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Semiconductor ETF (PSI) Hits New 52-Week High

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For investors seeking momentum, Invesco Dynamic Semiconductors ETF (PSI - Free Report) is probably on radar. The fund just hit a 52-week high and is up 87.6% from its 52-week low price of $72.01/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

PSI in Focus

This ETF offers exposure to the companies that are principally engaged in the manufacture of semiconductors. The companies are evaluated based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action and value. The fund is well diversified across components with none making up for more than 5.2% of the portfolio. It charges 57 basis points in annual fees (see: all the Technology ETFs here).

Why the Move?

The semiconductor segment of the broad U.S. stock market has been an area to watch lately, given the surge in all types of chips demand amid a global shortage. Notably, the stay-at-home trend due to the coronavirus pandemic has bolstered demand for gaming chips and data center business. Semiconductors have been the most important drivers of overall growth in technology, given the use of chips in day-to-day life from cars, electronic gadgets to planes and weapons. Chip makers power much of the world’s technology with their new innovations and have set the stage for digitization in various corners like healthcare, transport, financial systems, defense, agriculture, and retail among others.

More Gains Ahead?

Currently, PSI has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook, suggesting that the outperformance could continue in the months ahead. Further, many of the segments that make up this ETF have a strong Zacks Industry Rank. So, there is definitely still some promise for those who want to ride on this surging ETF a little longer.


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