Share-split context: A reverse split was recorded on May 18, 2020 with coefficient 0.2. A reverse split combines multiple old shares into fewer new shares and mechanically raises the quoted price per share. That mechanical increase does not restore lost investment value. The returns in this report are already split-adjusted, while reverse-split history remains a separate structural warning.

ETF Education Report: ALERIAN MLP ETF (AMLP)

What this ETF is trying to do

The ALERIAN MLP ETF (ticker: AMLP) is an exchange-traded fund that holds a variety of different companies. Based on its top holdings, it focuses on energy infrastructure companies like Sunoco LP and MPLX LP Partnership Units.

What the numbers show

When looking at how an ETF performs, it is important to look at two different types of returns: price return and total return.

• Price Return: This measures only the change in the share price. For AMLP, the year-to-date (YTD) price return is approximately 11.36%. The one-year price return is approximately 12.67%, and the three-year price return is approximately 28.24%.

• Total Return: This includes the share price change *plus* any cash distributions paid out to investors. AMLP's total returns are higher than its price returns. For example, the YTD total return is approximately 17.97%, and the one-year total return is approximately 21.94%. Over three years, the total return was approximately 62.88%.

Please note that this ETF has a history of a reverse split. In a reverse split, multiple old shares are combined into fewer new shares. This causes the price per share to rise mechanically, but it does not increase the actual value of your investment.

Income and distribution explanation

Some investors look for ETFs that pay out regular cash, known as distributions. AMLP has a distribution yield of approximately 7.77%. This means the cash distributed is high relative to the current share price of $52.36. These distributions usually happen quarterly, with four payouts recorded over the last 12 months.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases over time. It is important to remember that a falling share price is not the same thing as NAV erosion. For AMLP, the erosion-risk score is 100, and the label states "No price erosion detected." There is no severe erosion-risk flag for this ETF.

Pros

• The ETF has shown positive price returns over the last year and three years.

• It provides a significant distribution yield for those seeking cash income.

• The total return figures are higher than the price return figures, showing the impact of distributions.

Cons

• The ETF has a history of reverse splits, which is a structural detail investors should note.

• High distribution yields can sometimes be misleading; they do not guarantee that the share price will stay stable.

Beginner takeaway

AMLP provides exposure to energy infrastructure through its top holdings, such as Sunoco LP and MPLX LP. While it offers a high distribution yield, investors should distinguish between the share price movement (price return) and the overall gain including cash payments (total return). Always remember that a high yield is not a guarantee of total profit.