With semiconductor stocks and exchange traded funds (ETFs) roaring higher this year, some funds are being overlooked. That is the case with the SPDR S&P Semiconductor ETF (NYSEArca: XSD), but that chip ETF is up more than 34% year-to-date and could be poised to deliver more upside.
The equal-weight XSD “seeks to track a modified equal weighted index which provides the potential for unconcentrated industry exposure across large, mid and small cap stocks,” according to State Street.
Semiconductor stocks and sector-related ETFs have bounced back as tensions between the U.S. and China eased, the Wall Street Journal reports. The segment, though, is not out of the woods yet as the two countries hammer out the finer details on more delicate subjects, such as intellectual property, technology, cybersecurity, currency, agriculture and energy.
Semiconductor have exhibited high sensitivity to the trade war because China is a strong driver for the chip-making sector, which includes several fast areas of growth including gaming and artificial intelligence. If the trade war is renewed, the barriers will raise costs for many of these multi-national companies.
5 Non-Leveraged ETFs By Biggest YTD Gains
|Symbol||ETF Name||Expense Ratio||Total Assets ($MM)||YTD||Avg Volume||Previous Closing Price||1-Day Change|
|SOXX||iShares PHLXSemiconductor ETF||0.47%||$1,282.88||36.57%||680,360||$213.71||1.03%|
|FTXL||First Trust Nasdaq Semiconductor ETF||0.60%||$31.43||35.98%||12,876||$34.96||0.52%|
|SMH||VanEck Vectors Semiconductor ETF||0.35%||$986.75||35.87%||5,802,499||$118.59||0.81%|
|XSD||SPDR S&P Semiconductor ETF||0.35%||$372.70||35.72%||97,019||$87.71||1.03%|
|PSI||Invesco Dynamic Semiconductors ETF||0.61%||$202.26||32.32%||31,733||$58.61||0.98%|
This is a list of all Semiconductors ETFs traded in the USA which are currently tagged by ETF Database. * Assets and Average Volume as of 2019-04-23 20:15 UTC
Examining ‘XSD’ Semiconductor ETF
“Taking a look at the ETF called XSD, it’s pretty much the SOX in disguise, I favor the frenzy and euphoria that we are seeing now, is likely a 5th wave of a large impulse wave from the 2009 low,” reports FX Street. “It’s common to see Technology stocks being bid when traders and investors are chasing the market. We saw that into the Oct 2018 high as the FAANG stocks were being bid up. Today it’s not so much the FAANG stocks, but the semiconductor stocks, which is very reminiscent to what was seen into the 2000 tech bubble top.”
Home to nearly $369 million in assets under management, XSD holds 34 stocks with a weighted average market capitalization of $35.44 billion. None of the fund’s holdings exceed a weight of 4.52%. Qualcomm (NASDAQ: QCOM) is XSD’s largest component and that stock has recently been surging on the back of favorable news pertaining to litigation against Apple Inc. (NASDAQ: AAPL).
“Crossing referencing XSD to the SOX, whilst the SOX remains above 1477 a bit more upside could still be seen to end wave of wave 5, that is approximately the 82.00 – 80.00 area on XSD,” according to FX Street. “However until we see an obvious sign of a reversal on the SOX and XSD, then for now, I would respect the recent strength on the SOX/XSD above 1477/82.00 respectively, although I am actively looking for signs that the move from the Dec 2018 has finally burned out. When it turns and reverses, I suspect we see a swift and fast decline as today’s buyers become tomorrows sellers.”
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