A smart beta exchange traded fund, the iShares Semiconductor ETF (SOXX) debuted on 07/10/2001, and offers broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Blackrock, SOXX has amassed assets over $20 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.34%.
It has a 12-month trailing dividend yield of 0.52%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For SOXX, it has heaviest allocation in the Information Technology sector --about 100% of the portfolio.
Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 7.89% of total assets, followed by Advanced Micro Devices Inc (AMD) and Micron Technology Inc (MU).
Its top 10 holdings account for approximately 56.23% of SOXX's total assets under management.
Performance and Risk
The ETF has added roughly 9.71% and is up about 53.47% so far this year and in the past one year (as of 02/05/2026), respectively. SOXX has traded between $154.86 and $361.13 during this last 52-week period.
SOXX has a beta of 1.53 and standard deviation of 33.97% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 34 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.
State Street 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. State Street SPDR S&P Semiconductor ETF has $1.73 billion in assets, VanEck Semiconductor ETF has $42.04 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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