A sector that has been notably volatile this earnings season amid a mixed bag in many of the reporting components is that of Semiconductors and we continue to see heavier than normal options activity in the space even in late October.
The November 47 puts traded in good size yesterday in SMH (Market Vectors Semiconductor, Expense Ratio 0.35%) which is rather heavy two names, INTC (>20%) and TSM (>14.5%), both of which have reported their quarterly results already.
In recent days there has been some smaller outflows in the fund, about $9 million out, into the recent impressive bounce back in the sector after a short lived gap down sell-off in early October. Volume has been heavy at times in SMH in the past few weeks as well, dwarfing the normal trading volume in the fund.
SMH has flattish net flows for the year, and remains the second largest “Semiconductor” focused ETF in the U.S. landscape, with approximately $317 million in assets under management. SOXX (iShares PHLX SOX Semiconductor Sector, Expense Ratio 0.47%) tends to be the barometer in this space from a sector standpoint, and this fund has nearly $500 million in AUM. SOXX has top end exposure that looks quite different than SMH, with MU (>8.4%), INTC (>8%), and TXN (8%) as the largest holdings.
Year to date SOXX has grown impressively, reeling in more than $175 million in net flows to date. Given the recent put activity in the space, it makes sense to look at “Bear” funds here as well, notably SOXS (Direxion Daily Semiconductor Bear 3X Shares, Expense Ratio 0.95%), which looks relatively small in terms of fund size ($19.8 million) but tends to get popular and has the potential to assets swell in short time periods.