We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is iShares Semiconductor ETF (SOXX) a Strong ETF Right Now?
Read MoreHide Full Article
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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
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
Because the fund has amassed over $13.42 billion, this makes it one of the largest ETFs in the Technology ETFs. SOXX is managed by Blackrock. This particular fund, 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
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.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.35%.
The fund has a 12-month trailing dividend yield of 0.68%.
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.
Representing 100% of the portfolio, the fund has heaviest allocation to the Information Technology sector.
Taking into account individual holdings, Nvidia Corp (NVDA - Free Report) accounts for about 9.74% of the fund's total assets, followed by Broadcom Inc (AVGO - Free Report) and Advanced Micro Devices Inc (AMD - Free Report) .
Its top 10 holdings account for approximately 60.77% of SOXX's total assets under management.
Performance and Risk
The ETF has added roughly 12.19% so far this year and is up about 25.57% in the last one year (as of 11/20/2024). In the past 52-week period, it has traded between $168.08 and $265.49.
The fund has a beta of 1.33 and standard deviation of 35.99% 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.
First Trust NASDAQ Semiconductor ETF (FTXL - Free Report) tracks Nasdaq US Smart Semiconductor Index and the VanEck Semiconductor ETF (SMH - Free Report) tracks MVIS US Listed Semiconductor 25 Index. First Trust NASDAQ Semiconductor ETF has $1.33 billion in assets, VanEck Semiconductor ETF has $23.88 billion. FTXL has an expense ratio of 0.60% 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
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
Because the fund has amassed over $13.42 billion, this makes it one of the largest ETFs in the Technology ETFs. SOXX is managed by Blackrock. This particular fund, 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
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.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.35%.
The fund has a 12-month trailing dividend yield of 0.68%.
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.
Representing 100% of the portfolio, the fund has heaviest allocation to the Information Technology sector.
Taking into account individual holdings, Nvidia Corp (NVDA - Free Report) accounts for about 9.74% of the fund's total assets, followed by Broadcom Inc (AVGO - Free Report) and Advanced Micro Devices Inc (AMD - Free Report) .
Its top 10 holdings account for approximately 60.77% of SOXX's total assets under management.
Performance and Risk
The ETF has added roughly 12.19% so far this year and is up about 25.57% in the last one year (as of 11/20/2024). In the past 52-week period, it has traded between $168.08 and $265.49.
The fund has a beta of 1.33 and standard deviation of 35.99% 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.
First Trust NASDAQ Semiconductor ETF (FTXL - Free Report) tracks Nasdaq US Smart Semiconductor Index and the VanEck Semiconductor ETF (SMH - Free Report) tracks MVIS US Listed Semiconductor 25 Index. First Trust NASDAQ Semiconductor ETF has $1.33 billion in assets, VanEck Semiconductor ETF has $23.88 billion. FTXL has an expense ratio of 0.60% 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.