Market Overview

Semiconductor Funds Hit The Skids In Sector Selloff

Semiconductor Funds Hit The Skids In Sector Selloff

Microchip Technology Inc. (NASDAQ: MCHP) led stocks lower on October 11 after the mid-cap chip maker forecast an industry-wide slump.

Microchip Tech skidded 12.26 percent on the session; the iShares S&P NA Tec. Semi. Idx. Fd. (NASDAQ: SOXX), which tracks the Philadelphia Semiconductor Index, gapped down 6.89 percent.

Semiconductor-sector mutual funds also suffered.

Fidelity Select Electronics Portfolio

The Fidelity Select Electronics Portfolio (MUTF: FSELX) slipped 6.19 percent in the chip selloff. Top holdings in the fund include Intel Corporation, Broadcom Corporation, Texas Instruments Incorporated, Altera Corporation, Qualcomm, Inc., Freescale Semiconductor Ltd and Lam Research Corporation.

Related Link: How Will Funds Handle Hewlett-Packard Company?

The Fidelity Select Electronics Portfolio has a net asset value of $74.59, total assets of $1.9 billion, and an expense ratio of 0.79 percent. The fund has been very successful during the bull run.

Year-to-date, the fund has gained 10.83 percent and its one-year return is 30.42 percent. Its three-year return is 19.79 percent. Don't get too excited about that view from the rear-view mirror, however. Last year's leading fund can be next year's laggard, because asset classes go in and out of favor.

ProFunds Semiconductor

Another chip-heavy fund that took a downward turn was the ProFunds Semiconductor UltraSector Fund Investor Class (MUTF: SMPIX). It slipped 10 percent in Friday's chip selloff.

ProFunds Semiconductor has a net asset value of $22.20, and total assets of $95.1 million. Its year-to-date return is 15.09 percent.

The fund's top holdings are Intel, Texas Instruments, Micron Technology, Inc., Applied Materials, Inc., Broadcom, Avago Technologies Ltd., Analog Devices, Inc. and KLA-Tencor Corporation.

While actively managed funds often have higher expense ratios than index funds, the expense ratio of the ProFunds Semiconductor UltraSector fund is a bit on the rich side: 1.73 percent. That's a high hurdle to overcome, especially in a sector as notoriously volatile as semiconductors.


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