Is State Street SPDR S&P Semiconductor ETF (XSD) a Strong ETF Right Now?

Making its debut on 01/31/2006, smart beta exchange traded fund State Street SPDR S&P Semiconductor ETF (XSD) provides investors broad exposure to the Technology ETFs category of the market.What Are Smart Beta ETFs?The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.Fund Sponsor & IndexThe fund is managed by State Street Investment Management, and has been able to amass over $1.63 billion, which makes it one of the larger ETFs in the Technology ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S&P Semiconductor Select Industry Index.The S&P Semiconductor Select Industry Index represents the Semiconductor sub-industry portion of the S&P Total Markets Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Semiconductor Index is a modified equal weight index.Cost & Other ExpensesFor ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.Operating expenses on an annual basis are 0.35% for XSD, making it one of the least expensive products in the space.The fund has a 12-month trailing dividend yield of 0.25%.Sector Exposure and Top HoldingsETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.This ETF has heaviest allocation in the Information Technology sector - about 100% of the portfolio.Taking into account individual holdings, Micron Technology Inc (MU) accounts for about 4.22% of the fund's total assets, followed by Silicon Laboratories Inc (SLAB) and Power Integrations Inc (POWI).Its top 10 holdings account for approximately 34.33% of XSD's total assets under management.Performance and RiskThe ETF has added roughly 2.15% and was up about 51.75% so far this year and in the past one year (as of 03/27/2026), respectively. XSD has traded between $160.63 and $368.80 during this last 52-week period. The fund has a beta of 1.64 and standard deviation of 36.20% for the trailing three-year period, which makes XSD a high risk choice in this particular space. With about 46 holdings, it has more concentrated exposure than peers .AlternativesState Street SPDR S&P Semiconductor ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.iShares Semiconductor ETF (SOXX) tracks PHLX SOX Semiconductor Sector Index and the VanEck Semiconductor ETF (SMH) tracks MVIS US Listed Semiconductor 25 Index. iShares Semiconductor ETF has $20.73 billion in assets, VanEck Semiconductor ETF has $42.74 billion. SOXX has an expense ratio of 0.34% and SMH changes 0.35%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFsBottom LineTo learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report State Street SPDR S&P Semiconductor ETF (XSD): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks