AMLP VS FENY: Sectors and Top Holdings
In the vast world of exchange-traded funds (ETFs), the ongoing battle between sector-specific ETFs like AMLP (Alerian MLP ETF) and FENY (Fidelity MSCI Energy Index ETF) is a topic of keen interest for many investors. Both ETFs provide a unique set of benefits and risks to the table, serving distinct investor needs and goals. This article aims to dissect the comparison of AMLP vs. FENY, providing investors with a clearer view of which may be the best fit for their portfolio.
AMLP VS FENY: Sectors and Top Holdings
At the heart of the AMLP vs. FENY debate is the difference in their sector focus and top holdings. AMLP is centered around Master Limited Partnerships (MLPs) in the energy sector, primarily focusing on infrastructure such as pipelines and storage. Its top holdings usually comprise firms that are integral to the transportation and storage of energy commodities.
FENY, on the other hand, provides exposure to the broader energy sector, including oil, gas, and consumable fuels. Its top holdings are generally more diversified, including energy giants like ExxonMobil and Chevron. This difference in focus can impact performance, especially when specific sub-sectors of energy outperform others.
AMLP overlap AMLP VS FENY
AMLP VS FENY: Capitalization Strategy
Another crucial aspect of the AMLP vs. FENY comparison is the capitalization strategy. AMLP, given its focus on MLPs, tends to lean towards mid-cap companies. This concentration means that AMLP might offer higher yields, but it also comes with higher volatility given the mid-cap focus. FENY, with its broader energy focus, captures a mix of both large-cap and mid-cap companies. Consequently, FENY might offer a more stable return profile, benefiting from the stability of large-cap companies while still tapping into the growth potential of mid-caps.
AMLP VS FENY: Tracking and Exposure
When comparing AMLP vs. FENY, it's also essential to understand the tracking and exposure differences. AMLP is structured as a C-corporation, leading to a unique tax implication. The fund pays corporate income tax on its income, which can lead to some degree of tracking error when comparing its performance to its underlying index. However, the C-corp structure allows AMLP to invest primarily in MLPs without running into specific tax challenges that other ETF structures might face. FENY, on its part, provides exposure to a broader range of energy stocks without the specific focus on MLPs. As such, it doesn’t face the same tax implications as AMLP and generally has a closer tracking to its benchmark index.
Conclusion
In the battle of AMLP vs. FENY, there isn't a clear winner. Instead, the best choice depends on individual investor goals, risk tolerance, and desired exposure. AMLP offers a more niche focus on the MLP segment of the energy sector, potentially providing higher yields but also carrying increased volatility and unique tax implications. On the other hand, FENY gives broader energy exposure, capturing the performance of both large-cap and mid-cap companies in the sector, with potentially more stable returns.
For investors keen on a targeted approach to energy infrastructure, AMLP might be the better fit. Those looking for broader energy exposure, with a mix of capitalization strategies, might find FENY to be a more suitable option. In the end, understanding the nuances of both ETFs is crucial in making an informed investment decision.
<b>Sources</b>
- Alerian MLP ETF official website.
- Fidelity MSCI Energy Index ETF official website.
- Morningstar AMLP and FENY ETF Analysis.
- Investopedia: Understanding ETF Structures and Tax Implications.
AMLP ETF issuer
AMLP ETF official page
AMLP quote and analysis
Discover the top holdings, correlations, and overlaps of ETFs using our visualization tool.
Our app allows you to build and track your portfolio.
To learn more about the AMLP Alerian MLP ETF, access our dedicated page now.