Down 21% in six weeks, what's happened to SEMI ETF?

SEMI invests in high-tech businesses, including semiconductor developers and manufacturers.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Global X Semiconductor ETF (ASX: SEMI) shares are down 0.03% to $37.18 per unit on Friday.

SEMI was one of the best performing exchange-traded funds (ETFs) on the market in FY26.

The ETF produced an astounding one-year total return of 161%.

The 12-month trailing distribution yield was an impressive 6.2%.

This ASX ETF's performance is directly linked to the massive artificial intelligence (AI) investment thematic.

The AI revolution is only in its infancy, and the biggest thing happening right now is the building of its infrastructure.

Semiconductor companies are a direct way of investing in the AI infrastructure build-out.

Semiconductors are materials used to control electrical currents in computer chips.

They are essential components of the AI hardware designed by companies such as Nvidia.

Strong company earnings and high buying demand from investors pushed SEMI ETF higher over the course of FY26.

In an article, Global X said:

This year, share markets in the United States, Japan, South Korea and Taiwan have delivered strong gains as investors pour money into companies building the technology that powers AI.

Computer chip manufacturers, data centre operators and technology firms have become some of the world's most valuable businesses as demand for AI continues to surge.

SEMI ETF reached a record unit price of $47.78 on 23 June.

Then the world came crashing down.

A man with his back to the camera holds his hands to his head as he looks to a jagged red line trending sharply downward.

Image source: Getty Images

What happened to SEMI ETF?

A global sell-down of semiconductor companies began in South Korea on 23 June, and spread to the US the next day.

At first, SEMI ETF demonstrated resilience.

The ETF even rose another 3.6% over the next week before reaching a crunch point on 2 July, and crashing 12% in one day.

SEMI ETF has lost 21% of its value since 2 July.

That's a softer landing than South Korean chip makers SK Hynix and Samsung Electronics experienced in the sell-off.

SK Hynix shares are down 43% since 23 June. Their peak to trough drop was 48%, but they've recovered a little.

Samsung Electronics shares were down 33% at the end of July. They're now down 13% following a more rapid recovery than SK Hynix.

SK Hynix and Samsung Electronics represent about half the market cap of the Korea Composite Stock Price Index (KOSPI).

That's partly why their sell-off caused the entire KOSPI to crash.

You read the full story of the KOSPI crash here.

What now?

The share prices of semiconductor companies have rebounded following the global sell-off last month.

Angel Zhong is a finance professor at RMIT University who specialises in global financial markets, behaviour, and trends.

Zhong said the sell-off reflected an exciting technology narrative that had created market enthusiasm, then fear, in quick succession.

Zhong said:

AI will continue to transform industries, but markets often move through cycles of exuberance and reassessment. 

Investors should be careful not to mistake a correction in market sentiment for a failure of underlying technology.

In other words, the AI build-out continues, and semiconductor stocks and ETFs are back on the rise.

More about SEMI ETF

SEMI invests in tech device manufacturers and AI-related companies including semiconductor developers and manufacturers.

SEMI ETF's top four holdings are Nvidia (11.3%), which designs graphics processors and AI chips, Broadcom (11%), a semiconductor designer, Taiwan Semiconductor Manufacturing Company (10.1%), the world's leading contract manufacturer of semiconductor chips, and Micron Technology (9.9%), which designs and manufactures memory and storage chips.

SK Hynix features in SEMI ETF's portfolio as the seventh largest holding at 6%.

Samsung Electronics is also in the mix but commands only 0.5% of SEMI's total net assets.

SEMI ETF has a management fee of 0.45%.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Broadcom, Micron Technology, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Exchange-Traded Funds (ETFs)

AI microprocessor on motherboard computer circuit.
Exchange-Traded Funds (ETFs)

3 ASX ETFs for easy artificial intelligence (AI) exposure

Want to invest in AI shares? Here are three ways you could do it.

Read more »

Concept image of man holding up a falling arrow with a shield.
Exchange-Traded Funds (ETFs)

This ASX ETF could help protect your portfolio

Many investors are looking for protection right now.

Read more »

Two people work with a digital map of the world, planning their logistics on a global scale.
Exchange-Traded Funds (ETFs)

3 reasons to buy the Vanguard MSCI Index International Shares (VGS) ETF

This is the type of diversified investment I would be comfortable adding to regularly and holding for many years.

Read more »

ETF written in light blue on a chart.
Exchange-Traded Funds (ETFs)

Vanguard ETFs vs. Betashares ETFs: Who's coming out on top?

Combining complementary ETFs may beat chasing a single winner.

Read more »

A glass outdoors with a sign with ETFs written on it, as well as coins and a growing plant.
Exchange-Traded Funds (ETFs)

3 top Vanguard ETFs I'd buy with $3,000

I think all three could work well for long-term investors, depending on the type of exposure their portfolio needs most.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Exchange-Traded Funds (ETFs)

Forget Nvidia. This little-known ETF is up more than 3,600% in 2026

Few investors saw this incredible opportunity coming.

Read more »

ETF written in white on a multi coloured background.
Exchange-Traded Funds (ETFs)

5 ASX ETFs to buy and hold forever

Let's see why these funds could be worth considering for the long term.

Read more »

Woman looking at her computer and pondering something.
Exchange-Traded Funds (ETFs)

Should I buy the iShares Global 100 ETF (IOO) now?

I think the quality of the companies inside this global fund gives it a strong foundation for the long term.

Read more »