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Strive Launches U.S. Semiconductor ETF (SHOC) Ahead of Potential China-Taiwan Annexation
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Strive Asset Management has launched the Strive U.S. Semiconductor ETF (SHOC) with an expense ratio of 0.40%, providing investors with exposure to the U.S. semiconductor sector amid rising geopolitical tensions, particularly regarding Taiwan. The ETF aims to capitalize on potential demand spikes due to a possible Chinese invasion of Taiwan, which manufactures 60% of global foundry semiconductors. The fund mandates U.S. companies to boost domestic production capabilities, as global semiconductor demand is projected to increase by over 80% by 2030.
Positive
Launch of the Strive U.S. Semiconductor ETF (SHOC) providing potential growth in the U.S. semiconductor sector.
Increased demand for U.S. semiconductor stocks may arise from geopolitical tensions, possibly leading to outperformance.
Negative
Geopolitical risks associated with potential Chinese annexation of Taiwan could disrupt global semiconductor supply.
The semiconductor sector is highly cyclical, experiencing economic downturns and diminished product demand.
China’s invasion or annexation of Taiwan could drive global semiconductor shortage creating potential spike in demand for U.S. semiconductors
COLUMBUS, Ohio--(BUSINESS WIRE)--
Strive Asset Management (“Strive”) launches its third index fund today, the Strive U.S. Semiconductor ETF (NYSE: SHOC, expense ratio: 0.40%), offering investors the opportunity to gain broad exposure to the U.S. semiconductor sector amid escalating geopolitical risk in Taiwan, the nation responsible for manufacturing 60% of the world’s foundry semiconductors. Semiconductors are the essential computing hardware for mobile phones, computers, cars, and even refrigerators. Global Semiconductor demand is estimated to grow over 80% by 2030.1
Strive’s ETF launch comes at a time of unprecedented cross-Straits tension. The Chinese Communist Party (CCP) appears very likely to select Xi Jinping for a third term as China’s leader, breaking the historical two-term chain of succession and making President Xi the longest-serving Chinese ruler since Mao Zedong. Strive believes this increases the risk that China will attempt to annex Taiwan in the near future, exacerbating global semiconductor supply shortages and increasing the risk of economic calamity in the U.S. and other countries.
Strive anticipates that U.S. semiconductor stocks could potentially outperform the market if China were to annex Taiwan. Through SHOC, Strive mandates U.S. semiconductor companies to prepare for this scenario by increasing domestic production capabilities, providing long-term opportunity and potential growth in the industry. At launch, only 12% of the plant, property, and equipment (PPE) of the companies in the Strive U.S. Semiconductor ETF are exposed to China/Taiwan risk.
Vivek Ramaswamy, Strive’s executive chairman and co-founder said, “Our global economy is dependent on access to Taiwanese-produced semiconductors, which may effectively go to zero if China escalates its political and military tactics against Taiwan. We think that U.S. semiconductor stocks offer a potential hedge against this risk, especially if U.S. semiconductor companies prepare themselves to fill the supply vacuum created by a potential blockade or invasion of Taiwan. We plan to deliver that message as a shareholder to these companies, unapologetically and without regard to Chinese business interests: unlike many of our larger competitors, Strive does not and will not operate an asset management business in China.”
About SHOC: The Strive U.S. Semiconductor ETF (SHOC) seeks to track the total return performance, before fees and expenses, of the Solactive United States Semiconductor 30 Capped Index (the “Index”) composed of U.S.-listed equities in the semiconductor sector. The benchmark does not pursue any environmental, social, governance (ESG) objectives. Investors can learn more at www.strivefunds.com/SHOC.
About Strive Asset Management: Strive is an Ohio-based asset management firm whose mission is to restore the voices of everyday citizens in the American economy by leading companies to focus on excellence over politics. Strive will compete directly with the world’s largest asset managers by launching funds that advance “Excellence Capitalism” in boardrooms across corporate America. The company was co-founded by Vivek Ramaswamy and Anson Frericks in 2022. Learn more at www.strive.com.
IMPORTANT INFORMATION
Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call 855-427-7360 or visit our website at www.strivefunds.com. Read the prospectus or summary prospectus carefully before investing.
Investing involves risk, including possible loss of principal. Semiconductor Sector Risk. The semiconductor sector is highly cyclical and periodically experiences significant economic downturns characterized by diminished product demand, resulting in production overcapacity and excess inventory, which can result in rapid erosion of product selling prices. Technology Sector Risk. The Fund will have exposure to companies operating in the technology sector. Technology companies, including information technology companies, may have limited product lines, financial resources and/or personnel. New Fund Risk. The Fund is a recently organized management investment company with limited operating history. As a result, prospective investors have a limited track record or history on which to base their investment decision. There can be no assurance that the Fund will grow to or maintain an economically viable size. Geopolitical/Natural Disaster Risks. The Fund’s investments are subject to geopolitical and natural disaster risks, such as war, terrorism, trade disputes, political or economic dysfunction within some nations, public health crises and related geopolitical events, as well as environmental disasters, epidemics and/or pandemics, which may add to instability in world economies and volatility in markets. The impact may be short-term or may last for extended periods. Non-Diversification Risk. Because the Fund is non-diversified, it may be more sensitive to economic, business, political, or other changes affecting individual issuers or investments than a diversified fund, which may result in greater fluctuation in the value of the Fund’s Shares and greater risk of loss. Passive Investment Risk. The Fund is not actively managed, and the Sub-Adviser will not sell any investments due to current or projected underperformance of the securities.
Strive Asset Management, LLC is the sub-adviser for the Fund, and has been given the responsibility to vote proxies related to the securities held by the Fund, pursuant to its Proxy Voting Policies and Procedures (Proxy Policy). Information about the delegation of voting responsibility and Strive’s Proxy Policy can be found in the Fund’s Statement of Additional Information, here.
Solactive AG ("Solactive") is the licensor of The Solactive United States Semiconductors 30 Capped Index (the "Index"). The financial instruments that are based on the Index are not sponsored, endorsed, promoted or sold by Solactive in any way and Solactive makes no express or implied representation, guarantee or assurance with regard to: (a) the advisability in investing in the financial instruments; (b) the quality, accuracy and/or completeness of the Index; and/or (c) the results obtained or to be obtained by any person or entity from the use of the Index. Solactive reserves the right to change the methods of calculation or publication with respect to the Index. Solactive shall not be liable for any damages suffered or incurred as a result of the use (or inability to use) of the Index.
Holdings are subject to change. SHOC’s current holdings can be found here.
The Strive ETFs are distributed by Quasar Distributors, LLC.
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1 “The Semiconductor Decade: A Trillion-Dollar Industry”, McKinsey 2022
The Strive U.S. Semiconductor ETF (SHOC) is an exchange-traded fund launched by Strive Asset Management, providing exposure to U.S. semiconductor stocks with an expense ratio of 0.40%.
Why was SHOC launched now?
SHOC was launched amid escalating geopolitical risks concerning Taiwan, which could drive demand for U.S. semiconductors.
What is the expected growth in semiconductor demand?
Global semiconductor demand is projected to grow over 80% by 2030.
What are the risks associated with investing in SHOC?
Investing in SHOC carries risks such as geopolitical tensions affecting supply and the cyclical nature of the semiconductor sector.
How does SHOC plan to mitigate risks from Taiwan?
SHOC mandates U.S. semiconductor companies to enhance domestic production capabilities to mitigate risks associated with potential disruptions in Taiwan.
