ETF Spotlight: Semiconductor HOLDRS (SMH)

June 21st at 4:05pm by Tom Lydon

ETF Spotlight on Semiconductor HOLDRS (NYSEArca: SMH), part of an ongoing series.

Assets: $451.4 million

Objective: Semiconductor HOLDRS represent ownership in U.S.-traded common stock of a group of specified companies that develop, manufacture and market semiconductors.

Holdings: Top holdings include: Texas Instruments (NasdaqGS: TXN) 21.21%, Intel Corp (NasdaqGS: INTC) 19.72%, Applied Materials (NasdaqGS: AMAT) 9.95%, Altera Corp (NasdaqGS: ALTR) 7.94% and Analog Devices (NasdaqGS: ADI) 6.79%.

What You Should Know

  • SMH has 19 holdings.
  • HOLDRS have a different structure than most other ETFs. HOLDRS are static baskets of stocks, so they don’t update like market indexes. If a stock drops out due to a bankruptcy or merger, it isn’t replaced.
  • The fund provides cheap and liquid exposure to the semiconductor industry.
  • Semiconductor firms are more cyclical compared to other tech sector companies due to high R&D expenses and capital costs for manufacturing facilities, short product life cycles, and cyclical end demand, according to Morningstar analysts.

The Latest News

  • Semiconductor stocks surged on Tuesday, pushing SMH to a 2% gain.
  • Texas Instruments (NYSE: TXN) recently warned its second-quarter profit and revenue might come in weaker than expected.
  • The semiconductor ETF has been crushed over the past month as some analysts see a bearish “double top” pattern unfolding. [Texas Instruments Warns as Semiconductor ETF Sees Double Top.]
  • According to technical analyst Chris Kimble, the semiconductor sector has been a leading indicator for the Dow in the past few years, shooting ahead and dropping out before the Dow.

For past stories in this series, visit our ETF Spotlight category.

Semiconductor HOLDRS



Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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