SMH has an almost 2.6% weight to Altera and a nearly 19.3% weight to Intel, making that stock the ETF’s largest holding. Amid last week’s retrenchment in the semiconductor space, investors pulled almost $255 million from SMH. [More Pain for Chip ETFs]
Adding to the concern surrounding chip stocks and the relevant ETFs is the notion that veracity of the semiconductor trade is now being threatened, which could prompt professional traders to take profits on what, to this point, has been a lengthy, rewarding trade from the long side. Increased deal-making in the industry could serve to change that, particularly if larger players decide to engage smaller chip manufacturers that recently experienced significant drops in share price.
The $549 million SOXX, which has lagged XSD and SMH over the past year, allocates about 10% of its combined weight to Intel and Altera.
SPDR S&P Semiconductor ETF