USD - USD: A Watered-Down Version Of NVDL

2024-07-10 15:13:45 ET

Summary

• Semiconductor industry momentum driven by Nvidia Corporation stock, with market-cap weighted ETFs heavily influenced by the stock's performance.
• ProShares Ultra Semiconductors ETF offers leveraged exposure to the semiconductor industry, but heavily weighted towards Nvidia.
• Consider using GraniteShares 2x Long NVDA Daily ETF for a more pure play on Nvidia, with potentially higher returns but also higher risk.

It seems like every day, at regular 10 minute intervals, traditional financial media will bring out some analyst or portfolio manager who is bullish on the semiconductor “industry.” I put industry in quotes here because, as I’ve noted before, the momentum in semiconductor ETFs which are market-cap weighted is being driven entirely by Nvidia Corporation (NVDA) stock. If you look at the equal weight SPDR® S&P Semiconductor ETF (XSD), it looks very different from the market-cap weighted VanEck Semiconductor ETF (SMH). Over the last three years, equal weighted Semis are up around 40%, while market-cap weighted is up nearly 120%....

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