Why is AMLP better than ERX?

AMLP may be considered better than ERX for some investors due to its specific focus, offering diversification.

ERX's performance relative to AMLP will vary over time, depending on market conditions.

Should I invest in AMLP or ERX?

The choice between AMLP and ERX should align with your investment goals, risk tolerance, and desired exposure.

Are AMLP and ERX good investments?

Both AMLP and ERX can be suitable investments depending on individual investment strategies, goals, and risk profiles.

What is the correlation between AMLP and ERX?

The correlation between AMLP and ERX can vary over time, reflecting differences in performance.

4 min read

By Ron Koren, ETF Insider

AMLP VS ERX

Exchange-Traded Funds (ETFs) have revolutionized the investment world, offering diversified exposure across various sectors and asset classes. In this article, we will conduct a thorough comparison between two prominent ETFs: AMLP (Alerian MLP ETF) and ERX (Direxion Daily Energy Bull 2X Shares). We'll delve into key aspects including ETF tickers, full names, issuers, sectors, top holdings, capitalization, strategy, tracking, and exposure.

AMLP Vs ERX: Overview

AMLP and ERX are two distinct ETFs with differing investment strategies within the energy sector. While AMLP focuses on Master Limited Partnerships (MLPs) related to energy infrastructure, ERX aims to provide double the daily performance of energy companies in the S&P Oil & Gas Exploration & Production Select Industry Index. This divergence in strategy leads to unique risk and return profiles, which we'll explore in greater detail below.

AMLP Vs ERX: Sectors and Top Holdings

AMLP primarily invests in companies engaged in energy transportation, storage, and processing. Its top holdings include well-known names like Enterprise Products Partners, Energy Transfer LP, and Magellan Midstream Partners. On the other hand, ERX concentrates on energy exploration and production, with holdings such as ConocoPhillips, EOG Resources, and Pioneer Natural Resources. A thorough understanding of these sectors and top holdings assists investors in making informed decisions based on their investment objectives and risk tolerance.

AMLP overlap AMLP VS ERX

AMLP Vs ERX: Capitalization and Strategy

AMLP boasts a substantial Asset Under Management (AUM), reflecting its popularity among investors interested in energy infrastructure. ERX's strategy is built on seeking to amplify the returns of energy companies on a daily basis, which inherently introduces a higher level of volatility due to its leverage. The differing capitalization and strategy between these ETFs contribute to varying potential for returns and risk, making it crucial for investors to assess their risk appetite before investing.

AMLP Vs ERX: Tracking and Exposure

AMLP tracks a modified equal-weight index of MLPs, providing investors with exposure to energy infrastructure assets. ERX, being a leveraged ETF, seeks to achieve twice the daily performance of its underlying index. It achieves this through the use of derivatives and financial instruments. The tracking methods employed by these ETFs can influence their performance over time and should be a consideration for investors when aligning their portfolio with their investment goals.

Conclusion

AMLP and ERX represent diverse opportunities within the energy sector, catering to different investor preferences and objectives. If you're keen on gaining deeper insights into holdings, correlations, overlaps, and more, ETF Insider is a valuable tool. With its user-friendly app, ETF Insider provides extensive information about these financial instruments and more, empowering investors to make informed decisions.

Disclaimer: This article is intended for informational purposes only and does not provide any investment advisory services.

Sources:

https://www.direxion.com/ ERX ETF issuer
https://www.direxion.com/product/daily-energy-bull-bear-2x-etfs ERX ETF official page

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FAQ

Why is AMLP better than ERX?
AMLP may be considered better than ERX for some investors due to its specific focus, offering diversification.
Does ERX beat AMLP?
ERX's performance relative to AMLP will vary over time, depending on market conditions.
Should I invest in AMLP or ERX?
The choice between AMLP and ERX should align with your investment goals, risk tolerance, and desired exposure.
Are AMLP and ERX good investments?
Both AMLP and ERX can be suitable investments depending on individual investment strategies, goals, and risk profiles.
What is the correlation between AMLP and ERX?
The correlation between AMLP and ERX can vary over time, reflecting differences in performance.