Semiconductor ETFs offer long-term promise

Article Excerpt

Many semiconductor (computer chip) stocks posted big gains after the pandemic hit in early 2020. That’s because sales of chips for personal electronics, such as computers, gaming hardware and so on, soared. With COVID easing, demand for advanced chips—chips for automotive applications, datacentres, 5G technology and the Internet of Things (IoT)—has remained strong. However, shares of chipmakers focused on more-basic semiconductors have fallen. That’s because sales of consumer electronics have slowed, forcing chip prices down. Still, despite short-term challenges, the long-term outlook for chip stocks (and the ETFs that hold them) is positive. See the supplement on page 40 for more on the semiconductor industry’s prospects. SPDR S&P SEMICONDUCTOR ETF $202.88 (New York symbol XSD; TSINetwork ETF Rating: Aggressive; Market cap: $1.3 billion) tracks the S&P Semiconductor Select Index. The index is comprised of U.S.-listed semiconductor companies, including large, mid and small companies. Stocks are weighted equally, and the portfolio is rebalanced quarterly. The ETF holds 39 companies with 32% of the assets allocated to the…