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4 ETFs to Invest in Soaring Semiconductor Stocks

Neena Mishra

Semiconductor stocks have surged this year after suffering a steep decline in December. The PHLX semiconductor index is up about 17% in 2019. Progress in US-China trade talks has helped these stocks as they have a lot of exposure to China.

Further, there were a lot of concerns about slowdown in semiconductor demand late last year but Q4 results were not as bad as feared. Nvidia (NVDA) had warned about results but results and guidance were better than expected. Many other chip companies including-- Lam Research (LRCX), AMD (AMD) and Xilinx (XLNX)--also reported better than expected results.

While some of the traditional business areas face challenges, many newer growth areas have emerged for chipmakers, including Autonomous Cars, Cloud Computing, virtual reality, Gaming, Wearables and Internet of Things (IoT).

There is a lot of innovation going on in the industry; chipmakers are adopting new materials and technologies to manufacture smaller and more efficient chips.

The iShares PHLX Semiconductor ETF (SOXX) is a modified market cap weighted ETF. It has 30 holdings with a cap of 8% on individual securities and holds not more than five securities at that cap. Broadcom (AVGO), Intel (INTC), Texas Instruments (TXN) and Nvidia are its top holdings.

The VanEck Vectors Semiconductor ETF (SMH) also follows a market cap weighted index. However, it has a more concentrated portfolio compared with SOXX. Taiwan Semi (TSM), Intel and Nvidia are its top holdings.

The SPDR S&P Semiconductor ETF (XSD) is an equal weighted ETF. With an expense ratio of 0.35%, it is one of the cheapest ETFs in the space.  

The Invesco Dynamic Semiconductors Portfolio (PSI) is a smart Beta ETF. It evaluates companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action, and value. With an expense ratio of 0.63%, it is the most expensive ETF in the space.

To learn more about these ETFs and their performance, please watch the short video above.

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Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
 
Invesco Dynamic Semiconductors ETF (PSI): ETF Research Reports
 
iShares PHLX Semiconductor ETF (SOXX): ETF Research Reports
 
SPDR S&P Semiconductor ETF (XSD): ETF Research Reports
 
VanEck Vectors Semiconductor ETF (SMH): ETF Research Reports
 
Intel Corporation (INTC) : Free Stock Analysis Report
 
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
 
Lam Research Corporation (LRCX) : Free Stock Analysis Report
 
Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report
 
Xilinx, Inc. (XLNX) : Free Stock Analysis Report
 
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