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5. Vanguard Total Intl Stock Idx Fund (NASDAQ:VXUS)
Vanguard Total Intl Stock Idx Fund (NASDAQ:VXUS) aims to track the performance of the FTSE Global All Cap ex US Index, which replicates the investment return of companies located outside the United States. Via a passively managed, index replication approach, the fund offers international exposure to emerging and developed markets. Majority of the companies held by Vanguard Total Intl Stock Idx Fund (NASDAQ:VXUS) belong to emerging markets, Europe, and Pacific. The fund invests in 7,881 stocks and as of April 30, the total net assets are $363.5 billion.
The largest holding in Vanguard Total Intl Stock Idx Fund (NASDAQ:VXUS)’s portfolio is Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), a provider of integrated circuits, chips, and related semiconductor devices.
On April 4, Morgan Stanley analyst Charlie Chan categorized Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) as a “catalyst driven idea” as he expects its Q2 guidance to exceed present Street consensus despite inventory correction concerns in the sector. He reiterated an Overweight rating and a NT$780 price target on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) heading into the company’s Q1 results on April 14, which came in above market estimates.
According to Insider Monkey’s Q1 data, 81 hedge funds were bullish on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), up from 72 funds in the earlier quarter. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital held a prominent position in the company, comprising over 9 million shares worth $945 million.
Here is what Wedgewood Partners has to say about Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q1 2022 investor letter:
“Taiwan Semiconductor pulled back on geopolitical concerns and periodic market fears about the end of the “cycle” in semiconductors. First, we think the Company might be one of the most – if not the most – important Companies in the world. Taiwan Semiconductor has a near-monopoly on semiconductor processing at advanced nodes, which makes it irreplaceable to customers such as Apple, AMD, NVIDIA, Mediatek, Amazon, and even Intel. Second, much less important manufacturers have more direct geopolitical risk than Taiwan Semiconductor, yet they trade at substantial premiums – both multiple and market cap. For example, Tesla is a heavy manufacturer of only about 1 million automobiles with significant production capacity located in the heart of China, yet it trades at double the market cap of Taiwan Semiconductor. Third, while it is hard to know when the current semiconductor “cycle” will slow or end, we see very few signs of it, as Taiwan Semiconductor continues to generate bookings well in excess of its current capacity – unlike any previous cycle. Taiwan Semiconductor traded to levels that are much too pessimistic given its competitive positioning and opportunity for growth driven by a more robust semiconductor cycle, driven by high-performance computing. As such, we added to our position during the quarter.”
