Equity: U.S. Semiconductors

XSD Top Performer Intra-day
Price $63.92
Today’s Change +0.76%(1.20)
4:00pm 05/24/2017
PSI Bottom Performer Intra-day
Price $44.47
Today’s Change +0.27%(0.61)
4:00pm 05/24/2017
  • Overview
  • Efficiency
  • Tradability
  • Fit

ETF.com Insight

The US semiconductors segment isnt investible in diversified ETF form without modifications. After all, it is dominated by Intel, which makes up around a third of our neutral benchmark. TheSOXX comes closest (although not that close) to the broad semiconductors market. three US semiconductors ETFs have chosen unique methods to address the concentration issue and diminish Intel's influence. SOXX comes closest to the broad semiconductors market by using a market-cap-weighted index and capping individual securities at 8%. The other two ETFs dont even try mimicking the industry at large: XSD equally weights its broad portfolio and PSI uses a quantitative model to try to pick outperformers and weight them in tiers. The resulting portfolios arent bad, just different. All three ETFs tilt toward smaller growth companies, since Intel's excess weight must be redistributed somewhere. Expectedly, this tilt is most pronounced in XSD although still prominent in SOXX and PSI. XSD's equal-weighting scheme tilts it far from our neutral benchmark but its selected companies capture the industry at large. SOXX and PSI allocate a large portion of their portfolio to semiconductor equipment & testing companies—a similar, but not right-down-the-middle, industry. While theres no perfect semiconductors fund, XSD is the clear winner when it comes to costs. However, very large or active traders may prefer SOXXs greater liquidity. Still other investors may be intrigued by PSIs quant model despite its higher costs. Overall, XSD gets a nod on our Opportunities List for its mostly pure exposure to the semiconductor space and its low costs, but the right choice really comes down to individual preferences and risk tolerances. (Insight updated 05/24/17)

All Funds (4)

XSD $320.3 M 320298931.55 Broadest portfolio

A 64
E
94
94
T
95
95
F
64
64

PSI $265.33 M 265326000 Quant model

B 65
E
87
87
T
92
92
F
65
65

FTXL $20.68 M 20677571.6938 N/A

N/A 0
E
0
-1
T
0
-1
F
0
-1

SOXX $998.76 M 998761565 Most tradable

A 76
E
90
90
T
98
98
F
76
76

ETF.com Grade as 05/18/17

Equity: U.S. Semiconductors

1 Year Total Return NAV
Performance  [as of 05/23/17] 1 Month 3 Month YTD 1 Year 3 Years 5 Years 10 Years
Benchmark: Thomson Reuters US Semiconductors5.76%7.27%14.05%50.12%23.14%20.96%--
A 64.114704XSD320298931.55XSDSPDR S&P Semiconductor ETF6.47%3.58%12.73%47.30%23.49%24.59%10.07%
B 65.358531PSI265326000PSIPowerShares Dynamic Semiconductors Portfolio6.12%10.94%22.47%74.30%29.63%26.08%9.20%
N/A 0FTXL20677571.6938FTXLFirst Trust Nasdaq Semiconductor ETF4.16%6.10%12.04%--------
A 75.990681SOXX998761565SOXXiShares PHLX Semiconductor ETF8.11%8.55%18.67%63.13%23.99%25.34%9.55%
All returns over 1 year are annualized. All returns are total returns unless otherwise stated.

ETF.com Efficiency Insight

All three US semiconductors funds do a reasonably good job in Efficiency, with XSD and SOXX beating out PSI. They have widely varying expense ratios: XSD is the cheapest, while SOXX and PSIAll three US semiconductors funds do a reasonably good job in Efficiency. are more expensive alternatives. PSI may actually be more expensive than it first appears—it has tended to lag its index by significantly more than its expense ratio. Tracking differences follow in the same order as expense ratios with XSD shining, SOXX with moderate results and PSI with sub-par tracking. While none of the funds is exactly a bargain by US equity ETF standards, they are all tax efficient as they have managed to avoid capital gains payouts over their lengthy history. From a closure risk perspective, the clear stalwart in the space is SOXX which, with over $500M in assets, has captured the majority of segment assets. XSDs $200 million in AUM is also sufficient to keep closure risk at bay, but PSI's lesser asset base could elevate closure risk moving forward. (Insight updated 05/24/17)

All Funds (4)

94
94.486406
87
86.742942
N/A
0
90
90.261894

ETF.com Grade as 05/18/17

Equity: U.S. Semiconductors

Tracking Difference (12 Month)

Ticker Expense Ratio Median Max. Upside Max. Downside Max LT/ST Cap Gains Rate Rule Legal Structure Fund Closure Risk Efficiency
PSI PowerShares Dynamic Semiconductors Portfolio 0.63% -1.03% -0.68% -1.34% 20.00% / 39.60% Low 86.742942
XSD SPDR S&P Semiconductor ETF 0.35% -0.47% -0.26% -0.65% 20.00% / 39.60% Low 94.486406
FTXL First Trust Nasdaq Semiconductor ETF 0.60% -- -- -- 20.00% / 39.60% Medium 0
SOXX iShares PHLX Semiconductor ETF -0.85% -0.47% -1.18% 20.00% / 39.60% Low 90.261894

ETF.com Tradability Insight

SOXX is easily the most liquid ETF in the US semiconductor segment, with over $20 million changing hands on most days. Of the remaining two US semiconductor ETFs, XSD takes the cake with aSOXX is currently the most liquid ETF in the US semiconductor segment. median trading volume north of $3 million while PSI comes in a bit shorter than the others with more than $700K. Investors will need to be very careful executing trades in PSI with its low volume and wide spreads. Expectedly, the most heavily traded funds in the segment also sport the tightest spreads: SOXX's and XSD's average spreads are a step above that of PSI's. Wide spreads increase trading costs, which can eat into returns.
Investors looking to trade in size, however, may do well in any of the three funds as all earn perfect block liquidity scores: Talk to a liquidity provider to trade blocks of a few thousand shares or more.
Limit orders are a good way for retail investors to control trading costs (Insight updated 05/24/17)

All Funds (4)

95
95.39091
92
91.508506
N/A
0
98
97.928017

ETF.com Grade as 05/18/17

Equity: U.S. Semiconductors

Ticker Median Daily Volume ($) Average Spread Creation Unit/Day Market Hours Overlap Underlying Volume/Unit % Creation Cost Per Unit (%) Impediment to Creations Score - Tradability
PSI PowerShares Dynamic Semiconductors Portfolio $3.15 M 0.20% 1.51 100.00% 0.21% 0.02% None 91.508506
XSD SPDR S&P Semiconductor ETF $4.03 M 0.07% 1.33 100.00% 0.24% 0.01% None 95.39091
FTXL First Trust Nasdaq Semiconductor ETF $91.91 K 0.48% 0.07 100.00% 0.07% 0.04% None 0
SOXX iShares PHLX Semiconductor ETF $58.24 M 8.80 100.00% 0.14% 0.00% None 97.928017
Spread History
Premium/Discount History

ETF.com/ Block Liquidity

PSI
5
4
3
2
1
XSD
5
4
3
2
1
FTXL
5
4
3
2
1
SOXX
5
4
3
2
1

This measurement shows how easy it is to trade 25,000 shares of each ETF.

ETF.com Fit Insight

None of the funds in the US semiconductors segment fits the industry particularly well—a function of its highly concentrated domination by Intel (roughly a third of our neutralSOXX includes US-listed foreign companies, like Taiwan Semiconductor benchmark) that traditional diversified ETFs cant replicate. Still, none of the ETFs in the segment handles the redistribution of Intel's weight perfectly. SOXX attempts to create a more diversified portfolio by capping individual security weights in its otherwise-market-cap-weighted index at 8%—a sensible rule. However, it expands its selection universe beyond pure-play semiconductor companies to include securities from related industries like semiconductor equipment & testing and computer hardware. It also includes US-listed foreign companies, like Taiwan Semiconductor—one of its top holdings. This creates a broad portfolio with a bit of international flair, which may be fine if investors want to cast a wide net. XSD has the opposite problem - its selection universe is largely US semiconductor companies, but its equal-weighting scheme ends up tilting XSD even further from our neutral benchmark. Meanwhile, PSI uses a quant model that attempts to pick winners— its loose selection criteria gives the fund more exposure to semiconductor equipment & testing companies. It also uses a tiered equal-weighting scheme, tilting its portfolio even further away from mega-cap domination. All three funds tilt toward smaller growth companies. The uncapped neutral benchmark has a weighted average market cap of $60+ billion, while SOXX ($45 billion), PSI ($20 billion) and XSD ($13 billion) all tilt significantly smaller. XSD is tilted the furthest toward small-cap growth companies, in part because it holds more securities than its competitors, and every additional security in an equal-weighted basket pulls more weight away from the biggest ones. (Insight updated 05/24/17)

All Funds (4)

65
65.358531
64
64.114704
N/A
0
76
75.990681

ETF.com Grade as 05/18/17

Equity: U.S. Semiconductors