GS | "Extreme Dip Buying in Chip and Semis"
The July tech rout has exposed deep structural resilience in the ETF ecosystem, with allocators aggressively buying the semiconductor dip. Goldman Sachs FICC & Equities notes that participants are absorbing heavy price damage to maintain elevated long exposure to AI.
RECORD SEMICONDUCTOR DEMAND
- The SOX index dropped 21% for its worst month in two decades, yet semiconductor ETFs are seeing unprecedented inflows.
- SMH and SOXX will absorb a combined $13 billion this month, marking their strongest inflow period since SMH inception.
- AI-related funds (SMH, SOXX, SOXL, XLK, DRAM, EWY) now account for 19% of total US ETF trading volume across a 5,500 fund universe.
LEVERAGE RATIOS HOLD FIRM
- Levered and inverse ETF AUM sits at $150 billion, shedding $60 billion since June highs strictly due to price depreciation.
- Investors added another $6 billion into the levered suite in July, defending the long bias with an asset-weighted leverage ratio holding at 2.1x.
- Levered ETFs are turning over $43 billion per session (25% of average AUM daily).
ETF PIPELINE SIGNALS SPECULATION
- The US ETF market is annualizing $2.1 trillion in inflows, pacing 50% above previous records.
- Of new ETFs listed year to date, 54% use derivatives and 33% are classified as levered or inverse.
Flow data indicates zero capitulation. Positioning remains heavily skewed toward a tech rebound, leaving the complex highly sensitive to further downside beta.
Source: Goldman Sachs Global FICC & Equities | Finvaulta... Show More
Not investment advice. The author may have financial interests in the mentioned instruments.
Seeing SMH and SOXX pull in $13 billion this month makes it easier to stay focused on steady positioning rather than getting caught up in sharp swings.... Show More
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Sun Sep 13 2026 00:04:26 GMT+0000 (Coordinated Universal Time)
