Yahoo Finance Tap Taiwan Semiconductor Growth With These ETFs
Taiwan-based chipmaker Taiwan Semiconductor Manufacturing TSM posted its fastest quarterly revenue growth in more than a year, spurring expectations that a global boom in artificial intelligence (AI) development is fueling demand for high-end chips and servers. In particular, its revenues climbed 34.3% year over year in March, marking the fastest pace of growth since November 2022.
For the first quarter of 2024, revenues spiked 16.5% year over year to $18.5 billion and edged past the consensus mark of $18.38 billion. The full quarterly results will be announced on Apr 18.
Investors could tap the robust growth with the help of ETFs having the largest allocation to the world’s largest contract semiconductor manufacturer. These include SP Funds S&P World ex-US ETF SPWO, SP Funds S&P Global Technology ETF SPTE, VanEck Vectors Semiconductor ETF SMH and Xtrackers Semiconductor Select Equity ETF CHPS.
Taiwan Semiconductor, which makes chips for companies from Apple AAPL to Nvidia NVDA, is expected to return to solid growth this year, buoyed by the AI boom. TSM is up 37% so far this year and has outperformed the broader market’s 16% gain (read: Time to Tap Healthcare ETFs on Nvidia's AI Ambition?).
The chipmaker has an Earnings ESP of +1.29% and a Zacks Rank #3 (Hold). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Taiwan Semiconductor currently has an average brokerage recommendation (ABR) of 1.33 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell etc.) made by nine brokerage firms. The current ABR compares to an ABR of 1.33 a month ago based on nine recommendations.
Of the nine recommendations deriving the current ABR, seven are Strong Buy and one is Buy. Strong Buy and Buy, respectively, account for 77.78% and 11.11% of all recommendations. A month ago, Strong Buy made up 77.78%, while Buy represented 11.11%.
ETFs to Tap
Let’s delve into each ETF below:
SP Funds S&P World ex-US ETF (SPWO)
SP Funds S&P World ex-US ETF tracks the S&P DM Ex-U.S. & EM 50/50 Shariah Index, which is designed to measure the performance of sharia-compliant components of emerging market and developed market stocks excluding U.S. stocks. It holds a basket of 307 stocks, with Taiwan Semiconductor taking the top spot at 13.8%.
SP Funds S&P World ex-US ETF has accumulated $11.6 million in its asset base since its inception in late December. It charges 55 bps in annual fees and trades in a lower average trading volume of 3,000 shares.
SP Funds S&P Global Technology ETF (SPTE)
SP Funds S&P Global Technology ETF seeks to provide exposure to global technology companies through large and mid-cap stocks. The fund invests in the index with companies that leverage leading new technologies to benefit as the global economy moves toward a post-interest cycle recovery. It follows the S&P Global 1200 Shariah Information Technology (Sector) Capped index and holds 98 stocks in its basket. Taiwan Semiconductor occupies the top position with 13.6% share.
SP Funds S&P Global Technology ETF has accumulated $29.2 million in its asset base and charges 55 bps in fees per year. It trades in a volume of 9,000 shares a day on average.
VanEck Vectors Semiconductor ETF (SMH)
VanEck Vectors Semiconductor ETF offers exposure to companies involved in semiconductor production and equipment. It follows the MVIS US Listed Semiconductor 25 Index, which tracks the most liquid companies in the industry based on market capitalization and trading volume. VanEck Vectors Semiconductor ETF holds 26 stocks in its basket, with Taiwan Semiconductor occupying the second position at 12.7%.
VanEck Vectors Semiconductor ETF has managed assets worth $18.6 billion and charges 35 bps in annual fees and expenses. SMH trades in an average daily volume of 9 million shares and has a Zacks ETF Rank #1 (Strong Buy) with a High-risk outlook (read: Top-Ranked ETFs That Outperformed the Market in Q1).
Xtrackers Semiconductor Select Equity ETF (CHPS)
Xtrackers Semiconductor Select Equity ETF seeks to track the Solactive Semiconductor ESG Screened Index. It holds 52 stocks, with TSM being the fifth firm with a 5.01% share. Xtrackers Semiconductor Select Equity ETF charges 15 bps in annual fees and has AUM of $7.4 million. It trades in an average daily volume of 9 million shares.
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Apple Inc. (AAPL) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report
VanEck Semiconductor ETF (SMH): ETF Research Reports
Xtrackers Semiconductor Select Equity Etf (CHPS): ETF Research Reports
SP Funds S&P Global Technology ETF (SPTE): ETF Research Reports
SP Funds S&P World (ex-US) ETF (SPWO): ETF Research Reports
