Designed to provide broad exposure to the Technology - Semiconductors segment of the equity market, the iShares Semiconductor ETF (SOXX) is a passively managed exchange traded fund launched on 07/10/2001.

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.

Sector ETFs are also funds of convenience, offering many 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 4, placing it in top 25%.

Index Details

The fund is sponsored by Blackrock. It has amassed assets over $14.92 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

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.

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 0.63%.

Sector Exposure and Top Holdings

ETFs offer a 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.

This ETF has heaviest allocation in the Information Technology sector--about 100% of the portfolio.

Looking at individual holdings, Broadcom Inc (AVGO) accounts for about 10.09% of total assets, followed by Nvidia Corp (NVDA) and Advanced Micro Devices Inc (AMD).

The top 10 holdings account for about 59.60% of total assets under management.

Performance and Risk

So far this year, SOXX has gained about 20.90%, and it's up approximately 47.68% in the last one year (as of 10/07/2024). During this past 52-week period, the fund has traded between $146.13 and $265.49.

The ETF has a beta of 1.32 and standard deviation of 35.76% 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.