Let’s analyze a rapidly growing market that has recorded an important year. Here are some of the ETFs that could benefit from this rise.
The semiconductor market has seen significant evolution in recent years, characterized by challenges and opportunities in a dynamic global context. In 2023, global semiconductor sales reached $520 billion, marking a slight decline compared to the previous year due to global economic challenges and reduced demand in consumer markets. However, in the last year, we have observed a strong recovery, with some ETFs gaining over 80%.
The industry’s growth potential remains high, impacting a wide range of technology sectors. Let’s take a market overview and analyze the best 1-year ETFs in terms of performance.
Semiconductors: driving sectors of the market
smartphones represent a crucial component of the semiconductor industry, with increasing demand thanks to emerging technologies such as 5G, artificial intelligence, and immersive applications. In 2023, smartphone semiconductors constituted approximately 20% of industry revenue. At the same time, the market for personal computing devices represented 17% of the overall market.
Another area of significant growth is represented by servers and data centers, especially with the adoption of GPUs for hardware acceleration and generative artificial intelligence, as in the case of ChatGPT applications. Industrial and automotive applications are also seeing increased demand for advanced semiconductors as manufacturing systems and vehicles become increasingly intelligent and connected.
The main players in the sector: from Intel to Nvidia
The semiconductor supply chain is complex and includes several key companies in design and manufacturing. Among the main players in the sector are integrated device manufacturers (IDMs) such as Intel, Samsung, SK Hynix, and Micron. In 2023, Intel maintained the largest share of the market, with more than $48 billion in revenue.
In addition to IDMs, the market includes companies such as Nvidia, Qualcomm, and Broadcom, which rely on foundries such as Taiwan Semiconductor Manufacturing Company (TSMC) to produce chips. TSMC, in particular, is the largest foundry in the world, playing a crucial role in the production of semiconductors.
Electronic design automation (EDA) companies like Cadence Design Systems and Synopsys provide essential chip design software, while specialists like ASML and Applied Materials offer semiconductor manufacturing equipment. Let’s now look at the best 1-year ETFs that could benefit from the growth of this market.
The best 1-year semiconductor ETFs: performance and investment opportunities
Over the past 12 months, ETFs that focus on the semiconductor sector have shown impressive performance, reflecting the growing importance of the technology sector.
1. Fineco AM MSCI World Semiconductors and Semiconductor Equipment UCITS ETF EUR Acc
This ETF tracks the MSCI World Semiconductors and Semiconductor Equipment index, which includes large- and mid-cap companies active in the semiconductor industry across 23 developed markets. With a total expense ratio (TER) of 0.38% per annum, the ETF has shown exceptional growth, rising 98% over the past year.
Launched on September 9, 2022, this ETF is based in Ireland and synthetically replicates the performance of the underlying index via a swap. Dividends are accumulated and reinvested in the ETF, further increasing growth potential.
2. Amundi MSCI Semiconductors ESG Screened UCITS ETF Acc
Another notable ETF is the Amundi MSCI Semiconductors ESG Screened UCITS ETF Acc, which tracks the MSCI ACWI Semiconductors & Semiconductor Equipment ESG Filtered index. This index includes large- and mid-cap companies in 23 developed markets and 24 emerging markets, filtered according to ESG (environmental, social, and corporate governance) criteria.
With a TER of 0.35% per annum, the ETF has seen growth of 85.47% over the past year. Launched on March 28, 2007, and based in Luxembourg, the ETF manages assets of 416 million Euros. The total physical replication of the underlying index and the reinvestment of dividends contribute to the solidity and growth of the ETF.
Outlook and Future Prospects
The semiconductor market is expected to grow further in the coming years, driven by technological innovation and growing demand in key sectors such as artificial intelligence, 5G, and industrial automation. ETFs focused on this theme represent an interesting opportunity for investors, offering exposure to a dynamic and ever-changing market.
Investors should carefully monitor industry developments and consider factors such as market volatility, government policies, and emerging technology trends. With a well-informed investment strategy, semiconductor ETFs can deliver significant returns and help diversify your portfolio in an increasingly digital age.
| Disclaimer The information and considerations contained in this article should not be used as the sole and principal basis on which to make investment decisions. The reader retains full freedom in his own investment choices and full responsibility in making them, since he alone knows his risk appetite and his time horizon. The information contained in the article is provided for informational purposes only and its disclosure does not constitute and should not be considered an offer or solicitation for public savings. |
Original article published on Money.it Italy 2024-06-28 18:31:09. Original title: Mercato dei semiconduttori alle stelle. Ecco come investire con gli ETF
