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2 Semiconductor ETFs to Know About
Gain investment exposure to the material that powers your devices
Semiconductors help to power the devices we use and the technological processes we take for granted daily. A semiconductor is a material, such as silicon or germanium, that is neither a good conductor of electricity nor a good insulator of electricity. Its function is to be doped to create an excess or lack of electrons to assist with electronic functions such as computer processing. A computer chip such as the central processing unit (CPU) is made of semiconductor materials. Semiconductors are what allow for the miniaturization of CPU components, such as transistors.
In gaining a better understanding of semiconductors, you will better understand the importance of the semiconductors industry. According to Fortune Business Insights, the global semiconductors market size is expected to grow from $452.25 billion in 2021 to $803.15 billion in 2028 at a compound annual growth rate (CAGR) of 8.6%. If you are looking to gain exposure to publicly traded companies in the semiconductors industry, the following two ETFs will help to simplify that for you:
1. VanEck Vectors Semiconductor ETF (SMH)
2. iShares PHLX Semiconductor ETF (SOXX)
1. VanEck Vectors Semiconductor ETF (SMH)
SMH is an ETF that seeks to replicate the investment performance of the MVIS US Listed Semiconductor 25 Index. The MVIS US Listed Semiconductor 25 Index is an index that tracks the performance of the largest and most liquid United States listed companies that derive at least 50% of their revenues from semiconductors. Taiwan Semiconductor Manufacturing, NVIDIA, ASML Holdings, and Intel are some of the key holdings in SMH. As of July 1st, 2021, SMH has a price of $258.37 and an expense ratio of 0.35%. Over the past five years, SMH has provided a total return of approximately 393% and an average annual total return of approximately 38%, with dividends reinvested.
2. iShares PHLX Semiconductor ETF (SOXX)
SOXX is an ETF that seeks to track the investment results of the ICE Semiconductor Index. The ICE Semiconductor Index is an index that tracks the performance of United States listed securities of companies classified…
