Use ETFs to Invest in Semiconductor Manufacturers

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You probably don’t realize how often semiconductors are used in today’s technology. From television sets to military radars to scientific laboratory equipment, semis are used all the time. There are some very popular companies that manufacture semiconductors—Intel, Texas Instruments, and San Disk, to name just a few.

Semiconductor ETF Basics

If you think you might want to expose your portfolio to a little semiconductor power, then instead of buying 30 some odd semiconductor manufacture stocks, consider a prepackaged ETF targeting the semiconductor industry. 

With a semiconductor ETF, you can have instant exposure to this sector without having to research individual stocks to find the right combination for your portfolio. That work is already done for you. And as opposed to a semiconductor index like the SOX, you can get this instant exposure for your portfolio without having to buy or sell an index basket. Again, this will save you on commissions.

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

  • PSI - Power Shares Dynamic Semiconductors ETF
  • SMH - Market Vectors Semis ETF
  • SOXL - Direxion Daily Semiconductor Bull 3x Shares ETF
  • SOXS - Direxion Daily Semiconductor Bear 3x Shares ETF
  • SOXX - iShares PHLX SOX Semiconductor ETF
  • SSG - Ultra Short Semiconductor Pro Shares ETF
  • USD - Ultra Semiconductor Pro Shares ETF
  • XSD - SPDR S&P Semiconductor ETF

Make sure you realize that SOXL, SOXS, SSG, and USD are leveraged funds and SOXS and SSG are also inverse ETFs, too. It's important to know the difference between normal funds and notes.

Don’t forget to check back on this list from time to time to see if any other semiconductor has come to market. And if any ETFs or ETNs get delisted, this article will be updated as well.

Also, before making any trades, be sure to consult your broker, your advisor or a financial professional. Research each ETF individually, know how each fund works. Especially since some of these ETFs are leveraged and inverse funds, which are a little more complex and are more for the advanced trader. So, keep an eye on how they react to different market conditions. As with any investment, conduct your due diligence.