Invest Wisely: Top ETFs in the AI Sphere

[View in browser]( [The Juice Logo] Editor’s Note It’s Friday. Time to give you a stock pick from our sister newsletter, The Spill, so you can think about it over the weekend and maybe make a move Monday morning. While The Juice helps you be better with money across the board, The Spill focuses on stocks financial pros are researching and judges how good of buys they are. If you’re already sold, you can sign up for The Spill – for free – here. [-facebook-share]( [-twitter-share]( [-linkedin-share]( [-email-share](mailto:?body= %3Cbr+%2F%3E%0A%3Cb%3ENotice%3C%2Fb%3E%3A++Undefined+property%3A+stdClass%3A%3A%24previewText+in+%3Cb%3E%2Fvar%2Fwww%2Fhtml%2Fnl_forms%2Fsrc%2FICTheJuiceAlternate%2Fautomate-ic-article.php%3C%2Fb%3E+on+line+%3Cb%3E98%3C%2Fb%3E%3Cbr+%2F%3E%0Ahttps%3A%2F%2Finvestingchannel.com%2F%3Fp%3D583145?utm_medium=ic-nl&utm_source=109021 ) Proprietary Data Insights Financial Pros’ Top Semiconductor ETF Searches in the Last Month Rank Name Searches #1 'VanEck Vectors Semiconductor ETF 300 #2 'iShares PHLX Semiconductor ETF 75 #3 'SPDR S&P Semiconductor ETF 25 #4 'First Trust Nasdaq Semiconductor ETF 9 #5 'Invesco Dynamic Semiconductors ETF 2 #ad [It's time you learn about Alternative Investments!]( Brought to you by [InvestingChannel]( [Tickers Trending Among FinPros & Retail Investors]( [ InvestingChannel - Tickers Trending Among FinPros & Retail Investors]( Once every quarter, we compile millions of Financial Professional and Retail Investor's stock searches across our 100+ financial sites. We reserve this exclusive report for our newsletter subscribers so you can learn about the stocks and industries that you should keep an eye on. This info can help you decide what to do in your portfolio – so you can protect the money you have and generate bigger gains. [Click here now to download the FREE Trackstar Q1 2023 Report.]( Financial Pros Top ETF for AI Our TrackStar Data confirms what most of us assumed…AI stocks are red hot! Search volume amongst retail and financial pros skyrocketed for companies like NVIDIA (NVDA) and c3.AI (AI). While there are some ‘AI’ ETFs out there, they don’t do a particularly good job of investing in the space. In fact, our data picked up a different tact by financial pros. Instead of looking at esoteric technology ETFs, they’re focused on semiconductor ETFs, particularly the VanEck ETF (SMH). It’s a simple story, really… AI = Processing Power = Semiconductors So, if you’re looking for an investment strategy straight from the financial pros playbook, here’s why you should consider the SMH. Key Facts About SMH - Net assets: $9.0 billion - 12-month trailing yield: 0.83% - Inception: May 5, 2000 - Expense ratio: 0.35% - Number of holdings: N/A VanEck’s SMH ETF tracks the MVIS® US Listed Semiconductor 25 Index, which is comprised of companies involved in semiconductor production and equipment. The SMH is the most popular in the market in terms of total assets under management to daily trading volume. Because of this, investors can either invest directly in the ETF or use options. While the ETF only holds 25 stocks, it includes the who’s who of the semiconductor world. And anyone familiar with AI and microprocessors is sure to recognize the top holdings on this list. [Holdings] [Source: VanEck]( The semiconductor space comprises big players, which is why the weighted average market cap for the ETF is $306 billion. And that makes sense when you think about it. The startup costs associated with a fabrication facility are astronomical, while design specialists tend to get bought up by the big players. [Portfolio] [Source: VanEck]( Performance The average investor probably assumes semiconductor stocks are up hundreds of percentage points over a 5-year period. In actuality, only a couple of players have done so, and many quite recently, as noted by the YTD gains below. [Returns] [Source: VanEck]( Still, a total 5-year gain of 177% is nothing to sneeze at. Equally impressive is the 10-year average gain, highlighting the consistent demand. Competition If you’re looking for a semiconductor ETF, there are quite a few out there, each with a slightly different flavor. - iShares Semiconductor ETF (SOXX): Tracks an index of the 30 largest U.S.-listed semiconductor companies, which includes companies based outside the U.S. - SPDR S&P Semiconductor ETF (XSD): A modified equal-weight index of semiconductor companies, providing a more balanced exposure across different sizes of companies in the sector. - First Trust Nasdaq Semiconductor ETF (FTXL): Employs a modified factor weighting methodology to invest in semiconductor companies listed on the Nasdaq, focusing on liquidity, value, volatility, and momentum. - Invesco Dynamic Semiconductors ETF (PSI): A passively managed ETF that attempts to beat the industry by selecting and weighting 30 semiconductor companies using a proprietary methodology focusing on risk factors, style classification, and stock valuation. This list of ETFs is a perfect example of why simpler is better. The last two ETFs, where fund managers try to gain an edge through some methodology tweak, are the worst performers.[Net assets] Our Opinion 10/10 We expect AI investments are at the beginning stages of a supercycle. While not every semiconductor company will benefit, we like the SMH given its heavier weighting towards those companies. With ample liquidity, it should be a staple for any model portfolio. 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