VanEck's semiconductor ETF reaches USD100m AUM in ten weeks
Just ten weeks after its launch, the VanEck Vectors Semiconductor UCITS ETF has reached over USD100 million in assets.
The index fund is the first UCITS-compliant ETF in Europe with a focus on companies from the semiconductor industry.
“The impressive and rapid growth of the ETF demonstrates the high demand on the investor side for investment opportunities in semiconductor companies,” says Martijn Rozemuller, head of Europe at VanEck. "We had already had many enquiries about a US version of our Semiconductor ETF in the past. By developing the UCITS variant, we also wanted to respond to this and offer our clients in Europe the opportunity to invest in the performance of companies in the semiconductor industry.”
The market for semiconductor technologies has performed well in the past. It is estimated that this could grow from USD488 billion in 2018 to over USD730 billion in 2026 – with an annual growth rate of around five per cent. Whether this will actually occur or whether countervailing market movements will dampen/reverse growth cannot, of course, be predicted with certainty.
“Semiconductors play an increasingly important role in the modern, digital economy. Almost all sectors are now directly or indirectly dependent on advanced computer technology," says Rozemuller. “Technologies such as robotics, cloud computing, autonomous driving and artificial intelligence demonstrate the growing need for powerful microchips, which in a sense are the nervous system of our technology today.”
The VanEck Vectors Semiconductor UCITS ETF invests in an international selection of semiconductor companies that demonstrate high liquidity due to their market capitalisation and trading volume. The “MVIS US Listed Semiconductor 10% Capped Index” on which the ETF is based is set up as a pure-play index. This means that only companies that generate at least 50 per cent of their sales with semiconductors and semiconductor accessories will be included. The weighting is limited to ten percent per company.
But investors should also be aware of the risks of an investment: The value of the securities held by the ETF may decrease due to general market and economic conditions in markets and the fund may invest a relatively high proportion of its assets in a smaller number of issuers at the expense of diversification.