Exchange-traded fund (ETF) manager ETF Securities has added a new offering to its suite of products, giving investors access to the semiconductor industry.
The Semiconductor ETF (ASX code: SEMI) has been programmed to monitor the portfolio of 30 semiconductor companies responsible for microchip foundries and lithography, transistor manufacture and graphic processing unit assembly.
ETF Securities head of distribution Kanish Chugh said the new ETF has been brought to market to track investment themes that have emerged from megatrends.
“By following megatrends, investors can access high-growth opportunities which are not yet fully captured by conventional sectors or unexpressed by factors. Additionally, they can manage risk by hedging against the disruption that global economic ructions can cause. Correctly identifying and acting on megatrends can offer enormous upside,” Chugh said.
“With the rise of thematic ETFs, megatrend investing has become more readily accessible. Semiconductors are a key component that are increasingly underpinning the development of many other megatrend technologies.
“Given this backdrop, we are very excited to launch a series of new ETFs this year that tap into new megatrends. SEMI will be the first of these new ETFs – an Australian first.”
As a result of the coronavirus pandemic, demand for electronic devices has increased, with annual sales in the semiconductor sector expected to grow 20 per cent in 2021, the manager said.
ETF Securities head of production Evan Metcalf described semiconductors as the “brains of modern society” and noted COVID-19 is not the only driver of their potential success.
“This includes cryptocurrency, artificial intelligence (AI) and also video games and cloud computing, given their use in consoles and servers. All of these areas – AI, cloud computing, e-sports – are experiencing strong growth and taking semiconductors with them. But perhaps the most exciting is electric and self-driving cars,” Metcalf noted.''