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Is SPDR S&P Semiconductor ETF (XSD) a Strong ETF Right Now?
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Designed to provide broad exposure to the Technology ETFs category of the market, the SPDR S&P Semiconductor ETF (XSD - Free Report) is a smart beta exchange traded fund launched on 01/31/2006.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors. XSD has been able to amass assets over $1.41 billion, making it one of the larger ETFs in the Technology ETFs. 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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.35% for XSD, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.19%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
XSD's heaviest allocation is in the Information Technology sector, which is about 100% of the portfolio.
Taking into account individual holdings, Credo Technology Group Holdi (CRDO - Free Report) accounts for about 6.41% of the fund's total assets, followed by Semtech Corp (SMTC - Free Report) and Marvell Technology Inc (MRVL - Free Report) .
Its top 10 holdings account for approximately 39.39% of XSD's total assets under management.
Performance and Risk
The ETF has gained about 3.02% so far this year and was up about 19.28% in the last one year (as of 01/09/2025). In the past 52-week period, it has traded between $201.42 and $273.98.
The fund has a beta of 1.37 and standard deviation of 36.96% for the trailing three-year period, which makes XSD a high risk choice in this particular space. With about 41 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR S&P Semiconductor ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Semiconductor ETF (SOXX - Free Report) tracks PHLX SOX Semiconductor Sector Index and the VanEck Semiconductor ETF (SMH - Free Report) tracks MVIS US Listed Semiconductor 25 Index. IShares Semiconductor ETF has $14.26 billion in assets, VanEck Semiconductor ETF has $24.14 billion. SOXX has an expense ratio of 0.35% and SMH charges 0.35%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is SPDR S&P Semiconductor ETF (XSD) a Strong ETF Right Now?
Designed to provide broad exposure to the Technology ETFs category of the market, the SPDR S&P Semiconductor ETF (XSD - Free Report) is a smart beta exchange traded fund launched on 01/31/2006.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors. XSD has been able to amass assets over $1.41 billion, making it one of the larger ETFs in the Technology ETFs. 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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.35% for XSD, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.19%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
XSD's heaviest allocation is in the Information Technology sector, which is about 100% of the portfolio.
Taking into account individual holdings, Credo Technology Group Holdi (CRDO - Free Report) accounts for about 6.41% of the fund's total assets, followed by Semtech Corp (SMTC - Free Report) and Marvell Technology Inc (MRVL - Free Report) .
Its top 10 holdings account for approximately 39.39% of XSD's total assets under management.
Performance and Risk
The ETF has gained about 3.02% so far this year and was up about 19.28% in the last one year (as of 01/09/2025). In the past 52-week period, it has traded between $201.42 and $273.98.
The fund has a beta of 1.37 and standard deviation of 36.96% for the trailing three-year period, which makes XSD a high risk choice in this particular space. With about 41 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR S&P Semiconductor ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Semiconductor ETF (SOXX - Free Report) tracks PHLX SOX Semiconductor Sector Index and the VanEck Semiconductor ETF (SMH - Free Report) tracks MVIS US Listed Semiconductor 25 Index. IShares Semiconductor ETF has $14.26 billion in assets, VanEck Semiconductor ETF has $24.14 billion. SOXX has an expense ratio of 0.35% and SMH charges 0.35%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.