The Invesco Semiconductors ETF (PSI) made its debut on 06/23/2005, and is a smart beta exchange traded fund that provides broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
Managed by Invesco, PSI has amassed assets over $2.47 billion, making it one of the larger ETFs in the Technology ETFs. PSI, before fees and expenses, seeks to match the performance of the Dynamic Semiconductor Intellidex Index.
The Dynamic Semiconductor Intellidex Index is comprised of stocks of semiconductor companies. The Index is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.56%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.03%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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.
When you look at individual holdings, Applied Materials Inc (AMAT) accounts for about 6.89% of the fund's total assets, followed by Kla Corp (KLAC) and Advanced Micro Devices Inc (AMD).
PSI's top 10 holdings account for about 47.77% of its total assets under management.
Performance and Risk
The ETF return is roughly 76.17% so far this year and it's up approximately 130.03% in the last one year (as of 08/24/2026). In the past 52-week period, it has traded between $61.52 and $187.82
PSI has a beta of 1.79 and standard deviation of 42.38% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 33 holdings, it has more concentrated exposure than peers .
Alternatives
Invesco Semiconductors 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.
iShares Semiconductor ETF (SOXX) tracks PHLX SOX Semiconductor Sector Index and the VanEck Semiconductor ETF (SMH) tracks MVIS US Listed Semiconductor 25 Index. iShares Semiconductor ETF has $42.05 billion in assets, VanEck Semiconductor ETF has $66.4 billion. SOXX has an expense ratio of 0.34% 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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Invesco Semiconductors ETF (PSI): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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