SOXX allocates 3.7% to Taiwan Semiconductor, but the stock is SMH’s second-largest holding behind Intel (NasdaqGS: INTC) at a weight of 15.7%. That is triple the weight SMH allocates to Micron Technology (NasdaqGS: MU), the ETF’s third-largest holding.
“If it were not for Russian equities falling on account of the new round of sanctions the Taiwan Taiex would be showing the largest negative risk-adjusted return in equities for the second day running. Taiwan Semiconductor closed down 4.6% last night. Taiwan Semiconductor holds a ~12% weight in the Taiex. This is a dramatic fall as it is not considered a high beta stock,” said Azous.
The iShares MSCI Taiwan ETF (NYSEArca: EWT) is off 1.1% Thursday, making it one of the worst-performing single-country emerging markets ETFs on the day. EWT came into Thursday with a 2014 gain of 15.2%, but the ETF’s 20.9% to Taiwan Semiconductor and 57.8% to Taiwan’s tech sector are proving too cumbersome for the fund to endure today. [Tech Ties Boost Taiwan ETF]
Market Vectors Semiconductor ETF
Tom Lydon’s clients own shares of Apple and Intel.