Making its debut on 07/10/2001, smart beta exchange traded fund iShares Semiconductor ETF (SOXX) provides investors 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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
SOXX is managed by Blackrock, and this fund has amassed over $40.72 billion, which makes it one of the largest ETFs in the Technology ETFs. 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
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 SOXX are 0.34%, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.28%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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, Advanced Micro Devices Inc (AMD) accounts for about 8.56% of total assets, followed by Micron Technology Inc (MU) and Nvidia Corp (NVDA).
The top 10 holdings account for about 60.31% of total assets under management.
Performance and Risk
The ETF has gained about 73.61% so far this year and is up about 114.91% in the last one year (as of 08/21/2026). In the past 52-week period, it has traded between $241.68 and $655.01
The ETF has a beta of 1.80 and standard deviation of 38.76% 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 $2.95 billion in assets, VanEck Semiconductor ETF has $67.74 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
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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iShares Semiconductor ETF (SOXX): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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