We have seen notable inflows in SMH (Market Vectors Semiconductor, Expense Ratio 0.35%), which is the largest “Semiconductor Equity” ETF in the U.S. listed landscape with about $594 million in assets under management.
Lately the fund has taken in more than $200 million via creation activity although volume has been fairly muted in the product and below average in recent sessions. Top holdings in SMH are
INTC (>19.3%), TSM (>15.7%), and ASML (>5.5%). We note the heavy top end exposure to two stocks, INTC and TSM, with the weightings there accounting for about 35% of the overall portfolio.
Elsewhere, in a well-timed note from Direxion this morning in regard to the Semiconductor space, their leveraged long ETF SOXL (Direxion Daily Semiconductor Bull 3X, Expense Ratio 0.95%) is in focus as a potential trade idea (for the full piece, please contact the trading desk).
In their words when examining market technicals specific to the Semi space, “As the U.S. equity market continues to hold its ground, semiconductor stocks may be showing signs of upward
trajectory for a very short term trade. The RSI has continued to move higher, inching towards 60 and beyond. Currently at $59.20 as of the 5/18/15 market close. The MACD’s move slightly above the zero line into positive territory, combined with a higher DMI+ vs DMI-, indicates a stronger technical upward trending confluence.”
Year to date SOXL has seen very modest flows, pulling in only about $2.5 million but it still remains the fourth largest “Semi” ETF in terms of assets under management ($169 million) which
is impressive given its daily/leveraged nature, and perhaps suggesting that some are using the product as more than just a daily trading vehicle and may be bullish for longer periods of time in this sector. Ranking ahead of SOXL in terms of asset size in the space are, XSD (SPDR S&P Semiconductor, Expense Ratio 0.35%, $188 million in AUM) and SOXX (iShares PHLX SOX Semiconductor Sector, Expense Ratio 0.47%, $465 million in AUM).