Chip Stocks See Big Two-Day Rally After 2015: ETFs In Focus

After witnessing their worst year since 2011 dragged down by U.S.-China trade war and waning demand for memory chips, semiconductor stocks showed solid signs of a rebound over the last two trading days. This is especially true as the PHLX Semiconductor Index jumped nearly 6.4%, marking its biggest two-day rally since 2015. In particular, Advanced Micro Devices (AMD - Free Report) and Nvidia (NVDA - Free Report) led the way higher.

Solid jobs data as well as Powell’s comments, which erased fears of a tighter monetary policy in the near term, have spread overall optimism in the broad market. Additionally, the resumption of the latest round of negotiations between officials from Washington and Beijing on the trade policy added to the strength.

Further, the international Consumer Electronics Show, or CES -- one of the biggest events in the world of technology -- in Las Vegas will continue to propel stocks higher as a large number of companies will come up with their future plans having hot themes such as artificial intelligence, autonomous driving, smart homes, virtual and augmented reality, smartphone unit expectations and the transition to 5G networks.

ETF Impact

Superb trading in the stock world also pushed semiconductor ETFs higher in the last couple of days. In particular, iShares PHLX Semiconductor ETF (SOXX - Free Report) , VanEck Vectors Semiconductor ETF(SMH - Free Report) Invesco Dynamic Semiconductors ETF (PSI - Free Report) and SPDR S&P Semiconductor ETF (XSD - Free Report) climbed more than 4% each in two days.

Below we profile these ETFs in detail and discuss some of the specifics behind their recent jump:

SOXX

This ETF follows the PHLX SOX Semiconductor Sector Index and offers exposure to 30 firms with each accounting for less than 8.6% share. It has amassed $1.1 billion in its asset base and charges 47 bps in fees a year.

SMH

This fund provides exposure to 25 securities by tracking the MVIS US Listed Semiconductor 25 Index. It is heavily concentrated on the top two firms with double-digit exposure each while other firms hold less than 5.7% of assets. The product has managed assets worth $784.2 million and charges 25 bps in annual fees and expenses.

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