Strive Launches U.S. Semiconductor ETF, Tracking Solactive Index
The semiconductor industry faced a global shortage last year, making car manufacturers idle their production lines or – on the more creative side – utilize dummy chips in their production. That scenario confirmed how essential semiconductors are to many industries and to the economy. They are key components of electronic devices, enabling advances in computing, communications, healthcare, military defense, transportation, home appliances, and more. Demand for many of these products has increased, showcasing the great potential of the semiconductor industry. The sector has grown by more than 20% to around $600 billion in 2021 and is forecast to have an aggregate annual growth from 6 to 8 percent up to 2030, according to an analysis by McKinsey[1]. The document shows that the result is a $1-trillion-dollar industry by the end of the decade. Envisaging this potential, Strive Asset Management has launched the Strive U.S. Semiconductors ETF, which tracks the Solactive United States Semiconductors 30 Capped Index.
The Solactive United States Semiconductors 30 Capped Index is a representation of the largest 30 securities in the semiconductors industry in the United States stock market. To be eligible for inclusion in the index, securities must be assigned either to the Semiconductor and Related Device Manufacturing Industry or to the Semiconductor Machinery Manufacturing.
The ETF listed on the New York Stock Exchange under the ticker symbol “SHOC“.
Timo Pfeiffer, Chief Markets Officer at Solactive, commented: “Semiconductors serve as the heart and soul of every electric device, from domestic appliances to cars. With a growing need for chips to fuel our future smart economy and the new remote working trend as well as a likely global 5G rollout, companies active in this megatrend now are well positioned for future growth. Strive Asset Management perceived the enormous potential of this industry, which will accompany us for the next decades to come. We are excited to be part of this thematic ETF release, and we look forward to launching more innovative products with Strive.”
Matt Cole, Head of Investments & Products at Strive, added: “We live in a digital world and semiconductors are the new oil in this world. Not only are semiconductors crucial for most components of our daily lives, but they’re also critical for national security. Semiconductors have matured as a sector with now a majority of demand coming from non-consumer sectors. This diversified demand structure will help the semiconductor industry’s revenue stream be less cyclical in nature, furthering the attractiveness of the sector. In our view, the biggest risk of investing in semiconductors is geopolitical. With tensions surrounding China and Taiwan continuing to grow, Strive’s U.S. Semiconductor fund, SHOC offers investors exposure to this growing industry while minimizing geopolitical risk.”
[1] https://www.mckinsey.com/industries/semiconductors/our-insights/the-semiconductor-decade-a-trillion-dollar-industry