By way of an almost 15.3% weight to Taiwan Semiconductor (NYSE: TSM), SMH is heavily exposed to demand for Apple products, such as the iPhone and iPad, because Taiwan Semiconductor is a major component supplier to Apple. Apple and SMH have traded in near lockstep this year with the stock gaining 24% while the ETF is up 23.4%. [Tech Ties Lift Taiwan ETF]
The leader among chip ETFs this year has been the SPDR S&P Semiconductor ETF (NYSEArca: XSD). With a gain of 27%, XSD is not just the best-performing non-leveraged chip ETF, it is also one of the top non-leveraged tech ETFs of any type.
Investors have poured $70.4 million into XSD this year, or 35% of the ETF’s $199.4 million assets under management. That is not surprising as all five of XSD’s top-five holdings are up more than 50% this year with three having more than doubled. Further highlighting XSD’s 2014 strength is this anecdote: First Solar (NasdaqGS: FSLR) is the worst performer among the ETF’s top-10 holdings and that stock is up more than 23% this year. [This Tech ETF is Tops]
SPDR S&P Semiconductor ETF