For investors seeking momentum, VanEck Vectors Semiconductor ETF SMH is probably on radar. The fund just hit a 52-week high and is up more than 72% from its 52-week low price of $96.00/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
SMH in Focus
This ETF offers exposure to the most-liquid companies in the semiconductor industry based on market capitalization and trading volume. American firms dominate the portfolio with 77% share while Taiwan and the Netherlands round off the next two countries. SMH charges 35 basis points in annual fees (see: all the Technology ETFs here).
Why the Move?
The semiconductor segment of the broad U.S. stock market has been an area to watch lately given the solid earnings results from Advanced Micro Devices AMD and a surge in Taiwan Semiconductor Manufacturing Company TSM shares. Advanced Micro topped the estimates for both revenues and earnings per share and raised its full-year revenue growth outlook driven by PC, gaming, and data center strength. Meanwhile, Taiwan Semiconductor got a boost after Intel said it was delaying the release of chips containing so-called 7-nanometer transistors.
More Gains Ahead?
Currently, SMH has a Zacks ETF Rank #2 (Buy) with a High risk outlook, suggesting that the outperformance could continue in the months ahead. Further, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely still some promise for those who want to ride on this surging ETF a little longer.
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