The VanEck Vectors Semiconductor (SMH) has $530 million in assets, but trades 2.5 million shares on a daily basis. While subindustry exposure is similar to the SOXX index, exposure to Taiwan is much greater, with CFRA buy-recommended Taiwan Semiconductor Manufacturing as the largest holding. SMH has a 0.35% net expense ratio. Both SOXX and SMH have hefty weightings in large-cap stocks.
The SPDR S&P Semiconductor (XSD) has $300 million in assets and trades 125,000 shares on a daily basis. Unlike SOXX and SMH, XSD only holds semiconductor stocks and is equally weighted. As such, midcaps such as CFRA buy-recommended Monolithic Power Systems is of similar size in the portfolio as Texas Instruments. The ETF has a 0.35% net expense ratio.
The PowerShares Dynamic Semiconductors Portfolio (PSI) has $133 million in assets and trades 50,000 shares on a daily basis. Unlike the three of other ETFs whose holdings are relatively static, PSI tracks an index based on value, quality and momentum characteristics; the index of 30 stocks is rebalanced and reconstituted quarterly. ADI and AVGO are two of the ETF’s semiconductor holdings, but the PSI recently had more exposure to semi equipment stocks than its peers.
In the past year, PSI has been the strongest performer, rising 60%. However, CFRA looks at ETFs in part as a basket of securities. We have rankings on more than 950 equity ETFs, based on a combination of holdings-level analysis, technical trends and cost factors.
At the time of writing, neither the author nor his firm held any of the securities mentioned. Todd Rosenbluth is director of ETF and mutual fund research at CFRA, an independent research firm that acquired S&P Global Market Intelligence's equity and fund business in October 2016. He can be reached at [email protected]. Follow him at @ToddCFRA