Semiconductor weight falls 13 points in the momentum rebalance that dropped Nvidia and Broadcom

Momentum, as this index defines it, is a 12-month score blending share-price trend and volatility, and the fund applies no caps to sector weightings, so a name arrives at whatever size the ranking gives it ^[2][13]. Nvidia and Broadcom stopped ranking inside that top 100 ^[5]. Because the measure carries a volatility term alongside the price term, an exit does not by itself mean a share price fell ^[8].

Inside information technology the two subsector moves almost cancel. Semiconductors and semiconductor equipment lost 13.00 percentage points of weight; technology hardware gained 12.10 ^[9]. That nets to 0.90 points of decline against a sector that fell 0.92, which leaves 0.02 points for everything else in IT ^[2][3]. The newly included names include Dell Technologies, Marvell Technology and Lumentum ^[6].

The fund still owns chips. Intel and AMD at 4.89% each come to 9.78%, or 0.55 points more than Apple's leading weight ^[6][4], and Micron, cut by 1.99 points, still sits at 8.95% ^[7][6]. Apple and Micron together are 18.18% of the portfolio ^[5].

Outside technology, health care rose 3.55 percentage points and energy 2.35 ^[10]. Health care holdings went to 12 from seven with Merck and UnitedHealth among the entrants, and Valero Energy and Marathon Petroleum came in on the energy side ^[11]. Forty-five of the previous 99 names survived ^[1].

Lee Kyung-jun, head of the ETF management division at Kiwoom Asset Management, said: "The heavy IT weighting was maintained, but the semiconductor weighting fell while technology hardware, health care and energy expanded, showing a clear shift in the leadership of the U.S. stock market." He added: "With more than half of the holdings replaced, the changes in market trends over the past six months have been reflected in the portfolio on a large scale." ^[14][15]

In my view the September list describes the previous year's prices and does not forecast the next one. The rule adds names with recent strong price momentum and removes those whose momentum has weakened ^[12]. That instruction looks backwards and it executes on a fixed date.

The counter-argument sits in the volatility term. If Nvidia and Broadcom fell out because their daily moves widened rather than because their prices lagged, the same 54 substitutions support a duller reading, and the rebalancing announcement did not include the scores that would separate the two.