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Is iShares Semiconductor ETF (SOXX) a Strong ETF Right Now?
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The iShares Semiconductor ETF (SOXX - Free Report) was launched on 07/10/2001, and is a smart beta exchange traded fund designed to offer broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option 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.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Blackrock, and has been able to amass over $9.93 billion, which makes it one of the largest ETFs in the Technology ETFs. SOXX, before fees and expenses, 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.
Operating expenses on an annual basis are 0.35% for SOXX, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.81%.
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.
Representing 100% of the portfolio, the fund has heaviest allocation to the Information Technology sector.
Taking into account individual holdings, Advanced Micro Devices Inc (AMD - Free Report) accounts for about 9.48% of the fund's total assets, followed by Broadcom Inc (AVGO - Free Report) and Intel Corporation Corp (INTC - Free Report) .
SOXX's top 10 holdings account for about 59.63% of its total assets under management.
Performance and Risk
So far this year, SOXX has lost about -2.88%, and was up about 55.09% in the last one year (as of 01/09/2024). During this past 52-week period, the fund has traded between $373.83 and $581.45.
The ETF has a beta of 1.37 and standard deviation of 34.63% 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 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 - 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 $1.42 billion in assets, VanEck Semiconductor ETF has $11.67 billion. XSD has an expense ratio of 0.35% and SMH charges 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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Is iShares Semiconductor ETF (SOXX) a Strong ETF Right Now?
The iShares Semiconductor ETF (SOXX - Free Report) was launched on 07/10/2001, and is a smart beta exchange traded fund designed to offer broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option 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.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Blackrock, and has been able to amass over $9.93 billion, which makes it one of the largest ETFs in the Technology ETFs. SOXX, before fees and expenses, 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.
Operating expenses on an annual basis are 0.35% for SOXX, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.81%.
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.
Representing 100% of the portfolio, the fund has heaviest allocation to the Information Technology sector.
Taking into account individual holdings, Advanced Micro Devices Inc (AMD - Free Report) accounts for about 9.48% of the fund's total assets, followed by Broadcom Inc (AVGO - Free Report) and Intel Corporation Corp (INTC - Free Report) .
SOXX's top 10 holdings account for about 59.63% of its total assets under management.
Performance and Risk
So far this year, SOXX has lost about -2.88%, and was up about 55.09% in the last one year (as of 01/09/2024). During this past 52-week period, the fund has traded between $373.83 and $581.45.
The ETF has a beta of 1.37 and standard deviation of 34.63% 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 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 - 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 $1.42 billion in assets, VanEck Semiconductor ETF has $11.67 billion. XSD has an expense ratio of 0.35% and SMH charges 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.