After a March dive, the semiconductor sector is now soaring, which could fuel investors’ appetite for chipmakers and their associated ETFs. Technology as a sector itself is muting the effects of the coronavirus pandemic—semiconductors included.
“After a powerful rally in chip manufacturer shares since the March dip, there’s now little room for these companies to make any mistakes,” an Investing.com article noted. “Investors have built a strong bullish case for the sector, hoping the segment will emerge unscathed from the coronavirus-induced recession.”
“The Philadelphia Semiconductor Index, which includes some of the world’s largest chipmakers such as Intel (NASDAQ: INTC), NVIDIA (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD), has surged about 55% since March, far exceeding the S&P 500’s 37% rise during the same period,” the article added.
The latest signal from some of the sector’s top players is that this rally might pick up additional steam in upcoming weeks.
Here are three ETFs to look at for semiconductor exposure:
VanEck Vectors Semiconductor ETF (NYSEArca: SMH): seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the MVIS® US Listed Semiconductor 25 Index. The fund normally invests at least 80% of its total assets in securities that comprise the fund’s benchmark index. The index includes common stocks and depositary receipts of U.S. exchange-listed companies in the semiconductor industry. Such companies may include medium-capitalization companies and foreign companies that are listed on a U.S. exchange.
iShares PHLX Semiconductor ETF (NasdaqGM: SOXX): seeks to track the investment results of the PHLX Semiconductor Sector Index composed of U.S. equities in the semiconductor sector. The fund generally invests at least 90% of its assets in securities of the underlying index and in depositary receipts representing securities of the underlying index. The underlying index measures the performance of U.S.-traded securities of companies engaged in the semiconductor business. T
Direxion Daily Semiconductor Bull 3X ETF (NYSEArca: SOXL): for traders seeking a leveraged trade, SOXL seeks daily investment results, before fees and expenses, of 300% of the daily performance of the PHLX Semiconductor Sector Index. The fund, under normal circumstances, invests at least 80% of its net assets in financial instruments, such as swap agreements, and securities of the index, ETFs that track the index and other financial instruments that provide daily leveraged exposure to the index or ETFs that track the index. The index measures the performance of domestic companies engaged in the design, distribution, manufacture and sale of semiconductors.
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