Chip ETF draws investor cash amid Nasdaq rout

The FAANG cratering has done nothing to stanch the appetite of exchange-traded-fund investors in other parts of the technology space.

They poured $175 million (Dh642.78 million) into the VanEck Vectors Semiconductor ETF on Monday, boosting the inflow since Thursday to $629 million. That’s the biggest three-day intake since April, data compiled by Bloomberg show. In contrast, eight days of withdrawals from the Invesco QQQ Trust Series 1 ETF have drained $3.2 billion from the fund.

It’s more evidence investor angst is confined to the highestflying tech segment and not the industry at large. Strong chipmaker earnings from Advanced Micro Devices Inc to Xilinx Inc and Taiwan Semiconductor Manufacturing Co are helping the sector withstand a rout in a broader tech index, which posted the biggest three-day drop since March after Facebook Inc’s user growth miss.

Declines in the FAANGs sent ripples to chipmakers, pushing the group lower on Friday and Monday. But the move was nowhere close to a slump in tech megacaps since Facebook’s miss.

“If they can hold up, it will lower the odds considerably that the other big-cap momentum names will see another leg lower,” said Matt Maley, equity strategist at Miller Tabak & Co.”Of course, all bets will be off if Apple gives us a lousy earnings report tonight [they’re a huge buyer of chips], but right now, the action in the semis is definitely positive.”

Apple Inc’s earnings report, due after the market close on Tuesday, will either send chipmakers higher or push the group lower together with a broader gauge of tech stocks.

Apple is the main customer of Taiwan Semiconductor Manufacturing Co, the largest holding in the VanEck Vectors Semiconductor ETF.

Half of the stocks in the the iShares PHLX Semiconductor ETF rely on Apple for a portion of their revenue. The fund took in $129 million on Monday, widening its two-day inflow to $203 million.