Intel in semiconductor HOLDRs: stock fund also contains heavyweights such as AMD and Micron

Money Digest, August, 2000 by Chuck Chakrapani

In this space, I have discussed several HOLDRs Trusts, which are securities that enable individual investors to participate in different business sectors without having to invest a relatively large sum of money or pay a large MER. These aspects are particularly important in the volatile and high priced new economy sectors. This month I would like to discuss one more high tech sector for which HOLDRs are available: Semiconductor HOLDRS (AMEX: SMH; Recent price US$93).

Semiconductor companies develop, manufacture and market integrated circuitry and other products known as semiconductors, which help to increase speed and functionality in components used in computers and other electronic devices. Stocks in this sector include those of such stellar companies as Intel, Texas Instruments, Applied Materials, and Xilinx.

Semiconductor HOLDRs represent investors undivided ownership interest in the common stock of the 20 companies shown in the panel.

Another attractive feature is the razor thin annual expense of $0.08 per share, or generally less than 0.10%. This expense is waived to the extent it is not covered by dividends on the underlying stocks.

An investor may obtain HOLDRs by purchasing them in the secondary market -- just like any other stock -- or by depositing with the HOLDRs Trustee the required share amounts of the 20 underlying stocks and paying an issuance fee of up to $0.10 per HOLDR to the Trustee. HOLDRs can only be traded, issued and cancelled in round lots of 100 units. Investors may cancel their HOLDRs and take possession of the underlying stocks for a fee of no more than $0.10 per HOLDR.

Stocks held in SMH

Intel Corporation       INTC    15
Texas Instruments        TXN    11
Applied Materials       AMAT    13
Broadcom Corp.          BRCM     2
Micron Technology         MU     9
Analog Devices           ADI     6
Xilinx Inc.             XLNX     5
Maxim IntegratedPrd     MXIM     5
UCTS                    UCTS     5
LSI Logic Group          LSI     5
Teradyne Inc.            TEA     3
Altera Corporation      ALTA     3
Linear Technology       LLTC     5
Vitesse Semiconductor   VTSS     3
Advanced Micro Devices   AMD     2
KLA-Tencor Corp.        KLAC     3
National Semiconductor   NSM     3
Atmel Corporation       ATML     4
Novellus Systems        NVLS     2
Amkor Technology        AMKR     2

Sandisk Corp. SNDK 1