The iShares Semiconductor ETF (NASDAQ: SOXX) has returned about 118% over the past 12 months, dividends included. The same fund has averaged 14.2% a year since it launched on July 10, 2001. Set those two numbers side by side, and the past year starts to look surreal.
At the fund's long-run pace, a 118% gain takes about six years to accumulate. Semiconductor investors just collected it in one, as spending on the graphics processing units (GPUs) and infrastructure behind artificial intelligence (AI) boomed. This Rare Signal Is Flashing Again.
In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » The fund holds about $43 billion in assets, making it one of the biggest semiconductor funds investors can buy.
So plenty of people now own a piece of this run -- and plenty more are likely wondering whether to chase it. What has happened after this fund's other enormous years? Work through the fund's monthly price history, and only two earlier stretches come anywhere near a year like this one.
The 12 months through January 2004 delivered about 97%, as chip stocks rebounded violently from the dot-com bust. And the 12 months through March 2021 produced about 109%, powered by the pandemic's electronics boom and the first wave of chip shortages. That's the whole list -- and neither quite matches this one.
The trailing-year figure reached about 170% at the end of June, far beyond anything in the fund's 25 years, before the recent pullback trimmed it to about 118%. What followed those two earlier runs is where the record gets uncomfortable. Both episodes disappointed in the year that followed, then split completely.
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