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Upturn AI SWOT - About
Direxion Daily Energy Bull 2X Shares (ERX)
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Upturn Advisory Summary
04/01/2025: ERX (1-star) has a low Upturn Star Rating. Not recommended to BUY.
Upturn Star Rating
Not Recommended Performance
These Stocks/ETFs, based on Upturn Advisory, consistently fall short of market performance, signaling caution before investing.
AI Based Fundamental Rating
Moderate Performance
These Stocks/ETFs, based on Upturn Advisory, typically align with the market average, offering steady but unremarkable returns.
Analysis of Past Performance
Type ETF | Historic Profit -44.2% | Avg. Invested days 26 | Today’s Advisory Consider higher Upturn Star rating |
Upturn Star Rating | Upturn Advisory Performance  3.0 | ETF Returns Performance  1.0 |
| Profits based on simulation | Last Close 04/01/2025 |
Key Highlights
Volume (30-day avg) 301973 | Beta 1.8 | 52 Weeks Range 51.24 - 75.56 | Updated Date 04/2/2025 |
52 Weeks Range 51.24 - 75.56 | Updated Date 04/2/2025 |
Upturn AI SWOT
Direxion Daily Energy Bull 2X Shares
ETF Overview
Overview
The Direxion Daily Energy Bull 2X Shares (ERX) seeks daily investment results, before fees and expenses, of 200% of the performance of the Energy Select Sector Index. It primarily focuses on the energy sector, using a leveraged strategy to amplify returns.
Reputation and Reliability
Direxion is known for providing leveraged and inverse ETFs, with a reputation for innovation in the ETF space.
Management Expertise
Direxion has a dedicated management team experienced in creating and managing leveraged ETFs.
Investment Objective
Goal
To seek daily investment results, before fees and expenses, of 200% of the performance of the Energy Select Sector Index.
Investment Approach and Strategy
Strategy: The ETF uses a leveraged strategy, aiming for 2x the daily performance of the Energy Select Sector Index.
Composition The ETF holds financial instruments that provide leveraged exposure to companies within the Energy Select Sector Index.
Market Position
Market Share: ERX holds a significant but volatile share within the leveraged energy ETF market.
Total Net Assets (AUM): 77365000
Competitors
Key Competitors
- ProShares Ultra Oil & Gas (DIG)
- ProShares Ultra Petroleum (UCR)
- MicroSectors U.S. Big Oil Index 3X Leveraged ETN (NRGU)
Competitive Landscape
The competitive landscape is dominated by leveraged and inverse energy ETFs. ERX competes with other ETFs offering leveraged exposure to the energy sector, each with varying levels of leverage and tracking methodologies. ERX's advantage lies in its 2x leverage, appealing to those seeking aggressive short-term gains, while its disadvantage is the higher risk and potential for rapid value erosion due to daily compounding and market volatility.
Financial Performance
Historical Performance: Historical performance is highly volatile, reflecting the leveraged nature and the sensitivity to energy sector movements. Performance can vary significantly depending on market conditions.
Benchmark Comparison: The ETF's performance is benchmarked against 2x the daily performance of the Energy Select Sector Index, but tracking error can occur due to fees, expenses, and compounding effects.
Expense Ratio: 0.95
Liquidity
Average Trading Volume
The average trading volume is relatively high, indicating good liquidity for traders.
Bid-Ask Spread
The bid-ask spread can vary depending on market volatility and trading volume, but it is generally manageable for short-term trading.
Market Dynamics
Market Environment Factors
Economic indicators, oil prices, geopolitical events, and energy sector growth prospects significantly influence ERX. Changes in energy demand and supply dynamics also have a major impact.
Growth Trajectory
Growth trajectory is tied to the energy sector's performance and investor appetite for leveraged products. Strategy and holdings remain consistent with the ETF's objective.
Moat and Competitive Advantages
Competitive Edge
ERX's competitive edge lies in its specific focus on providing 2x leveraged exposure to the energy sector, appealing to traders seeking amplified short-term gains. The ETF's daily reset mechanism allows it to maintain its leverage target, and its strong trading volume enhances liquidity. The dedicated focus on the energy sector can allow informed investors to time investments to take advantage of sector specific opportunities. However, this high leverage makes it very risky for long-term investors.
Risk Analysis
Volatility
The ETF exhibits high volatility due to its leveraged nature, making it suitable only for risk-tolerant investors.
Market Risk
Market risk is significant, as the ETF's performance is directly tied to the energy sector, which is sensitive to economic cycles and geopolitical events.
Investor Profile
Ideal Investor Profile
Ideal investors are experienced traders with a high-risk tolerance who seek short-term exposure to the energy sector.
Market Risk
ERX is best suited for active traders seeking short-term gains and is not appropriate for long-term investors due to the effects of compounding and high volatility.
Summary
Direxion Daily Energy Bull 2X Shares (ERX) is a leveraged ETF designed for short-term trading in the energy sector. It aims to provide 2x the daily performance of the Energy Select Sector Index, making it a high-risk, high-reward investment. Its volatility and potential for rapid value erosion make it unsuitable for long-term investors. Experienced traders with a strong understanding of the energy market and risk management are the ideal investors for ERX.
Similar Companies
DIG
ProShares Ultra Oil & Gas
DIG
ProShares Ultra Oil & Gas
NRGU
MicroSectors U.S. Big Oil Index 3X Leveraged ETNs
NRGU
MicroSectors U.S. Big Oil Index 3X Leveraged ETNs
OIH
VanEck Oil Services ETF
OIH
VanEck Oil Services ETF
XLE
Energy Select Sector SPDR® Fund
XLE
Energy Select Sector SPDR® Fund
Sources and Disclaimers
Data Sources:
- Direxion
- SEC Filings
- Yahoo Finance
- etf.com
Disclaimers:
This analysis is for informational purposes only and does not constitute financial advice. Investment decisions should be based on your own research and risk tolerance. Leveraged ETFs are not suitable for all investors.
AI Summarization is directionally correct and might not be accurate.
Summarized information shown could be a few years old and not current.
Fundamental Rating based on AI could be based on old data.
AI-generated summaries may have inaccuracies (hallucinations). Please verify the information before taking action.
About Direxion Daily Energy Bull 2X Shares
Exchange NYSE ARCA | Headquaters - | ||
IPO Launch date - | CEO - | ||
Sector - | Industry - | Full time employees - | Website |
Full time employees - | Website | ||
The index is provided by S&P Dow Jones Indices and includes domestic companies from the energy sector which includes the following industries: oil, gas and consumable fuels; and energy equipment and services. The fund invests at least 80% of its net assets in financial instruments, such as swap agreements, securities of the index, and ETFs that track the index, that, in combination, provide 2X daily leveraged exposure to the index, consistent with the fund's investment objective. It is non-diversified.
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