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The March prospectus reflected 8.32% expense ratio. Morningstar had it at 1.16%. Calls to Oppenheimer were not helpful. At 8.32% I'm gone. I can live with 1.16%. Can anyone clue me in to the correct expense percentage? Thank you.
From the below linked article: "Unlike traditional corporations, MLPs operate as limited partnerships and pay no tax at the company level, allowing investors to avoid the double tax on dividends.
But depending on how the mutual fund is investing in MLPs, some new tax issues could nullify many of the advantages of owning the partnerships directly.
“Most MLP funds flunk the mutual fund test by having more than 25% of the portfolio invested in MLPs,” said Robert Gordon, president of Twenty-First Securities Corp.
Therein lies the rub.
As soon as a mutual fund portfolio goes beyond a 25% allocation to direct MLP investments, the fund loses its status as a registered investment company and converts, for tax purposes, into a corporation. The tax rate climbs to 35%. That can be a painful surprise for investors."
This page requires a free registration to InvestmentNews.com. http://www.investmentnews.com/article/20140508/FREE/140509899?template=printart My take,as a non accountant or tax attorney: As a mutual fund that holds more than 25% in M L Ps receives distributions from the M L P's it holds,it must account for deferred taxes owed on a daily basis as to the net effect on Daily N A V.This amount ends up in the "other expenses" column.It is a future tax liability and not an expense of the fund's operations or management fee.
You may want to consider MLPX as detailed HERE. Although I would like to see higher daily trading volumes, this ETF has some attractive features and has performed well since inception.
Thanks to everyone for your comments. I received an email from Oppenheimer and the A Share expense is 1.35% and C Share is 2.1%. I will stay with Oppenheimer for the time being. I did like Hank's "Steal Path" comment though.
$5K in 2010 is now $7.8+. I've done worse. It supposedly avoided the tax consequences of holding MLPs in tax-advantaged accounts. Hope that is true, since that's why I bought it.
Comments
Regards,
Ted
http://www.steelpath.com/individual/our-funds/funds-overview/?cmpid=opp017582
"Unlike traditional corporations, MLPs operate as limited partnerships and pay no tax at the company level, allowing investors to avoid the double tax on dividends.
But depending on how the mutual fund is investing in MLPs, some new tax issues could nullify many of the advantages of owning the partnerships directly.
“Most MLP funds flunk the mutual fund test by having more than 25% of the portfolio invested in MLPs,” said Robert Gordon, president of Twenty-First Securities Corp.
Therein lies the rub.
As soon as a mutual fund portfolio goes beyond a 25% allocation to direct MLP investments, the fund loses its status as a registered investment company and converts, for tax purposes, into a corporation. The tax rate climbs to 35%. That can be a painful surprise for investors."
This page requires a free registration to InvestmentNews.com.
http://www.investmentnews.com/article/20140508/FREE/140509899?template=printart
My take,as a non accountant or tax attorney:
As a mutual fund that holds more than 25% in M L Ps receives distributions from the M L P's it holds,it must account for deferred taxes owed on a daily basis as to the net effect on Daily N A V.This amount ends up in the "other expenses" column.It is a future tax liability and not an expense of the fund's operations or management fee.
You may want to consider MLPX as detailed HERE. Although I would like to see higher daily trading volumes, this ETF has some attractive features and has performed well since inception.
Kevin
Higher than average fees even on Class A shares and quite erratic performance on many funds.
I will stay with Oppenheimer for the time being.
I did like Hank's "Steal Path" comment though.
I've done worse. It supposedly avoided the tax consequences of holding MLPs in tax-advantaged accounts. Hope that is true, since that's why I bought it.