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.

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