There are four dedicated, non-leveraged semiconductor exchange traded funds. Each goes about its business in different or slightly different fashion and those differences have been highlighted in a year in which Dow component Intel (NasdaqGS: INTC) has struggled.
Shares of Intel are down more than 10% year-to-date, making it just one of two Dow stocks to suffer that fate. American Express (NYSE: AXP) is the other. Intel’s slide and those of Qualcomm (NasdaqGS: QCOM) and Micron Technology (NadaqGS: MU) highlight important differences between semiconductor ETFs.
“Intel, Qualcomm Inc. and Micron Technology Inc. were three of the four biggest weightings in the Philadelphia Semiconductor Index at the end of 2014 and each has slumped about 9 percent or more this year. The three stocks, plus SanDisk Corp. (NasdaqGS: SNDK), are the biggest drags on the gauge,” reports Jospeh Ciolli for Bloomberg.
The $543.9 million iShares PHLX Semiconductor ETF (NasdaqGM: SOXX) allocates over a quarter of its combined weight to Intel, Qualcomm, Micron and SanDisk. SOXX is up just 1.4% this year compared to a 4.3% gain for the Nasdaq Composite. [Intel Reveals Problems for Chip ETFs]
Another Intel-heavy ETF, the Market Vectors Semiconductor ETF (NYSEArca: SMH), is higher by just 1.6%. Intel is 18.7% of SMH’s weight. The $368.8 million ETF also allocates 5% to Micron. ETFs with significantly reduced weights to aforementioned quartet of semiconductor laggards have performed notably better.