Semiconductor Industry ETF


DEFINITION of 'Semiconductor Industry ETF'

A sector-following fund that invests in developers, manufacturers and marketers of digital and analog chips, so as to obtain investment results that closely match those of an underlying semiconductor index. There are a number of semiconductor ETFs trading on U.S. exchanges that are based on various chip indexes.

BREAKING DOWN 'Semiconductor Industry ETF'

The semiconductor industry is widely regarded as a leading indicator of U.S. economic activity. As a result, semiconductor indexes and the ETFs based on them tend to precede advances and declines in broad equity indexes.

By owning an ETF you get the diversification of an index fund as well as the ability to sell short, buy on margin and purchase as little as one share. Another advantage is that the expense ratios for most ETFs are lower than those of the average mutual fund. When buying and selling ETFs you have to pay the same commission to your broker that you'd pay on any regular order.

  1. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  2. Semiconductor

    A materials product - usually comprised of silicon - which conducts ...
  3. Book-To-Bill Ratio

    The ratio of orders received to units shipped and billed for ...
  4. Silicon Valley

    A part of the San Francisco Bay Area that is known for the many ...
  5. Philadelphia Semiconductor Index ...

    A price-weighted index composed of 18 U.S. semiconductor companies ...
  6. Exchange-Traded Mutual Funds (ETMF)

    Investopedia explains the definition of exchange-traded mutual ...
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