ETF Trends
ETF Trends

There are four dedicated, non-leveraged semiconductor exchange traded funds. Each goes about its business in different or slightly different fashion and those differences have been highlighted in a year in which Dow component Intel (NasdaqGS: INTC) has struggled.

Shares of Intel are down more than 10% year-to-date, making it just one of two Dow stocks to suffer that fate. American Express (NYSE: AXP) is the other. Intel’s slide and those of Qualcomm (NasdaqGS: QCOM) and Micron Technology (NadaqGS: MU) highlight important differences between semiconductor ETFs.

“Intel, Qualcomm Inc. and Micron Technology Inc. were three of the four biggest weightings in the Philadelphia Semiconductor Index at the end of 2014 and each has slumped about 9 percent or more this year. The three stocks, plus SanDisk Corp. (NasdaqGS: SNDK), are the biggest drags on the gauge,” reports Jospeh Ciolli for Bloomberg.

The $543.9 million iShares PHLX Semiconductor ETF (NasdaqGM: SOXX) allocates over a quarter of its combined weight to Intel, Qualcomm, Micron and SanDisk. SOXX is up just 1.4% this year compared to a 4.3% gain for the Nasdaq Composite. [Intel Reveals Problems for Chip ETFs]

Another Intel-heavy ETF, the Market Vectors Semiconductor ETF (NYSEArca: SMH), is higher by just 1.6%. Intel is 18.7% of SMH’s weight. The $368.8 million ETF also allocates 5% to Micron. ETFs with significantly reduced weights to aforementioned quartet of semiconductor laggards have performed notably better.

For example, the $179 million SPDR S&P Semiconductor ETF (NYSEArca: XSD), an equal-weight ETF, has a 5% combined weight to Intel and Micron. Qualcomm and SanDisk are not XSD holdings. Those differences between XSD and SOXX are palpable in terms of returns as XSD has surged 10% this year. XSD is higher by 29% over the past year, an advantage of more than 1,000 basis points over XSD. [A Surprising Lead Among Tech ETFs]

The PowerShares Dynamic Semiconductors Portfolio (NYSEArca: PSI), the smallest of the ETFs mentioned here with $82.2 million in assets under management, is higher by 5.7% this year. PSI tracks the Dynamic Semiconductor Intellidex Index, which evaluates companies for inclusion based on “price momentum, earnings momentum, quality, management action, and value, according to PowerShares.

That indexing methodology means PSI allocates just over 9% of its combined weight Intel and Micron, but like XSD, PSI holds not Qualcomm or SanDisk. Up 31% over the past year, the PowerShares offering is the top-performing non-leveraged semiconductor ETF over that time. PSI was also the best non-leveraged technology ETF in 2014. [This Year’s top Tech ETF]

SPDR S&P Semiconductor ETF