U.S. Markets closed

ETF Chart of the Day: Sweet on Semis


Fund provider iShares was astute enough to accentuate the importance of the index changes that occurred in mid- September in the PHLX Semiconductor Index as something that some investors may have slept on given the many other headlines that have surfaced in these past busy weeks.

Ten new companies in the Semi space were added to the index while ten were deleted, in attempts to make the overall index more consistent with who is driving growth and innovation in various corners of these markets.

For example, as iShares noted, additions to the index include QCOM, ASML, MXIM, and FSL, which in retrospect, it’s quite hard to believe that some of these names, particularly QCOM was not added to the index eons ago.

The largest weighting in the index and related ETF SOXX (iShares PHLX SOX Semiconductor Sector Index,Expense Ratio 0.48%) is INTC (7.8%), which is slated to report quarterly earnings tomorrow, on Tuesday after the bell.

The remaining top five holdings are TXN (7.8%), QCOM (7.5%), AMAT (6.5%), and TSM (5.8%) and it is interesting how QCOM which was just added, is already a major overall component and driver of the index and potential price movement.

TXN, QCOM, AMAT, and TSM are all scheduled to release their quarterly earnings numbers between 10/21-11/14 as well, so perhaps this is a perfect time to re-examine the Semi space particularly via the SOX and SOXX given the new look and feel.

SOXL (Direxion Daily Semiconductor Bull 3X Shares, Expense Ratio 0.95%) and SOXS (Direxion Daily Semiconductor Bear 3X Shares, Expense Ratio 0.95%) should be freshly looked at as well since they track the same PHLX Semiconductor Index but on a three times daily leveraged daily basis (both bull and bear strategies) and have become reasonably popular with both traders and institutional managers.

iShares PHLX Semiconductor ETF