PSI: There Is Different Winner In Semiconductor ETFs

Summary

• Invesco Semiconductors ETF is rated a hold due to its higher expense ratio and exclusion of key holdings compared to competitors like SMH.
• PSI's U.S.-only index excludes high-performing companies like TSM and ASML, which are included in SMH, providing SMH a competitive edge.
• Despite PSI's reasonable valuation, its top holding AVGO has a higher P/E ratio and lower growth metrics compared to NVDA, SMH's top holding.
• Semiconductor ETFs, including PSI, are volatile with high beta and standard deviation, quantifying significant risks including supply chain and geopolitical tensions.

luchezar

Investment Thesis

Invesco Semiconductors ETF (NYSEARCA:PSI) warrants a hold rating due to several negative factors compared to competitor funds concentrated on semiconductor companies. While the semiconductor industry is expected to see continued growth in 2025, other funds such as

Analyst’s Disclosure:I/we have a beneficial long position in the shares of SMH, AVGO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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