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ETF Spotlight: Semiconductors

tlydon@globaltrend.com (Tom Lydon)

Volume picked up considerably yesterday in iShares PHLX SOX Semiconductor (SOXX - News) , with more than 700,000 shares changing hands in the ETF (versus average daily trading volume of 234,000 shares).

It is not unusual for us to see accelerated activity in Semi related products as we are entering corporate earnings season, and Semi name AMD announced that quarterly sales fell 11% and that they were reducing forecasts for the current quarter yesterday.

While not a top holding in SOXX specifically, the AMD news still puts into perspective the coming earnings season and the need or want of portfolio managers to effectively get exposure, or hedge exposure to the influential Semi sector.

Current SOXX top weightings are INTC (8.91%), TSM (8.55%), BRCM (8.07%), TXN (7.91%), and AMAT (7.61%).

BlackRock’s iShares recently noted to us that short interest levels in SOXX as well as in related ETF, Market Vectors Semiconductor (SMH - News).

SMH tracks the Market Vectors U.S. Listed Semiconductor 25 Index, with heavy weightings to INTC and TSM (which make up 20.98% and 13.35% respectively of the ETF).

Other ETFs in the space include SPDR S&P Semiconductor (XSD - News) and PowerShares Dynamic Semiconductor (PSI - News).

On the leveraged front, for aggressive traders and/or speculators, Direxion Daily Semiconductor Bull 3X (SOXL - News) and Direxion Daily Semiconductor Bear 3X (SOXS - News) deliver 3 times the daily leveraged long and short exposure respectively, to the same PHLX Semiconductor Index that SOXX is tied to.

Year to date, SOXX has turned in the strongest performance of the group of non-leveraged Semi related ETFs mentioned above, having risen 1.98%. PSI has rallied 1.36% while XSD and SMH have lost 2.66% and 0.50% respectively during this time frame.

iShares PHLX SOX Semiconductor

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