SPDR® S&P Semiconductor ETF (XSD) - Excellent small cap semiconductor index fund


Recently I came across another *semiconductor* focused low cost index ETF which seems quite promising index. It's called SPDR S&P Semiconductor ETF ( *XSD*).

Unlike iShares Semiconductor ETF SOXX (https://financial-well-being.blogspot.com/2022/01/iShares-Semiconductor-ETF-SOXX-Passive-Semiconductor-technology-index.html), which focuses primarily in *large* cap, XSD focuses into *small and mid* cap semiconductor companies of S&P Total index. It's *equal weighted* index and that's why it's average capitalization is in mid and small cap.Overall it's comparable or *even better* than SOXX. For example...
- It's PE is comparable to that of SOXX
- Dividend yield plus earnings growth of 16% as compared to lower 13% for SOXX
- It's 3/5 year returns of 23/22% is 20% better than that of SOXX's 19/18%.

It tracks *semiconductor small cap* sector which has been one of the top performer in technology sector with close to *20% annual return* for last 5, 10 and 15 years horizon. However, such lofty returns come with high *volatility* in *short term*.

03/01/2024:

XSD reached it's previous record high of $232.69 after more than 2 years of patiently waiting. My sell limit order for incremental fixed dollar (12K) finally got executed today.

Since XSD is primarily small cap focused semiconductor ETF, it has been lagging large cap semiconductor ETF such as SOXX. However, XSD has history of always catching up after a slow year. Today's record high is perhaps just a beginning. Real gains are likely to come soon this year or next.

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