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.