The ETFS Semiconductor ETF (ASX: SEMI) has performed exceptionally since it was listed a little over two months ago. Since listing, the semiconductor-focused exchange-traded fund (ETF) has delivered a return of 5.3%. In contrast, the S&P/ASX 200 Index (ASX: XJO) fell 0.8% during that time span.
Even more impressive, the ETF has rebounded off a slight dip to climb over 14% in the last month. Such a high monthly return from an investment vehicle that contains 29 holdings is quite an achievement.
So, let's find out more about this new ETF that is taking the market by storm.
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What is the ETFS Semiconductor ETF?
Put simply, the SEMI ETF is an ASX-listed ETF offered by etf Securities that gives investors exposure to 29 companies involved in the production of microchips. This opens up the opportunity to capitalise on advancements in modern computing, artificial intelligence, cloud computing, and electric vehicles.
While the fund is dealing in a high-growth industry, there are no highly speculative microcaps within the ETF. In fact, a criterion for inclusion is a market capitalisation of more than US$1 billion and a minimum average daily trading value of US$1 million over 3 months.
Although the ETF contains 29 holdings, it is heavily weighted towards its largest 10, making up approximately 70% of SEMI ETF's portfolio. You might recognise some of the names in the fund's top holdings listed below in order of weighting (largest to smallest):
- ASML Holding NV (AMS: ASML)
- Nvidia Corporation (NASDAQ: NVDA)
- Taiwan Semiconductor Manufacturing Co Ltd (TPE: 2330)
- Intel Corporation (NASDAQ: INTC)
- Broadcom Inc (NASDAQ: AVGO)
- Texas Instruments Inc (NASDAQ: TXN)
- Qualcomm Inc (NASDAQ: QCOM)
- Advanced Micro Devices Inc (NASDAQ: AMD)
- Applied Materials Inc (NASDAQ: AMAT)
- Analog Devices Inc (NASDAQ: ADI)
As you might be able to tell from the holdings above, the ETF is heavily weighted towards companies based in North America. Meanwhile, nearly 20% are companies situated in Asia, with the remainder 12.8% being European companies.
What are the costs of the SEMI ETF?
As with all ETFs, there are costs associated with the management of the fund. The SEMI ETF is no different and currently carries a management fee of 0.57%. In other words, $10,000 invested in this ETF would incur a $57 management fee over a one-year period.
For comparison, the Vanguard MSCI Index International Shares ETF (ASX: VGS) has a management fee of 0.18% per annum. However, this ETF is far broader and larger which allows for it to charge a lower fee. For instance, this particular Vanguard fund has $25.4 billion worth of assets under management (AUM). The SEMI ETF, on the other hand, has only $54.3 million worth of AUM.
