7 Best Semiconductor ETFs to Buy in 2023: The technology sector in the United States of America has surpassed expectations and surged significantly this year, with the technology
As the excitement around artificial intelligence, or AI, has grown, multiple mega-cap tech firms, including Alphabet Inc. (NASDAQ: GOOG, GOOGL), Microsoft Corp.
However, these stocks have been outperformed by chipmaker Nvidia Corp. (NVDA). Nvidia, one of the world’s leading semiconductor makers, had its stock price skyrocket by roughly 24% on May 25 following a massive earnings announcement.
7 Best Semiconductor ETFs to Buy in 2023
iShares Semiconductor ETF (SOXX)
“The potential benefits of investing in semiconductor ETFs include coverage to a high-growth sector with strong basic information, diversified across a variety of businesses in the industry
SOXX is one of the most popular semiconductor ETFs on the market, with around $8.8 billion in assets under management, or AUM. Because of its popularity, the ETF has high liquidity, with over 1.4 million shares traded on average over a 30-day period.
VanEck Semiconductor ETF (SMH)
“Especially when looking for semiconductor ETFs (7 Best Semiconductor ETFs to Buy in 2023), investors should consider aspects such as the ratio of expenses to revenues, the underlying index or the standard, the fund’s holdings and diversification strategy.
SMH, which has more than $9 billion in AUM and an equal 0.35% cost ratio as SOXX, is an ETF that fits these requirements. This ETF tracks the MVIS US Listed Semiconductor 25 Index and presently
SPDR S&P Semiconductor ETF (XSD)
Most semiconductor ETFs use a market cap-weighted approach, which gives equities with bigger market capitalizations correspondingly higher weights. When a handful of mega-cap semiconductor firms (7 Best Semiconductor ETFs to Buy in 2023)dominate the ETF’s top holdings,
XSD delivers more uniform exposure across 38 large-, mid-, and small-cap U.S. semiconductor firms by following the S&P Semiconductor (7 Best Semiconductor ETFs to Buy in 2023) Select Industry Index. Despite its huge market capitalization
First Trust Nasdaq Semiconductor ETF (FTXL)
Most semiconductor ETFs go the extra mile to evaluate possible holdings based on other factors. This is often done to guarantee that the final portfolio fits specified financial health, growth potential, or other requirements. FTXL, which monitors the Nasdaq U.S. Smart Semiconductor (7 Best Semiconductor ETFs to Buy in 2023) Index, is an excellent example.
The FTXL index picks semiconductor firms from the Nasdaq U.S. Benchmark Index and ranks them based on three criteria: trailing 12-month return on assets, trailing 12-month gross income, and momentum in the form of three-, six-, nine-, and twelve-month share price appreciation.
Invesco Dynamic Semiconductors ETF (PSI)
PSI is another five-star Morningstar-rated semiconductor ETF to keep an eye on. This ETF follows the Dynamic Semiconductors (7 Best Semiconductor ETFs to Buy in 2023) Intellidex Index, which, like the index used by FTXL, selects companies using additional screeners.
PSI currently owns 31 equities, with Nvidia leading the pack with a 6% stake. Broadcom Inc. (AVGO) and Applied Materials Inc. (AMAT) are in second and third position, with 5.5% and 5.2%,
Invesco PHLX Semiconductor ETF (SOXQ)
ETFs with extra filters in their indexes, such as FTXL and PSI, typically incur a higher cost ratio. There is a danger that these higher costs will cut into total results in the long run. SOXQ, which has the lowest expense ratio on our list at 0.19%, is a wonderful alternative
SOXQ provides exposure to the 30 biggest U.S. listed semiconductor (7 Best Semiconductor ETFs to Buy in 2023) equities by following the PHLX Semiconductor Sector Index. Nvidia, Broadcom, Intel Corp. (INTC), Texas Instruments Inc. (TXN), and AMD are now among its top holdings.
Direxion Daily Semiconductor Bull 3X Shares ETF (SOXL)
Most of the prior ETFs allow investors to trade options, which can provide investors with increased exposure. Furthermore, investors can buy these ETFs on margin to boost their gains. Investors who do not want to trade options on semiconductor ETFs or leverage their positions with margin can still benefit from SOXL, which has a 0.94% fee ratio.
This leveraged ETF seeks to outperform the ICE Semiconductor (7 Best Semiconductor ETFs to Buy in 2023) Index on a daily basis. SOXL will return 3% if the index rises by 1%. SOXL will decline 3% if the index falls by 1%. Because the leveraged exposure is determined.
1: What are semiconductor ETFs and why should I consider investing in them in 2023?
Semiconductor ETFs, or exchange-traded funds, are investment funds that are designed to track the performance of a specific basket of semiconductor-related companies.
2: Which are the 7 best semiconductor ETFs to consider buying in 2023?
These ETFs have different investment strategies and holdings, so it’s essential to research each one’s specific objectives, expense ratios, and performance history to determine which aligns best with your investment goals.