New Listing

BlackRock launches semiconductor ETF

SEMI offers exposure to 234 large, mid and small-cap companies involved in the semiconductors industry

Tom Eckett

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BlackRock has expanded its thematic ETF range with the launch of a global semiconductor strategy.

The iShares MSCI Global Semiconductors UCITS ETF (SEMI) is listed on Euronext and Deutsche Boerse with a total expense ratio (TER) of 0.35%.

SEMI tracks the MSCI ACWI IMI Semiconductors & Semiconductor Equipment ESG Screened Select Capped index which offers currently offers exposure to 234 large, mid and small-cap companies involved in the semiconductors industry.

This includes companies involved in artificial intelligence in medical research, cloud computing, 5G, internet of things, power modules, smart grid technology and digital payments in finance.

Physically-replicated, SEMI excludes companies involved in unsustainable practices such as controversial weapons, tobacco, thermal coal, oil sands extraction and those not compliant with the United Nations Global Compact principles.

The top five companies in the index are capped at 8% and all other securities are capped at 5% in order to avoid concentration risk.

According to Boston Consulting Group, the industry will need to invest about $3trn in R&D and capital expenditure globally across the value chain to meet the growing demand for semiconductors over the next 10 years.

BlackRock said in a statement: “Many of the technological advances of the past half-century have only been possible due to the developments in semiconductors.

“The performance and cost improvements delivered by the semiconductor industry facilitated the evolution from mainframe computers to personal computers in the 1990s, the architecture underpinning the internet and online services in the 2000s, and the advent of the smartphone in the 2010s.

“Semiconductors remain at the forefront of innovation and form the backbone of powerful, emerging technologies with the potential to shape our future.”

This is the second semiconductor ETF available on the European market. Last December, VanEck launched Europe’s first ETF, the VanEck Vectors Semiconductor UCITS ETF (SMGB), which tracks the MVIS US Listed Semiconductor 10% Capped index.

Earlier this week, BlackRock expanded its Paris-aligned climate ETF range with the launch of two European equity strategies, the iShares MSCI EMU Paris-Aligned Climate UCITS ETF (EMPA) and the iShares MSCI Europe Paris Aligned UCITS ETF (EUPB).

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