Domestic money market funds line up smart funds as stocks soar

The global semiconductor shortage is becoming a headache for manufacturers of automobiles (automobiles) and household appliances. But it turns out to be a boon for equity investors. Semiconductor stocks are among the best performers this year. The PHLX Semiconductor index has gained more than 35% since the start of the year.

Amid a positive sentiment towards chip companies, mutual funds (MFs) have lined up foreign funds that provide easy exposure to companies in the semiconductor ecosystem.

Tata MF has filed an offering document with the market regulator Securities and Exchange Board of India (Sebi) to launch the Tata Global Semiconductor fund of funds.

Nippon India launched India’s first Taiwanese equity fund in partnership with Taiwanese asset manager Cathay Securities Investment Trust (SITE). Taiwan is a global player in the semiconductor and electronics industry.

The program Tata MF seeks to launch will invest in iShares Semiconductor Exchange-Traded Fund (ETF), iShares MSCI Global Semiconductors UCITS ETF, VanEck Semiconductor ETF, SPDR S&P Semiconductor ETF and Fidelity Select Semiconductors Fund.

Semiconductors or chips are the brains of modern electronics, enabling advancements in medical devices and healthcare, communications, computing, clean energy, and future technologies, such as intelligence. artificial, quantum computing and advanced wireless networks. Global demand for semiconductors continues to grow and is further driven by the accelerated pace of digitization.

“The demand for crisps exceeds the supply. The production of many car manufacturers and consumer electronics companies around the world will be affected. While the semiconductor shortage appears to be a challenge, it also offers an opportunity. Many technology (tech) companies have started to develop their properties, ”said Andy Chang, President and CEO of Cathay SITE.

The economy and markets of Taiwan are largely based on the semiconductor and electronics industries, which have a wide and diverse use.

Taiwan’s dominance can be attributed to the Taiwan Semiconductor Manufacturing Company (TSMC), the largest foundry in the world with large technology companies among its customers.

TSMC represents more than half of the global semiconductor foundry market. Taiwan has a 52 percent share of the semiconductor contract manufacturing market.

While the idea of ​​investing in the semiconductor industry sounds appealing, investment experts believe these funds should be a small part of the portfolio.

“Semiconductor stocks have already rebounded strongly this year. They can still be good long term bets. In a tech-driven world, chips will be at the heart. However, investors should ideally only have a 5-10% portfolio allocation in thematic funds, ”said one investment adviser.

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