In this piece we will take a look at the top five semiconductor ETFs to buy in 2022. For a primer on the semiconductor industry and more ETFs, take a look at Top 10 Semiconductor ETFs to Buy in 2022.
5. Direxion Daily Semiconductor Bear 3X Shares (NYSE:SOXS)
The Direxion Daily Semiconductor Bear 3X Shares (NYSE:SOXS) is another ETF for the bearish investor. This fund allows to profit from a downturn in semiconductor prices. It seeks to amplify its daily tracked index performance by 3x, which then leaves space for hefty gains for the careful investor but also opens up room for hefty losses. The Direxion Daily Semiconductor Bear 3X Shares (NYSE:SOXS) consists of companies based in the U.S. and it has $311 million in assets under management.
As is the case with several other semiconductor ETFs, the Direxion Daily Semiconductor Bear 3X Shares (NYSE:SOXS)’s largest holdings also consist of NVIDIA Corporation (NASDAQ:NVDA). Apart from NVIDIA, however, the fund has 7% of its assets tied up in Advanced Micro Devices, Inc. (NASDAQ:AMD). AMD is one of the few companies in the world that is licensed to design and sell chips on the x86 microarchitecture. This results in higher barriers to entry to its markets and limits it to dealing with only one rival, namely the chip behemoth Intel Corporation (NASDAQ:INTC).
Insider Monkey scanned 912 hedge fund holdings for the first quarter of this year to discover that 83 had bought Advanced Micro Devices, Inc. (NASDAQ:AMD)’s shares. Out of these, Ken Fisher’s Fisher Asset Management is the firm’s largest shareholder with a $2.6 billion stake.
4. Invesco Dynamic Semiconductors ETF (NYSE:PSI)
The Invesco Dynamic Semiconductors ETF (NYSE:PSI) aims to invest 90% of its assets into the Dynamic Semiconductor Intellidex Index, which is a list of U.S. stocks that have been gauged through a proprietary calculation to have good capital appreciation. The ETF consists of 30 U.S. chip companies that have been evaluated through their earnings and price momentum, management strengths, and other metrics. It has a market value of $522 million as of July 2022.
The largest component firm of the Invesco Dynamic Semiconductors ETF (NYSE:PSI) is the San Diego, California semiconductor designer QUALCOMM Incorporated (NASDAQ:QCOM). QUALCOMM is the world’s largest supplier of smartphone processors, with its products powering the bulk of devices running Android. Additionally, the firm is also developing products for connected automobiles and the Internet of Things (IoT) devices.
Out of the 912 hedge funds part of Insider Monkey’s Q1 2022 survey, 73 had invested in QUALCOMM Incorporated (NASDAQ:QCOM). Panayotis Takis Sparaggis’s Alkeon Capital Management is the company’s largest shareholder with a $626 million stake courtesy of 4 million shares.
3. SPDR S&P Semiconductor ETF (NYSE:XSD)
The SPDR S&P Semiconductor ETF (NYSE:XSD) tracks the performance of the S&P Semiconductor Select Industry Index, which is a subsegment of the S&P Total Market Index that deals with the semiconductor industry. It is run by the State Street Global Advisors Funds Management Inc. The fund consists of 40 companies, has a market value of $42.5 million, a price to book (P/B) ratio of 3.17, and an estimated earnings per share (EPS) growth of 18.98%.
Out of its 40 constituent companies, the largest share of investment is in Impinj, Inc. (NASDAQ:PI) which is a specialized chip company. The firm provides devices such as miniature radios on chip that allow companies to track items in warehouses and supply chains, alongside providing retailers with the option of self checkout.
Impinj, Inc. (NASDAQ:PI) saw 22 investors out of the 912 hedge funds polled by Insider Monkey for this year’s first quarter. Its largest shareholder is Daniel Patrick Gibson’s Sylebra Capital Management. It owns 3.3 million shares that are worth $215 million.
2. iShares Semiconductor ETF (NASDAQ:SOXX)
iShares Semiconductor ETF (NASDAQ:SOXX) is a $6.4 billion ETF fund that was set up in 2001. It tracks the ICE Semiconductor Index (TR) and consists of 30 companies that operate in the U.S. The iShares Semiconductor ETF (NASDAQ:SOXX)’s 30 day SEC yield, which tracks its returns after management expenses have been accounted for, is 1.15% as of June 2022. Additionally, the fund has a price to book ratio of 4.46 and a price to earnings ratio of 18.67.
The largest holding of this semiconductor ETF is Broadcom Inc. (NASDAQ:AVGO), which is an American company that deals with selling communication products. Broadcom Inc. (NASDAQ:AVGO) accounts for 8.14% of the fund’s value, and the company is currently looking to expand from its core business to cloud computing by acquiring VMWare.
Insider Monkey’s Q1 2022 survey of 912 hedge funds revealed that 71 had held a stake in Broadcom Inc. (NASDAQ:AVGO). The firm’s largest investor is Ken Fisher’s Fisher Asset Management which owns 1.4 million shares that are worth $894 million.
1. VanEck Semiconductor ETF (NASDAQ:SMH)
VanEck Semiconductor ETF (NASDAQ:SMH) is managed by Van Eck Associates. It consists of 25 companies that provide it with an asset value of $6.2 billion. The fund tracks both American companies and foreign firms that have their shares traded on U.S. stock markets. It aims at tracking the performance of highly liquid firms and those that are the leading players in their market. The VanEck Semiconductor ETF (NASDAQ:SMH)’s 30 day SEC yield is 1%.
This ETF is also one of the few that has concentrated a big chunk of its holdings into the American depository receipts (ADRs) of the Taiwan Semiconductor Manufacturing Company (NYSE:TSM). This company is the world’s largest contract manufacturer of semiconductors and it is the sole supplier to Apple, Inc. (NASDAQ:AAPL) for the company’s processors. The Taiwan Semiconductor Manufacturing Company (NYSE:TSM) is also racing to mass produce the 3-nanometer semiconductor manufacturing technology, which is the world’s most advanced chip manufacturing process according to some observers.
As the first quarter of 2022 came to an end, 81 of the 912 hedge funds tracked by Insider Monkey had held a stake in the Taiwanese chipmaker. Out of these, Ken Fisher’s Fisher Asset Management was the largest investor since it owned 26 million shares that are worth $2.7 billion.
Disclosure: None. You can also take a look at 15 Best Momentum Stocks To Invest In and Jim Cramer Recommends These 10 Stocks for Recession.
