5 Best Semiconductor ETFs

In this article, we discuss 5 best semiconductor ETFs. If you want to read our discussion on the semiconductor market, head over to 10 Best Semiconductor ETFs. 

5. Invesco Dynamic Semiconductors ETF (NYSE:PSI)

5 Year Performance as of August 31: 149.52%

Introduced in June 2005, Invesco Dynamic Semiconductors ETF (NYSE:PSI) tracks the Dynamic Semiconductor Intellide Index. Typically, the ETF allocates at least 90% of its total assets towards purchasing stocks that make up the index. Invesco Dynamic Semiconductors ETF (NYSE:PSI) aims to achieve a return on investment by thoroughly assessing firms using a range of criteria, such as price trends, earnings momentum, quality, management decisions, and intrinsic value. As of August 29, the ETF holds a portfolio of 32 stocks, while maintaining a total expense ratio of 0.55%. It is one of the best semiconductor ETFs to invest in. 

Analog Devices, Inc. (NASDAQ:ADI) is one of the major holdings of Invesco Dynamic Semiconductors ETF (NYSE:PSI). Analog Devices, Inc. (NASDAQ:ADI) specializes in the manufacture of integrated circuits, signal processing, and digital data solutions. According to Insider Monkey’s second quarter database, a total of 65 hedge funds were bullish on Analog Devices, Inc. (NASDAQ:ADI), as opposed to 73 hedge funds from the preceding quarter. 

Madison Investors Fund said this about Analog Devices, Inc. (NASDAQ:ADI) in its second quarter 2023 investor letter:

“The bottom five individual contributors for the quarter were U.S. Bancorp, Progressive, Analog Devices, Inc. (NASDAQ:ADI), Dollar Tree, and Danaher. Analog Devices and Danaher are both seeing end market demand moderate (in semiconductor and medical research, respectively) compared to the artificially high levels they experienced for two years due to the post-Covid chaos in supply chains. Despite these near-term dynamics, we think the longer-term outlooks remain excellent in both cases.”

4. iShares Semiconductor ETF (NASDAQ:SOXX)

5 Year Performance as of August 31: 168.43%

Next on our list of the best semiconductor ETFs is iShares Semiconductor ETF (NASDAQ:SOXX), which was introduced in July 2001. It aims to replicate the performance of the ICE Semiconductor Index, which consists of American semiconductor companies of different sizes. As of August 30, the ETF has invested in 33 companies, with net assets valued at $9.15 billion, while maintaining an expense ratio of 0.35%.

Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the significant holdings of the iShares Semiconductor ETF (NASDAQ:SOXX). Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the leading developers of processing units in the world. The company focuses on semiconductor operations. Advanced Micro Devices, Inc. (NASDAQ:AMD) has four main segments – Data Center, Client, Gaming, and Embedded. On August 1, the company announced a Q2 revenue of $5.36 billion and a non-GAAP EPS of $0.58, outperforming the market consensus by $40 million and $0.01, respectively.

According to Insider Monkey’s second quarter database, a total of 112 hedge funds were bullish on Advanced Micro Devices, Inc. (NASDAQ:AMD). In comparison, 91 hedge funds had held a similar position in the stock during the past quarter. 

L1 Capital International Fund had this to say about Advanced Micro Devices, Inc. (NASDAQ:AMD) in its second quarter 2023 investor letter:

“During the June 2023 quarter the AI bubble continued to inflate. Advanced Micro Devices, Inc. (NASDAQ:AMD), as a key challenger to Nvidia, will benefit from increased demand for its next generation semiconductor chips. AMD’s share price is reflecting very bullish sentiment and the share price has run ahead of a reasonable base case valuation. Accordingly, we divested our entire position and moved AMD to our Bench.”

3. SPDR S&P Semiconductor ETF (NYSE:XSD)

5 Year Performance as of August 31: 170.57%

SPDR S&P Semiconductor ETF (NYSE:XSD) was launched in January 2006, with the objective of achieving investment outcomes that generally match the overall performance of the S&P Semiconductor Select Industry Index. As of August 29, SPDR S&P Semiconductor ETF (NYSE:XSD) holds a portfolio of 38 stocks, with total assets under management of $1.54 billion. The fund features an expense ratio of 0.35%. SPDR S&P Semiconductor ETF (NYSE:XSD) is one of the best semiconductor ETFs to monitor. 

MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) is the largest holding of the SPDR S&P Semiconductor ETF (NYSE:XSD). MACOM Technology Solutions Holdings, Inc. (MTSI) is a global provider of analog semiconductor solutions, for wired and wireless applications. On August 3, the company announced its financial results for its fiscal third quarter ended June 30, 2023. The revenue came in at $148.5 million, along with a non-GAAP EPS of $0.54. While the revenue exceeded estimates by $1.14 million, the EPS was in line with the market consensus.

According to Insider Monkey’s second quarter database, 17 hedge funds were bullish on MACOM Technology Solutions Holdings, Inc. (MTSI). In comparison, 13 hedge funds had invested in the company during the past quarter. 

Artisan Partners said this about MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI)  in its Q3 2022 investor letter:

“MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) designs and manufactures high performance silicon and compound semiconductor analog/mixed signal chips used in the aerospace and defense, industrial, telecommunication and data center end markets. The company is led by a relatively new management team taking steps to accelerate topline growth and expand margins. The leadership team’s strategy is to addresses smaller, long-duration product cycle markets in which it can provide a differentiated offering, especially in compound semis such as GaAs, Al-GaAs, InP and GaN-on-SiC, using its design expertise and its US-trusted foundry / Department of Defense approved status. Rolling out several new, higher margin products and expanding into adjacent end markets such as auto and consumer should drive a compelling profit cycle in the periods ahead.”

2. VanEck Semiconductor ETF (NASDAQ:SMH)

5 Year Performance as of August 31: 186.98%

Launched in December 2011, VanEck Semiconductor ETF (NASDAQ:SMH) aims to track the performance of the MVIS US Listed Semiconductor 25 Index, which takes into consideration companies engaged in semiconductor production and applications. As of August 30, the ETF holds total net assets worth $10.07 billion, while featuring an expense ratio of 0.35%. VanEck Semiconductor ETF (NASDAQ:SMH) is one of the best semiconductor ETFs. 

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the largest holdings for VanEck Semiconductor ETF (NASDAQ:SMH). Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a global manufacturer of integrated circuits and other semiconductor products. According to Insider Monkey’s second quarter database, 121 hedge funds were bullish on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), as opposed to 102 hedge funds from the last quarter.

Baron Emerging Markets Fund said this about Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its first quarter 2023 investor letter:

“Semiconductor giant Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) contributed in the first quarter due to easing geopolitical concerns and expectations for end-demand recovery later in 2023. We retain conviction that Taiwan Semi’s technological leadership; pricing power; and exposure to secular growth markets, including high-performance computing, automotive, 5G, and IoT; will allow the company to sustain strong earnings growth over the next several years.”

1. GraniteShares 1.5x Long NVDA Daily ETF (NASDAQ:NVDL)

5 Year Performance as of August 31: 351.55%

Launched in December 2022, GraniteShares 1.5x Long NVDA Daily ETF (NASDAQ:NVDL) aims to achieve daily returns that are 1.5 times (150%) of the daily percentage fluctuations in the value of NVIDIA Corporation (NASDAQ:NVDA), net of fees and costs. As of August 31, the ETF operates with an expense ratio of 1.15%. GraniteShares 1.5x Long NVDA Daily ETF (NASDAQ:NVDL) is one of the best semiconductor ETFs to buy.  

Mairs & Power Growth Fund said this about NVIDIA Corporation (NASDAQ:NVDA) in its second quarter 2023 investor letter:

“Regarding stock selection in the first half, NVIDIA Corporation (NASDAQ:NVDA) was a massive outperformer, up 189.54%. Amazon and Microsoft were also positive contributors, up 55.19% and 42.66%, respectively. All three stocks benefited from a renewed interest in growth stocks by investors in the first half of the year. Nvidia is the leading provider of processors used for artificial intelligence (AI) computation for both learning and inferencing, and its stock rallied significantly on a massive earnings report in the first quarter as cloud data center companies invested heavily in AI.”

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