Top Semiconductor ETFs to Watch in Q4 2020

For Q4 2020, the standout semiconductor ETFs are SMH, SOXX, and PSI.

Semiconductors are the backbone of modern technology, powering everything from smartphones and automobiles to defense systems and smart devices. Exchange-traded funds (ETFs) offer investors a diversified way to tap into this dynamic industry. Currently, four key ETFs track semiconductor stocks, excluding leveraged, inverse, and those with less than $50 million in assets under management (AUM). Leading semiconductor companies like Micron Technology, Inc. (MU) and Advanced Micro Devices, Inc. (AMD) are prominent within these funds. By investing in ETFs, investors mitigate risks associated with individual stocks through exposure to a broad portfolio of semiconductor firms. The semiconductor sector, as measured by the S&P 500 Semiconductors Sub-Industry Index, has significantly outpaced the broader market over the past year, with a 43.4% return compared to the S&P 500's 18.2%.

Key Insights

• The semiconductor sector has dramatically outperformed the general market in the last year.
• SMH, SOXX, and PSI lead in 1-year trailing total returns among semiconductor ETFs.
• Top holdings include Taiwan Semiconductor Manufacturing Co. Ltd., Qualcomm Inc., and Advanced Micro Devices Inc.

Leading the pack for Q4 2020 is the VanEck Vectors Semiconductor ETF (SMH). Below is an in-depth look at the top three semiconductor ETFs based on 1-year trailing returns as of August 20, 2020.

VanEck Vectors Semiconductor ETF (SMH)

• 1-Year Trailing Total Returns: 50.3%
• Expense Ratio: 0.35%
• Annual Dividend Yield: 1.24%
• 3-Month Average Daily Volume: 3,393,689
• Assets Under Management: $2.6 billion
• Inception Date: December 20, 2011
• Issuer: VanEck

SMH tracks the MVIS US Listed Semiconductor 25 Index, focusing on major semiconductor companies listed on U.S. exchanges from developed markets. Its top holdings include Taiwan Semiconductor Manufacturing Co., Ltd. (TSM), the largest global semiconductor foundry; NVIDIA Corp. (NVDA), a leader in graphics processing units and chips; and Intel Corp. (INTC), a key player in semiconductors and cloud computing.

iShares PHLX Semiconductor ETF (SOXX)

• 1-Year Trailing Total Returns: 46.2%
• Expense Ratio: 0.46%
• Annual Dividend Yield: 1.03%
• 3-Month Average Daily Volume: 752,783
• Assets Under Management: $3.5 billion
• Inception Date: July 10, 2001
• Issuer: iShares

SOXX maintains balanced exposure across about 125 stocks by capping top holdings at roughly 8%, blending both U.S. and international firms, and mixing large and smaller companies. Its leading holdings include Qualcomm Inc. (QCOM), a wireless services and semiconductor company; NVIDIA; and Texas Instruments, Inc. (TXN), a manufacturer of semiconductors and integrated circuits.

Invesco Dynamic Semiconductors ETF (PSI)

• 1-Year Trailing Total Returns: 41.8%
• Expense Ratio: 0.58%
• Annual Dividend Yield: 0.40%
• 3-Month Average Daily Volume: 31,448
• Assets Under Management: $292.5 million
• Inception Date: June 23, 2005
• Issuer: Invesco

PSI is a multi-cap ETF targeting growth-oriented semiconductor stocks, primarily focusing on small- and mid-cap U.S.-based companies. It follows the Dynamic Semiconductors Intellidex Index. Its top holdings include Advanced Micro Devices, NVIDIA, and Qualcomm.

Discover engaging topics and analytical content in Markets News as of 29-08-2020. The article titled " Top Semiconductor ETFs to Watch in Q4 2020 " provides new insights and practical guidance in the Markets News field. Each topic is meticulously analyzed to deliver actionable information to readers.

The topic " Top Semiconductor ETFs to Watch in Q4 2020 " helps you make smarter decisions within the Markets News category. All topics on our website are unique and offer valuable content for our audience.