribution that is not supported by the income generated on its holdings and what I can glean of its leverage. I much prefer AMJ, the most liquid ETN and one not exposed to taxes on the distributions of the MLPs it is tracking. Of course, the yield isn’t as nice. But you can also buy in the money calls on AMJ if you’re looking to boost leverage and returns. We’ve just cashed in on one such at The Energy Strategist but I believe it’s still a trade that works.

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