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Upgrading my MLP ETF from AMLP to AMZA

I sold AMLP.

music selection:  “Whiskey River” — Willie Nelson

I like the MLP space for high yields and steady growth.  This is a sector that is poised for long term growth as hydraulic fracturing continues to revolutionize domestic oil production.  All of that oil and gas has to be transported and stored.  The MLP companies serve that role and get a tax advantage as well.  For more than a year, I have been invested with twice my normal allocation size in AMLP.  AMLP is a diversified basket of MLP companies currently yielding a little more than 7%.  I sold today at 12.07 booking a 413 dollar capital loss that was more than covered by past distributions and options premiums.

Today, I upgraded to AMZA.  It is a similar basket of diversified MLP companies but it is actively managed and uses up to 33% leverage to boost returns.  I bought 2,039 shares at 9.80 a piece for a total investment of 19,982.20.  The new ETF boasts a yield of 21.22% or about three times what I was earning with a similar 20k or so investment in the MLP space.  My 12 month distributions were below my annual budget as of this morning but is now at 107.83% of budget.  I will sleep well tonight.

Devour your prey raptors!

{ 3 comments… add one }
  • KMB July 20, 2017, 2:56 pm

    Can AMZA be held in a tax exempt account, or does it issue a K-1 like other MLPs?

    • The Lizard King July 20, 2017, 3:04 pm

      AMZA itself is not an MLP, it is an ETF. I never got k-1s from AMLP and don’t expect one from AMZA either. To be clear, you can hold MLPs in tax exempt accounts so long as you don’t let your cost basis go negative. If your Return of Capital distributions get close to you basis, you sell the stock and buy it back a minute later to establish a new basis and thus avoid UBTI.

  • Chris Holland July 21, 2017, 1:37 am

    I’m a big fan of AMZA and have been in and out over the past year. (Too much indecision). Holding now for very long term….

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