The SPDR S&P Semiconductor ETF (
XSD Quick Quote XSD - Free Report) was launched on 01/31/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Semiconductors segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Semiconductors is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 14, placing it in bottom 13%.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $995.24 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Semiconductors segment of the equity market. XSD seeks to match the performance of the S&P Semiconductor Select Industry Index before fees and expenses.
The S&P Semiconductor Select Industry Index represents the Semiconductor sub-industry portion of the S&P Total Markets Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Semiconductor Index is a modified equal weight index.
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.14%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 100% of the portfolio.
Looking at individual holdings, Synaptics Incorporated (
SYNA Quick Quote SYNA - Free Report) accounts for about 4.46% of total assets, followed by Sunpower Corporation ( SPWR Quick Quote SPWR - Free Report) and Ambarella Inc. ( AMBA Quick Quote AMBA - Free Report) .
The top 10 holdings account for about 34.39% of total assets under management.
Performance and Risk
So far this year, XSD return is roughly 13.88%, and it's up approximately 78.01% in the last one year (as of 06/30/2021). During this past 52-week period, the fund has traded between $110.01 and $200.80.
The ETF has a beta of 1.26 and standard deviation of 36.36% for the trailing three-year period, making it a high risk choice in the space. With about 40 holdings, it has more concentrated exposure than peers.
SPDR S&P Semiconductor ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XSD is a great option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
VanEck Vectors Semiconductor ETF (
SMH Quick Quote SMH - Free Report) tracks MVIS US Listed Semiconductor 25 Index and the iShares Semiconductor ETF ( SOXX Quick Quote SOXX - Free Report) tracks PHLX SOX Semiconductor Sector Index. VanEck Vectors Semiconductor ETF has $5.55 billion in assets, iShares Semiconductor ETF has $6.78 billion. SMH has an expense ratio of 0.35% and SOXX charges 0.46%. Bottom Line
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Zacks ETF Center.