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?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Blackrock, SOXX has amassed assets over $39.75 billion, making it one of the largest ETFs in the Technology ETFs. SOXX seeks to match the performance of the PHLX SOX Semiconductor Sector Index before fees and expenses.
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.
Operating expenses on an annual basis are 0.33% for this ETF, which makes it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.26%.
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, Intel Corporation (INTC) accounts for about 9.59% of total assets, followed by Advanced Micro Devices (AMD) and Micron Technology (MU).
SOXX's top 10 holdings account for about 61.17% of its total assets under management.
Performance and Risk
Year-to-date, the iShares Semiconductor ETF has gained about 58.23% so far, and is up roughly 67.86% over the last 12 months (as of 10/23/2026). SOXX has traded between $268.10 $655.01 in this past 52-week period.
The ETF has a beta of 1.80 and standard deviation of 39.43% for the trailing three-year period, making it 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.
Invesco PHLX Semiconductor ETF (SOXQ) tracks PHLX SEMICONDUCTOR SECTOR INDEX and the VanEck Semiconductor ETF (SMH) tracks MVIS US Listed Semiconductor 25 Index. Invesco PHLX Semiconductor ETF has $2.72 billion in assets, VanEck Semiconductor ETF has $63.65 billion. SOXQ has an expense ratio of 0.19% 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
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iShares Semiconductor ETF (SOXX): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).