VanEck Semiconductor ETF Delivers 31% Average Annual Returns with 0.35% Expense Ratio
Written by Emily J. Thompson, Senior Investment Analyst
Source: Fool
- Investment Returns: The VanEck Semiconductor ETF has delivered an impressive average annual return of nearly 31% over the past decade, significantly outperforming the Nasdaq-100's 19% return during the same period, highlighting its strong performance and investment appeal in the semiconductor sector.
- Cost Advantage: With an expense ratio of 0.35%, lower than the average 0.44% for actively managed funds, investors benefit from a relatively low management fee while enjoying high returns, enhancing the cost-effectiveness of their investments.
- Risk Management: Despite a 34% loss in value in 2022, the ETF's long-term performance remains superior to many peers, indicating its ability to manage risks effectively and its long-term investment value in volatile markets.
- Industry Concentration: The ETF invests nearly all its capital in 26 chip stocks, with 20% allocated to Nvidia and 11% to Taiwan Semiconductor, demonstrating a concentrated investment strategy that effectively captures growth opportunities within the semiconductor industry.
Analyst Views on TSM
Wall Street analysts forecast TSM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for TSM is 348.25 USD with a low forecast of 290.00 USD and a high forecast of 400.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
9 Analyst Rating
8 Buy
1 Hold
0 Sell
Strong Buy
Current: 318.010
Low
290.00
Averages
348.25
High
400.00
Current: 318.010
Low
290.00
Averages
348.25
High
400.00
About TSM
Taiwan Semiconductor Manufacturing Co Ltd is a Taiwan-based company mainly engaged in the provision of integrated circuit manufacturing services. The integrated circuit manufacturing services include process technology, special process technology, design ecosystem support, mask technology, 3DFabricTM advanced packaging and silicon stacking technology services. The Company has completed the transfer and mass production of 5nm technology, and is engaged in the research and development of 3nm process technology and 2nm process technology. The product application range covers the entire electronic application industry, including personal computers and peripheral products, information application products, wired and wireless communication system products, servers and data centers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
