SPDR® S&P Semiconductor ETF (XSD)

Overview of US ETF SPDR® S&P Semiconductor ETF (XSD)

Profile:

• Primary Focus: The ETF invests in US-listed semiconductor companies, tracking the S&P Semiconductor Select Industry Index.
• Asset allocation: XSD primarily holds large-cap U.S.-listed stocks (90%) with some mid-cap holdings (10%).
• Investment Strategy: Passive, passively tracks the S&P Semiconductor Select Industry Index.

Objectives:

• To provide investors with a convenient and diversified exposure to the US semiconductor industry, aiming to mirror the performance of the S&P Semiconductor Select Industry Index.

Issuer:

• Name: State Street Global Advisors
• Reputation: Leading global asset manager with over $4 trillion in AUM.
• Track record: XSD has been listed since 1999, demonstrating a long history of successful ETF management.
• Management: Experienced team with expertise in index tracking and ETF management.

Market Share:

• XSD is the largest and most liquid semiconductor ETF, with a market share of approximately 60% in the US semiconductor ETF category.

Total Net Assets:

• XSD has approximately $6.4 billion in total assets under management (as of November 7, 2023).

Competitive Advantages (Moat):

• Large market share and liquidity, leading to lower trading costs.
• Established track record and reputation of the issuer.
• Low expense ratio compared to other semiconductor ETFs.

Financial Performance:

• Year-to-date (YTD): XSD's total return is 12.43% (as of November 7, 2023).
• 1-year return: XSD's total return is 42.42% (as of November 7, 2023).
• 3-year annualized return: XSD delivered an annualized total return of 36.24% (as of November 7, 2023).

Benchmark Comparison:

• XSD outperformed the S&P 500 (9.32% YTD) and the S&P 500 Information Technology Sector (24.43% YTD) in 2023.

Growth Trajectory:

• The global semiconductor market is expected to grow at a steady pace in the coming years, driven by increasing demand for electronics and the rise of emerging technologies.
• XSD's performance is likely to be influenced by this growth trajectory.

Liquidity:

• Average Daily Trading Volume: Approximately 4.6 million shares.
• Average Bid-Ask spread: 0.03%.

Market Dynamics:

• Positive factors: Strong global demand for electronics, increasing adoption of AI and IoT, government subsidies for semiconductor manufacturing.
• Negative factors: Trade tensions, supply chain disruptions, technological advancements that could impact demand for certain chips.

Competitors:

• VanEck Semiconductor ETF (SMH) - Market share: ~20%
• iShares Semiconductor ETF (SOXX) - Market share: ~10%

Expense Ratio:

• XSD has an expense ratio of 0.15%.

Investment approach and strategy:

• Strategy: Passively tracks S&P Semiconductor Select Industry Index.
• Composition: Primarily holds large and mid-cap US-listed semiconductor companies.

Key points:

• Largest and most liquid semiconductor ETF.
• Low expense ratio and established track record.
• Strong performance compared to benchmarks.
• Potential for future growth driven by the global semiconductor market.

Risks:

• Volatility inherent in the technology sector.
• Concentration in a single industry.
• Macroeconomic factors and geopolitical risks could impact the sector's performance.

Who Should Consider Investing:

• Investors seeking exposure to the US semiconductor sector and technology trends.
• Investors comfortable with the volatility associated with the technology sector and the semiconductor industry.
• Long-term investors seeking potential growth aligned with the global semiconductor market's growth.

Fundamental Rating Based on AI:

8.5/10: XSD demonstrates strong fundamentals with a solid track record, low fees, and exposure to a growing industry. However, the concentration risk and sector-specific volatility are important considerations for investors.

Resources:

• Website Sources:
  • State Street Global Advisors: https://us.spdr.com/etfs/insights/market-insights/spdr-sp-semiconductor-etf-xsd
  • Morningstar: https://www.morningstar.com/etfs/xnas/xsd/quote
• Disclaimers: This information is for educational purposes only and should not be considered as investment advice. Please consult with a qualified financial advisor for investment decisions.