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Should You Invest in the iShares Semiconductor ETF (SOXX)?
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The iShares Semiconductor ETF (SOXX - Free Report) was launched on 07/10/2001, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Semiconductors segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Semiconductors is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $7.42 billion, making it one of the largest ETFs attempting to match the performance of the Technology - Semiconductors segment of the equity market. 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.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.02%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 100% of the portfolio.
Looking at individual holdings, Broadcom Inc (AVGO - Free Report) accounts for about 8.92% of total assets, followed by Texas Instrument Inc (TXN - Free Report) and Nvidia Corp (NVDA - Free Report) .
The top 10 holdings account for about 49.12% of total assets under management.
Performance and Risk
The ETF has added about 23.55% so far this year and is down about -8.42% in the last one year (as of 03/21/2023). In that past 52-week period, it has traded between $298.68 and $500.30.
The ETF has a beta of 1.33 and standard deviation of 36.89% for the trailing three-year period, making it a high risk choice in the space. With about 35 holdings, it has more concentrated exposure than peers.
Alternatives
IShares Semiconductor ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, SOXX is a sufficient option for those seeking exposure to the Technology ETFs area of the market. Investors might also want to consider some other ETF options in the space.
SPDR S&P Semiconductor ETF (XSD - Free Report) tracks S&P Semiconductor Select Industry Index and the VanEck Semiconductor ETF (SMH - Free Report) tracks MVIS US Listed Semiconductor 25 Index. SPDR S&P Semiconductor ETF has $1.45 billion in assets, VanEck Semiconductor ETF has $7.54 billion. XSD has an expense ratio of 0.35% and SMH charges 0.35%.
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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Should You Invest in the iShares Semiconductor ETF (SOXX)?
The iShares Semiconductor ETF (SOXX - Free Report) was launched on 07/10/2001, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Semiconductors segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Semiconductors is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $7.42 billion, making it one of the largest ETFs attempting to match the performance of the Technology - Semiconductors segment of the equity market. 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.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.02%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 100% of the portfolio.
Looking at individual holdings, Broadcom Inc (AVGO - Free Report) accounts for about 8.92% of total assets, followed by Texas Instrument Inc (TXN - Free Report) and Nvidia Corp (NVDA - Free Report) .
The top 10 holdings account for about 49.12% of total assets under management.
Performance and Risk
The ETF has added about 23.55% so far this year and is down about -8.42% in the last one year (as of 03/21/2023). In that past 52-week period, it has traded between $298.68 and $500.30.
The ETF has a beta of 1.33 and standard deviation of 36.89% for the trailing three-year period, making it a high risk choice in the space. With about 35 holdings, it has more concentrated exposure than peers.
Alternatives
IShares Semiconductor ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, SOXX is a sufficient option for those seeking exposure to the Technology ETFs area of the market. Investors might also want to consider some other ETF options in the space.
SPDR S&P Semiconductor ETF (XSD - Free Report) tracks S&P Semiconductor Select Industry Index and the VanEck Semiconductor ETF (SMH - Free Report) tracks MVIS US Listed Semiconductor 25 Index. SPDR S&P Semiconductor ETF has $1.45 billion in assets, VanEck Semiconductor ETF has $7.54 billion. XSD has an expense ratio of 0.35% and SMH charges 0.35%.
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.