Is SPDR S&P Semiconductor ETF (XSD) a strong ETF right now?

A smart beta exchange traded fund, the SPDR S&P Semiconductor ETF (XSD - Free Report) debuted on 01/31/2006, and offers broad exposure to the Technology ETFs category of the market.

What are smart beta ETFs?

For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.

A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.

If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.

This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.

Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.

Fund sponsor and index

XSD is managed by State Street Investment Management, and this fund has amassed over $1.52 billion, which makes it one of the larger ETFs in the Technology ETFs. This particular fund seeks to match the performance of the S&P Semiconductor Select Industry Index before fees and expenses.

The S&P Semiconductor Select Industry Index represents the Semiconductor sub-industry portion of the S&P Total Markets Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Semiconductor Index is a modified equal weight index.

Cost and other expenses

Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.

Annual operating expenses for XSD are 0.35%, which makes it one of the least expensive products in the space.

XSD's 12-month trailing dividend yield is 0.24%.

Sector exposure and top holdings

ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Information Technology sector - about 100% of the portfolio.

Taking into account individual holdings, Astera Labs Inc (ALAB) accounts for about 5.13% of the fund's total assets, followed by Credo Technology Group Holdi (CRDO) and Impinj Inc (PI).

XSD's top 10 holdings account for about 36.08% of its total assets under management.

Performance and risk

So far this year, XSD has gained about 24.32%, and is up about 36.38% in the last one year (as of 09/18/2025). During this past 52-week period, the fund has traded between $160.63 and $308.41.

The ETF has a beta of 1.56 and standard deviation of 36.89% for the trailing three-year period, making it a high risk choice in the space. With about 42 holdings, it has more concentrated exposure than peers.

Alternatives

SPDR S&P Semiconductor ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.

iShares Semiconductor ETF (SOXX) tracks PHLX SOX Semiconductor Sector Index and the VanEck Semiconductor ETF (SMH) tracks MVIS US Listed Semiconductor 25 Index. iShares Semiconductor ETF has $14.21 billion in assets, VanEck Semiconductor ETF has $29.22 billion. SOXX has an expense ratio of 0.34% and SMH changes 0.35%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs

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