I use ETFs for exposure to international markets. Simple on tax, simple to trade via local exchanges.

One of my multiple checks before buying into an ETF is whether the underlying holdings have overlap with any other ETFs I hold.

In the case of SEMI, I compared it to NDQ – which tracks the NASDAQ 100.

Across the top 10 holdings in SEMI, 9 of them are replicated in NDQ.

The 9 holdings: NVIDIA CORP, INTEL CORP, BROADCOM INC, TEXAS INSTRUMENT, QUALCOMM INC, ADV MICRO DEVICE, APPLIED MATERIAL, ANALOG DEVICES, ASML HOLDING NV.

These 9 holdings make up 60.5% of the total weight of SEMI.

These same 9 holdings make up 11.5% of NDQ.

Outcome:

I already have exposure to ~60% of SEMI by holding NDQ. However, NDQ does not offer me exposure to one specific company that make up 9.5% of SEMI, that being TSMC (micro chip maker/ foundry).

I therefore don’t necessarily need to buy SEMI when I already hold NDQ.

I would consider buying SEMI if I developed a thesis where I wanted more weight in the semiconductor industry – but I would need to acknowledge, that both ETFs will likely increase and decrease in concert due to the overlaps.

I would also have to ask as part of that thesis, do I want to hold the SEMI index, or will one or two or three specific winners within the industry or index or thesis outperform overall?