Use ETFs to Invest in Semiconductor Manufacturers

Investor checking stocks and funds on multiple computer monitors.

Tetra Images / Brand X Pictures / Getty Images

You might not know how often semiconductors are used in today’s technology. From TV sets to military radars to laboratory equipment, semis are used all the time. There are some well-known firms that make semis, including Intel, Texas Instruments, and SanDisk, to name just a few.

Semiconductor ETF Basics

If you think you might want to expose your portfolio to semiconductor power, instead of buying a lot of random semi stocks, think about buying an exchange-traded fund (ETF) that targets the semiconductor sector.

With a semiconductor ETF, you can have instant access to this sector without having to research individual stocks to find the right ones to invest in. That work has already been done for you. And as compared to a semiconductor index like the SOXX, you can get this instant access for your portfolio without having to buy or sell an index basket. Again, that will save you on commissions.

Check out the funds below to help you decide which semi ETF will help you reach your investing goals:

  • PSI - Invesco Dynamic Semi ETF
  • SMH - VanEck Vectors Semi ETF
  • SOXL - Direxion Daily Semi Bull 3x Shares ETF
  • SOXS - Direxion Daily Semi Bear 3x Shares ETF
  • SOXX - iShares Semi ETF
  • SSG - ProShares UltraShort Semiconductors 
  • USD - ProShares Ultra Semiconductors
  • XSD - SPDR S&P Semi ETF

Make sure you realize that SOXL, SOXS, SSG, and USD are leveraged funds. This means that rather than just doing as well as the index, the fund's goal is to do better. You should also know that SOXS and SSG are inverse ETFs. Inverse funds do better when their matching indexes do worse.

Don’t forget to check back on this list from time to time to see whether any other semi ETF has come to market. And if any ETFs or ETNs get delisted, you'll want to know that as well.

Before making any trades, be sure to consult your broker or adviser. Research each ETF on its own, and make sure you know how each fund works. Some of these ETFs are leveraged and inverse funds, which are a little more complex and are for more expert traders. Keep an eye on how they react to the ups and downs in the market. As with any time you invest in any stock, you should conduct your own research and vet each firm on its own merits. 

Was this page helpful?
Related Articles