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Semiconductor ETF (SMH) Hits New 52-Week High

Sanghamitra Saha

For investors seeking momentum, VanEck Vectors Semiconductor ETF SMH is probably on radar now. The fund just hit a 52-week high, which is up roughly 39.4% from its 52-week low of $80.71/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

SMH in Focus

The fund looks to track the price and yield performance of MVIS US Listed Semiconductor 25 Index. The fund has Intel, Taiwan Semiconductor Manufacturing and Texas Instruments as its top three holdings. It charges 35 bps in fees (see all Technology ETFs here).

Why the Move?

Most recently, the Financial Times reported that top U.S. and Chinese officials have resolved most of the issues pertaining to trade conflicts but are still negotiating on how to enact the agreement, as quoted on Reuters.

In late February, President Donald Trump announced that he is delaying the increase of tariffs on about $200 billion in Chinese goods, citing “substantial progress” in trade talks with Beijing. With semiconductor stocks having considerable revenue exposure to China, the fund has every reason to hit a high.

Also, sentiments have improved in bitcoin investing of late. Investors should note that mining of cryptocurrencies needs the usage of semiconductors. This also explains the recent rally in semiconductor ETFs.

More Gains Ahead?

The fund has a Zacks Rank #2 (Buy). Also, the fund has a positive weighted alpha of 16.50, which hints at more gains. So, there is definitely still some promise for those who want to ride on this surging ETF a little longer.

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VanEck Vectors Semiconductor ETF (SMH): ETF Research Reports
 
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