Semiconductor exchange traded funds (ETFs) have rallied in the past few weeks. Carl Delfeld for ETFXRAY.com points out the launch of Windows Vista did not prompt the mass PC upgrades many expected. Chip manufacturers expanded production in anticipation of memory demand for Vista. With large supplies, prices dropped. But now, chipmakers are reporting strong earnings and lifting the ETFs with them, reports Trang Ho for Investor’s Business Daily.
The ETF Semiconductors HOLDRs (SMH) is up 10% year-to-date, with Texas Instruments (TXN) as the top holding, followed by Intel (INTC) and Applied Materials (AMAT). The market-cap weighted iShares Goldman Sachs Semiconductor (IGW) is up 7% year-to-date and holds 56 stocks, with Intel and Texas Instruments the largest chip companies, making up 18.2%. Other semiconductor ETFs include PowerShares Dynamic Semiconductors (PSI), which has 30 holdings, the largest holding, Linear Technologies (LLTC), makes up only 5.4% of the ETF. PSI is up 12%. SPDR S&P Semiconductor (XSD) is up 6% and ProShares Ultra Semiconductors (USD) began trading in February.
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.