The Changing Face of MLPs in Exchange Traded Products

Last week, JPMorgan very quietly changed the way investors can leverage Exchange Traded Products (ETPs) when looking to invest in the Master Limited Partnership (MLP) sector.  In a press release, JPMorgan announced it is capping the number of created shares for the Alerian MLP Index ETN (AMJ), effectively making it a closed end fund.  While closed end funds can have their place in the investment arena, one posing as an ETP can create major challenges.  The product effectively is losing one of its most important qualities – the creation/redemption characteristic.  Bloomberg and Ron Rowland review this concerning change for you.