Chips · ETF report · VanEck Semiconductor ETF (NASDAQ: SMH)
Chip ETFs — 68 of 85 chip stocks rose in September; SMH caught less of it than SOXX
The Closelooknet read
September's chip rally was broad, not a handful of giants. Of the 85 chip stocks we track across the US, Europe, Japan, Korea and Taiwan, 68 rose over the month and 66 trade above their 200-day average. The leaders were test and equipment makers — FormFactor (NASDAQ: FORM) +48.4%, Cohu +47.8%, Soitec +41.1%, AT&S +35.8% — plus Intel +34.3%; the laggards lost little: Resonac −8.6%, Ajinomoto −6.1%, Toppan −5.5%, Broadcom −5.2%, DISCO −3.9%. The VanEck Semiconductor ETF (NASDAQ: SMH) caught less of that than its rival: +9.4% against +11.3% for the iShares Semiconductor ETF (NASDAQ: SOXX).
Why SMH lagged
Breadth helps the fund that spreads its money wider. SMH holds 25 stocks, SOXX 30; when the gains come from the middle of the sector rather than its largest names, the more concentrated fund falls behind. The same split shows over the year — SOXX +88.8%, SMH +69.1% — and on the way down: SOXX is 13.2% below its 22 June high, SMH 9.0%.
What we watch
If fewer than three in four of the 85 chip stocks stay above their 200-day average, the breadth behind September's gain is fading. If SMH closes above 668.91, its June high, the chip rally has made back the whole summer decline.
The fund facts
SMH closed September at 609.00, up 69.1% this year, 9.0% below its 22 June closing high and 22.6% above its 200-day average. It charges 0.35% a year, manages about $71 billion and has traded since December 2011. SOXX charges the same 0.35% and manages about $45 billion.
Closelooknet is a research diary. Nothing here is investment advice or a recommendation to buy or sell.