Diversified Stock Portfolio: 5 Sector ETFs and International ETFs to Buy

3. First Trust Nasdaq Semiconductor ETF (NASDAQ:FTXL)

5-Year Performance as of September 26: 115.82%

The goal of the First Trust Nasdaq Semiconductor ETF (NASDAQ:FTXL) is to achieve investment results that align with the price and yield performance of the Nasdaq US Smart Semiconductor Index. This ETF aims to reflect the holdings of the Nasdaq US Smart Semiconductor Index to generate results that are highly correlated with the index. It was introduced on September 20, 2016, and as of September 26, 2023, it manages assets valued at $1.10 billion, featuring a portfolio of 32 stocks. The expense ratio for this ETF stands at 0.60%. The First Trust Nasdaq Semiconductor ETF (NASDAQ:FTXL) adds diversity to investors’ stock portfolios.

Broadcom Inc. (NASDAQ:AVGO) is one of the top holdings of the First Trust Nasdaq Semiconductor ETF (NASDAQ:FTXL). Broadcom Inc. (NASDAQ:AVGO) is a global company involved in the design, development, and provision of a wide range of semiconductor devices. Their primary focus lies in creating complex digital and mixed-signal devices based on complementary metal oxide semiconductor technology, along with analog III-V based products. The company functions through two segments – Semiconductor Solutions and Infrastructure Software.

According to Insider Monkey’s second quarter database, 72 hedge funds were bullish on Broadcom Inc. (NASDAQ:AVGO), same as the preceding quarter. Rajiv Jain’s GQG Partners is a significant stakeholder of the company, with 1.1 million shares worth $955.7 million.

FPA Crescent Fund made the following comment about Broadcom Inc. (NASDAQ:AVGO) in its Q2 2023 investor letter:

“In contrast to our short-lived ownership of Open Text, Broadcom Inc. (NASDAQ:AVGO) has been a holding for just short of five years. At the time of our original purchase, the company was primarily focused on driving organic growth in its existing semiconductor franchises and acquiring new ones when the opportunity presented itself. As potential acquisition candidates in the industry became scarce, management, led by highly regarded Hock Tan, pivoted to set their sights on the software industry, culminating in several acquisitions. Unlike Open Text, in this instance, after multiple discussions with senior management, we found ourselves comfortable with the company’s new strategy after re-examining the investment implications. We are glad we did, as it would be an understatement to say that Broadcom has gone from strength to strength over the past five years, improving operating margins, aggressively repurchasing shares, and increasing the dividend, all the while continuing to execute its M&A strategy flawlessly.”