Launched on 01/31/2006, the SPDR S&P Semiconductor ETF (XSD – Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology – Semiconductors segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology – Semiconductors is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $1.39 billion, making it one of the larger ETFs attempting to match the performance of the Technology – Semiconductors segment of the equity market. XSD seeks to match the performance of the S&P Semiconductor Select Industry Index before fees and expenses.
The S&P Semiconductor Select Industry Index represents the Semiconductor sub-industry portion of the S&P Total Markets Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Semiconductor Index is a modified equal weight index.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF’s expense ratio.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.20%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector–about 100% of the portfolio.
Looking at individual holdings, Credo Technology Group Holdi (CRDO – Free Report) accounts for about 6.41% of total assets, followed by Semtech Corp (SMTC – Free Report) and Marvell Technology Inc (MRVL – Free Report) .
The top 10 holdings account for about 39.39% of total assets under management.
Performance and Risk
The ETF return is roughly 0% and is up about 10.74% so far this year and in the past one year (as of 01/01/2025), respectively. XSD has traded between $201.42 and $273.98 during this last 52-week period.
The ETF has a beta of 1.39 and standard deviation of 37.11% for the trailing three-year period, making it a high risk choice in the space. With about 41 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR S&P Semiconductor ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XSD is an excellent option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
IShares Semiconductor ETF (SOXX – Free Report) tracks PHLX SOX Semiconductor Sector Index and the VanEck Semiconductor ETF (SMH – Free Report) tracks MVIS US Listed Semiconductor 25 Index. IShares Semiconductor ETF has $13.84 billion in assets, VanEck Semiconductor ETF has $23.38 billion. SOXX has an expense ratio of 0.35% and SMH charges 0.35%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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