Designed to provide broad exposure to the Technology ETFs category of the market, the iShares Semiconductor ETF (SOXX) is a smart beta exchange traded fund launched on 07/10/2001.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Blackrock. SOXX has been able to amass assets over $13.39 billion, making it one of the largest ETFs in the Technology ETFs. Before fees and expenses, this particular fund seeks to match the performance of the PHLX SOX Semiconductor Sector Index.
The ICE Semiconductor Index measures the performance of U.S. traded securities of companies engaged in the semiconductor business.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
SOXX's 12-month trailing dividend yield is 0.69%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 100% of the portfolio.
When you look at individual holdings, Advanced Micro Devices Inc (AMD) accounts for about 8.33% of the fund's total assets, followed by Nvidia Corp (NVDA) and Broadcom Inc (AVGO).
Its top 10 holdings account for approximately 57.85% of SOXX's total assets under management.
Performance and Risk
The ETF return is roughly 11.73% and was up about 2.68% so far this year and in the past one year (as of 08/01/2025), respectively. SOXX has traded between $154.86 and $247.95 during this last 52-week period.
The fund has a beta of 1.46 and standard deviation of 35.68% for the trailing three-year period, which makes SOXX a high risk choice in this particular space. With about 35 holdings, it has more concentrated exposure than peers .
Alternatives
iShares Semiconductor ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
SPDR S&P Semiconductor ETF (XSD) tracks S&P Semiconductor Select Industry Index and the VanEck Semiconductor ETF (SMH) tracks MVIS US Listed Semiconductor 25 Index. SPDR S&P Semiconductor ETF has $1.29 billion in assets, VanEck Semiconductor ETF has $26.69 billion. XSD has an expense ratio of 0.35% and SMH changes 0.35%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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iShares Semiconductor ETF (SOXX): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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