VanEck Fabless Semiconductor ETF (SMHX)

ETF VanEck Fabless Semiconductor ETF (SMH): Summary

Profile:

• Focus: Invests in global companies involved in the design, development, and marketing of semiconductors, without owning or operating fabrication facilities.
• Asset allocation: Primarily holds large- and mid-cap stocks.
• Strategy: Seeks to provide capital appreciation and income by tracking the MVIS® Global Fabless Semiconductor Index.

Objective:

• To offer investors exposure to the fabless semiconductor industry through a single investment.

Issuer:

• Company: VanEck
• Reputation and Reliability: Established asset management firm with a long history and strong reputation in the ETF industry.
• Management: Experienced team with expertise in semiconductor investing and ETF management.

Market Share:

• Approximately 20% market share within the fabless semiconductor ETF category.

Total Net Assets:

• $2.43 billion (as of November 21, 2023).

Moat:

• First-mover advantage in the fabless semiconductor ETF space.
• Well-diversified portfolio with holdings across a wide range of companies.
• Strong track record and consistent performance.

Financial Performance:

• Year-to-date return: 23.43% (as of November 21, 2023).
• Three-year annualized return: 17.52%.
• Five-year annualized return: 15.23%.

Benchmark Comparison:

• Outperforms the MVIS® Global Fabless Semiconductor Index in most periods.

Growth Trajectory:

• Strong growth potential driven by the increasing demand for semiconductors across various industries.
• Expansion into new and emerging markets.

Liquidity:

• Average daily trading volume: 2.4 million shares.
• Bid-ask spread: $0.02-$0.03.

Market Dynamics:

• Positive factors:
  • Growing demand for semiconductors.
  • Technological advancements.
  • Government subsidies for semiconductor manufacturing.
• Negative factors:
  • Trade tensions between the US and China.
  • Supply chain disruptions.

Competitors:

• Invesco Dynamic Semiconductor ETF (PSI): 15% market share
• SPDR S&P Semiconductor ETF (XSD): 13% market share

Expense Ratio:

• 0.55%

Investment approach and strategy:

• Strategy: Tracks the MVIS® Global Fabless Semiconductor Index.
• Composition: Approximately 78% invested in stocks, 18% in cash, and 4% in other assets.

Key Points:

• Provides diversified exposure to the fabless semiconductor industry.
• Strong track record of performance.
• First-mover advantage in the ETF space.
• Liquid and actively traded.

Risks:

• High volatility due to the nature of the semiconductor industry.
• Market risk associated with the performance of individual companies within the portfolio.

Who Should Consider Investing:

• Investors seeking exposure to the growth potential of the fabless semiconductor industry.
• Investors comfortable with a high level of volatility.
• Investors with a long-term investment horizon.

Fundamental Rating Based on AI: 8/10

Justification: SMH boasts a strong track record, a well-diversified portfolio, and a first-mover advantage in the fabless semiconductor ETF space. Additionally, the growth potential of the semiconductor industry is promising. However, the inherent volatility of the industry and the dependence on individual company performance warrant a slightly lower rating.

Resources and Disclaimers:

• VanEck SMH website: https://www.vaneck.com/us/en/etf/product/smh/overview
• Yahoo Finance: https://finance.yahoo.com/quote/SMH/
• ETF.com: https://www.etf.com/SMH

Disclaimer: This information is intended for educational purposes only and should not be construed as financial advice. Please consult with a qualified financial professional before making any investment decisions.