Chip ETFs Down, May Be Out for a While

Semiconductors have been one of the worst-performing sectors in 2008.

So far this year, the Dow Jones U.S. Semiconductor Index has fallen 44.8%, while the S&P 500 is down 33.9%. Semiconductor ETFs have similarly felt the agony of the selloff. The PowerShares Dynamic Semiconductors Fund(PSI Quote), the Semiconductor HOLDRs Fund(SMH Quote) and the SPDR S&P Semiconductor ETF(XSD Quote) have seen respective year-to-date declines of 39.4%, 39.09% and 35.3%.

Investors who have taken the other side of the trade have fared much better. Of the 812 ETFs tracked by Morningstar, the top-performing ETF has been the UltraShort Semiconductor ProShares Fund(SSG Quote). The fund is designed to return shareholders twice the inverse of the daily performance of the Dow Jones U.S. Semiconductor Index. ...