First Active Semiconductor ETF Just Launched

Columbia Threadneedle Investments has launched the first actively managed ETF that offers focused exposure to the semiconductor industry.

The Columbia Seligman Semiconductor and Technology ETF (SEMI), listed on the NYSE on March 30 with a 75 basis point expense ratio, is a thematic, growth-focused technology strategy that will invest primarily in the securities of semiconductor, semiconductor equipment, and related technology companies.

“No longer viewed as a cyclical sector, semiconductors have established themselves as the bedrock underlying the disruption and innovation brought about by new technologies,” Paul Wick, who leads Columbia Threadneedle’s $17.8 billion Seligman Technology team, said in a statement.

“We believe that semiconductors are a key driver of growth across the economy, from mobile handsets, PCs and robotic manufacturing to gaming consoles, electric vehicles and the metaverse,” Wick added.

The portfolio management team seeks to find fundamentally attractive semiconductor companies and related businesses with reasonable valuations. 

SEMI is a concentrated, high-conviction portfolio consisting of companies into which the team has gained insight through deep fundamental research and industry knowledge. On average, the fund typically will invest in 30 to 50 companies, from small emerging businesses to more well-established mega-cap stocks, but may at times hold more or fewer securities than this range, according to a statement from the firm.

The fund uses the Fidelity Proxy Structure, a semi-transparent wrapper, and will not provide daily transparency into its portfolio holdings, according to the NYSE.

“Grounded in the belief that investment insights matter, we have built a range of ETFs based on our conviction that we can improve conventional passive exposures with proprietary research and active portfolio management expertise,” Marc Zeitoun, head of strategic beta and private client advisory, said in a statement. 

Zeitoun added, “SEMI provides investors and their advisors with an opportunity to invest in companies that build the core technology powering nearly every disruption. We believe the actively managed semi-transparent ETF structure is right for this kind of solution.”

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