The Smartest Growth ETF to Buy Right Now -- and It's Up 50% in 2026
2026-08-04 13:30
•David Dierking •The Motley Fool
••••• ••••••••• Axe Cap view
Semiconductor Sell-Off: A Chance for Patient SA Investors
The recent 20% drop in the VanEck Semiconductor ETF offers a look into global tech corrections, with subtle local implications for the rand and selected sectors.
The semiconductor sector has taken a hit, with the VanEck Semiconductor ETF down about 20% from its highs. This pullback reflects investors demanding real AI-generated earnings rather than lofty promises. While big US tech companies like Alphabet and Meta face skepticism due to high AI spending and shrinking free cash flow, the chipmakers powering AI remain fundamentally strong. For South African investors, this isn’t just a US tech story. A firmer dollar generally pressures the rand (USD/ZAR), which can raise costs for local importers and weigh on commodity-linked firms, but it can also buoy exporters like AngloGold Ashanti. Financials such as Standard Bank and Nedbank might feel mixed effects given their overseas exposure. The key takeaway: semiconductor demand stays robust and supply constrained, hinting chipmakers will maintain pricing power and profit growth once the hype calms down. If the dollar weakens faster than expected, it could soften rand volatility and reduce investor anxiety. this is just our opinion and not financial advice
Trim exposure to cyclical rand beneficiaries for now and watch the USD/ZAR closely. Avoid chasing US tech shares aggressively; instead, focus on resilient local counters like AngloGold Ashanti that can profit from a stronger dollar environment.
- USD/ZAR
- AngloGold Ashanti
- US tech spending disappoints further, worsening global risk appetite
- Unexpected rand strength undermines exporters' earnings
6/10
The VanEck Semiconductor ETF (SMH) has fallen 20% from recent highs as investors demand tangible AI results rather than aggressive spending. Despite the correction, the ETF presents a potential 'buy the dip' opportunity, as underlying demand for semiconductors remains strong with supply still lagging, giving chip companies pricing power to sustain earnings growth.
Our take is based on reporting first published by The Motley Fool.