Saxo Bank Introduces New Semiconductor Equity Theme Basket

Danish multi-asset brokerage Saxo Bank announced that it has launched new semiconductor equity theme basket.

Its semiconductors basket includes 30 stocks with a combined market value of $3trn dominated by TSMC, NVIDIA, ASML, Intel, Broadcom, Texas Instruments, and Qualcomm. The median revenue growth rate the past year has been 7.6% while earnings have grown almost 20% as prices have increased due to the rising demand and ongoing supply constraints.

The broker mentions that Samsung is the largest producer of memory chips, but it has chosen to exclude the company as the main value driver of Samsung is its mobile division. The company’s theme baskets aim to provide as much pure exposure to the theme as possible. Sony has been excluded for the same reason as Samsung.

In addition, the basket consists of Mediatek and SK Hynix which are based in Taiwan and South Korea respectively and not tradable on the SaxoTrader. As explained by Saxo Bank, it has selected those two companies for their size and importance for the industry, and because sometimes tracking the theme better is more important than all companies are tradable on the SaxoTrader.

The basket increases 572% since December 2015 translating into an annualized return of 43% making the semiconductor industry one of best performing industries in the world in recent time. Past performance is of course no indicator of future performance and since we select stocks for the baskets on market value, there is always a selection and survivorship bias in the past performance measure. Therefore, investors should not look so much at past performance but instead look at present performance, the quality of the company and their outlook but deciding on which stocks to get exposure to.

Fazzaco earlier has reported on Saxo Bank posting trading volumes for March 2021, the client trading of the platform totaled $393.4 billion in March​.