The global semiconductor shortage that wreaked havoc on industries has begun to reverse its course.
In a positive development across supply chains and the technology sector as a whole, global semiconductor shortages are beginning to dissipate with larger chip producers like Taiwan Semi and Samsung running at full production capacity, which is imperative for manufacturing across automotive, industrial, communications, and computing industries, ALPS wrote in a recent insight.
Investors looking to gain exposure to the industry should consider the ALPS Disruptive Technologies ETF (DTEC). DTEC covers 10 different themes within the tech sector, including healthcare innovation, the internet of things, clean energy and smart grid, cloud computing, data and analytics, fintech, robotics, AI, cybersecurity, 3D printing, and mobile payments.
The index selects 10 companies from each theme according to a proprietary model and equally weights each security. This effectively gives each theme and each company equal representation.
“Softening demand for semiconductor chips used in consumer devices (PCs, phones, tablets, etc.) should also allow for increased production of leading-edge chips used by DTEC’s underlying companies within disruptive technology themes that tend to remain relatively strong during periods of economic weakness,” ALPS wrote.
Global supply chains in the aggregate are showing key signs of easing stress and shortages, which has led to the recent risk-on sentiment for growth and technology stocks as investors speculate whether the Fed’s actions are already having their intended effects, according to ALPS.
ALPS said the Global Supply Chain Pressure Index (GSCPI), as measured by freight, Purchasing Managers’ Index (PMI), and Producer Price Index (PPI), have recently signaled the worst of the global supply chain crisis may be behind us.
Other funds that offer exposure to technology equities include the ProShares S&P Technology Dividend Aristocrats ETF (TDV), the First Trust NASDAQTechnology Dividend Index Fund (TDIV), and the BlueStar Israel Technology ETF (ITEQ).
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