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Taiwan Semiconductor Manufacturing (TSM - Free Report) reported robust second-quarter 2024 results, wherein it beat estimates for both the top and the bottom lines on surging demand for advanced chips used in AI applications. This Taiwan-based chipmaker lifted revenue growth projects for the full year, reflecting its confidence in the longevity of the global AI spending boom.
Investors seeking to tap TSM growth could consider ETFs having the largest allocation to the world’s largest contract semiconductor manufacturer. These include SP Funds S&P World ex-US ETF (SPWO - Free Report) , SP Funds S&P Global Technology ETF (SPTE - Free Report) , VanEck Vectors Semiconductor ETF (SMH - Free Report) , Global X Emerging Markets ex-China ETF (EMM) and Xtrackers Semiconductor Select Equity ETF (CHPS - Free Report) .
Earnings in Focus
The company reported earnings per ADR of $1.48, which outpaced the Zacks Consensus Estimate of $1.37 and improved 36.3% from the year-ago earnings. Revenues rose 40% year over year to $20.8 billion and were above the estimate of $20.2 billion.
Taiwan Semiconductor, which makes chips for companies from Apple (AAPL - Free Report) to NVIDIA (NVDA - Free Report) , is benefiting from the global AI boom that has helped it weather the tapering off of pandemic-led electronics demand. It lifted its full-year revenue guidance to above the mid-20% range from the previous prediction of an increase in the low to mid-20% range. For the current third quarter, the company expects revenues to grow 30%-33% year over year to $22.4-$23.2 billion (read: Beyond AI, Semiconductor ETFs Have Another Reason to Rally).
TSM expects its business to be supported by strong demand for its industry-leading 3 nanometre (nm) and 5nm technologies.
SP Funds S&P World ex-US ETF tracks the S&P DM Ex-U.S. & EM 50/50 Shariah Index, which is designed to measure the performance of sharia-compliant components of emerging market and developed market stocks, excluding U.S. stocks. It holds a basket of 324 stocks, with Taiwan Semiconductor taking the top spot at 16.3%.
SP Funds S&P World ex-US ETF has accumulated $21.1 million in its asset base since its inception in late December. It charges 55 bps in annual fees and trades in a lower average trading volume of 11,000 shares.
SP Funds S&P Global Technology ETF seeks to provide exposure to global technology companies through large and mid-cap stocks. The fund invests in the index with companies that leverage leading new technologies to benefit as the global economy moves toward a post-interest cycle recovery. It follows the S&P Global 1200 Shariah Information Technology (Sector) Capped index and holds 98 stocks in its basket. Taiwan Semiconductor occupies the top position with a 14.3% share (read: Tough Time Ahead of Nasdaq & Semiconductor ETFs?).
SP Funds S&P Global Technology ETF has accumulated $35 million in its asset base and charges 55 bps in fees per year. It trades in a volume of 7,000 shares a day on average.
VanEck Vectors Semiconductor ETF offers exposure to companies involved in semiconductor production and equipment. It follows the MVIS US Listed Semiconductor 25 Index, which tracks the most liquid companies in the industry based on market capitalization and trading volume. VanEck Vectors Semiconductor ETF holds 26 stocks in its basket, with Taiwan Semiconductor occupying the top position at 20%.
VanEck Vectors Semiconductor ETF has managed assets worth $22 billion and charges 35 bps in annual fees and expenses. SMH trades in an average daily volume of 7 million shares and has a Zacks ETF Rank #1 (Strong Buy) with a High-risk outlook (read: Trump Trade Resurgence: ETF Areas Set to Gain or Lose).
Global X Emerging Markets ex-China ETF is an actively managed fund seeking to invest in emerging market companies, excluding China, that are believed to achieve or maintain a dominant position within their respective market. As part of its investment strategy, EMM aims to identify early winners in growing industries where entrepreneurship can produce long-term global competitiveness. Global X Emerging Markets ex-China ETF holds 74 stocks in its basket, with Taiwan Semiconductor taking the top position at 9.5% share.
Global X Emerging Markets ex-China ETF has AUM of $28.1 million and charges 75 bps in annual fees. It trades in a volume of 7,000 shares a day on average.
Xtrackers Semiconductor Select Equity ETF seeks to track the Solactive Semiconductor ESG Screened Index. It holds 51 stocks, with TSM being the third firm with a 5.2% share. Xtrackers Semiconductor Select Equity ETF charges 15 bps in annual fees and has AUM of $8 million. It trades in an average daily volume of 1,000 shares.
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ETFs in Focus Post TSMC's Q2 Earnings Beat
Taiwan Semiconductor Manufacturing (TSM - Free Report) reported robust second-quarter 2024 results, wherein it beat estimates for both the top and the bottom lines on surging demand for advanced chips used in AI applications. This Taiwan-based chipmaker lifted revenue growth projects for the full year, reflecting its confidence in the longevity of the global AI spending boom.
Investors seeking to tap TSM growth could consider ETFs having the largest allocation to the world’s largest contract semiconductor manufacturer. These include SP Funds S&P World ex-US ETF (SPWO - Free Report) , SP Funds S&P Global Technology ETF (SPTE - Free Report) , VanEck Vectors Semiconductor ETF (SMH - Free Report) , Global X Emerging Markets ex-China ETF (EMM) and Xtrackers Semiconductor Select Equity ETF (CHPS - Free Report) .
Earnings in Focus
The company reported earnings per ADR of $1.48, which outpaced the Zacks Consensus Estimate of $1.37 and improved 36.3% from the year-ago earnings. Revenues rose 40% year over year to $20.8 billion and were above the estimate of $20.2 billion.
Taiwan Semiconductor, which makes chips for companies from Apple (AAPL - Free Report) to NVIDIA (NVDA - Free Report) , is benefiting from the global AI boom that has helped it weather the tapering off of pandemic-led electronics demand. It lifted its full-year revenue guidance to above the mid-20% range from the previous prediction of an increase in the low to mid-20% range. For the current third quarter, the company expects revenues to grow 30%-33% year over year to $22.4-$23.2 billion (read: Beyond AI, Semiconductor ETFs Have Another Reason to Rally).
TSM expects its business to be supported by strong demand for its industry-leading 3 nanometre (nm) and 5nm technologies.
ETFs to Tap
Let’s delve into each ETF below:
SP Funds S&P World ex-US ETF (SPWO - Free Report)
SP Funds S&P World ex-US ETF tracks the S&P DM Ex-U.S. & EM 50/50 Shariah Index, which is designed to measure the performance of sharia-compliant components of emerging market and developed market stocks, excluding U.S. stocks. It holds a basket of 324 stocks, with Taiwan Semiconductor taking the top spot at 16.3%.
SP Funds S&P World ex-US ETF has accumulated $21.1 million in its asset base since its inception in late December. It charges 55 bps in annual fees and trades in a lower average trading volume of 11,000 shares.
SP Funds S&P Global Technology ETF (SPTE - Free Report)
SP Funds S&P Global Technology ETF seeks to provide exposure to global technology companies through large and mid-cap stocks. The fund invests in the index with companies that leverage leading new technologies to benefit as the global economy moves toward a post-interest cycle recovery. It follows the S&P Global 1200 Shariah Information Technology (Sector) Capped index and holds 98 stocks in its basket. Taiwan Semiconductor occupies the top position with a 14.3% share (read: Tough Time Ahead of Nasdaq & Semiconductor ETFs?).
SP Funds S&P Global Technology ETF has accumulated $35 million in its asset base and charges 55 bps in fees per year. It trades in a volume of 7,000 shares a day on average.
VanEck Vectors Semiconductor ETF (SMH - Free Report)
VanEck Vectors Semiconductor ETF offers exposure to companies involved in semiconductor production and equipment. It follows the MVIS US Listed Semiconductor 25 Index, which tracks the most liquid companies in the industry based on market capitalization and trading volume. VanEck Vectors Semiconductor ETF holds 26 stocks in its basket, with Taiwan Semiconductor occupying the top position at 20%.
VanEck Vectors Semiconductor ETF has managed assets worth $22 billion and charges 35 bps in annual fees and expenses. SMH trades in an average daily volume of 7 million shares and has a Zacks ETF Rank #1 (Strong Buy) with a High-risk outlook (read: Trump Trade Resurgence: ETF Areas Set to Gain or Lose).
Global X Emerging Markets ex-China ETF (EMM)
Global X Emerging Markets ex-China ETF is an actively managed fund seeking to invest in emerging market companies, excluding China, that are believed to achieve or maintain a dominant position within their respective market. As part of its investment strategy, EMM aims to identify early winners in growing industries where entrepreneurship can produce long-term global competitiveness. Global X Emerging Markets ex-China ETF holds 74 stocks in its basket, with Taiwan Semiconductor taking the top position at 9.5% share.
Global X Emerging Markets ex-China ETF has AUM of $28.1 million and charges 75 bps in annual fees. It trades in a volume of 7,000 shares a day on average.
Xtrackers Semiconductor Select Equity ETF (CHPS - Free Report)
Xtrackers Semiconductor Select Equity ETF seeks to track the Solactive Semiconductor ESG Screened Index. It holds 51 stocks, with TSM being the third firm with a 5.2% share. Xtrackers Semiconductor Select Equity ETF charges 15 bps in annual fees and has AUM of $8 million. It trades in an average daily volume of 1,000 shares.