Broadcom Guidance Weighs on Semiconductor ETFs

By Francesca Fontana

A number of ETFs with high exposure to Broadcom Inc. (AVGO) fell Friday after the chip maker lowered its revenue outlook amid trade tensions with China. Broadcom shares lost 6.5% and other semiconductor stocks are among the top losers in the S&P 500 today.

Among the ETFs with Broadcom among their top 10 holdings are ProShares Ultra Semiconductors (USD), First Trust NASDAQ Semiconductor ETF (FTXL) and Direxion Daily Semiconductor Bull 3X Shares (SOXL).

The ProShares-issued USD is a leveraged fund that seeks to provide two times the exposure to a market-cap-weighted index that tracks the performance of large U.S. semiconductor companies, according to ETF.com. Among its top 10 holdings are Intel (INTC) and Nvidia (NVDA). USD declined 5.2% to $35.79, according to FactSet.

FTXL, issued by First Trust, tracks an index of highly liquid U.S. semiconductor companies, weighted by factors related to value, volatility, and growth, according to ETF.com. Among its top 10 holdings are InterDigital (IDCC) and Analog Devices (ADI). FTXL lost 3.1% to $30.42.

SOXL, issued by Rafferty Asset Management, aims to provide 3 times the daily exposure to a modified market-cap-weighted index of companies involved in the design, distribution, manufacture and sale of semiconductors, according to ETF.com. Among its top 10 holdings are Texas Instruments (TXN) and Qualcomm (QCOM). SOXL was off 8.5% to $119.50.

Broadcom Inc. said late Thursday that it would make $2 billion less in annual sales than expected following the U.S. ban on exports to Chinese telecom giant Huawei Technologies Co., becoming one of the first big chip makers to quantify the financial effects of the escalating trade dispute between the U.S. and China.

Write to Francesca Fontana at [e-mail].

(END) Dow Jones Newswires

June 14, 2019 14:31 ET (18:31 GMT)

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