Launched on 06/11/2021, the Invesco PHLX Semiconductor ETF (SOXQ) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Semiconductors segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 3, placing it in top 19%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $459.68 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Semiconductors segment of the equity market. SOXQ seeks to match the performance of the PHLX SEMICONDUCTOR SECTOR INDEX before fees and expenses.
The PHLX Semiconductor Sector Index measures the performance of the 30 largest U.S.-listed 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 0.19%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.69%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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.
Looking at individual holdings, Broadcom Inc (AVGO) accounts for about 13.56% of total assets, followed by Nvidia Corp (NVDA) and Advanced Micro Devices Inc (AMD).
The top 10 holdings account for about 61.20% of total assets under management.
Performance and Risk
So far this year, SOXQ has lost about -1.17%, and is up about 14.25% in the last one year (as of 02/04/2025). During this past 52-week period, the fund has traded between $33.89 and $46.54.
The ETF has a beta of 1.49 and standard deviation of 35.84% for the trailing three-year period. With about 30 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco PHLX Semiconductor ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SOXQ is an excellent option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that 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 $13.29 billion in assets, VanEck Semiconductor ETF has $22.68 billion. SOXX has an expense ratio of 0.35% and SMH charges 0.35%.
Bottom Line
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Invesco PHLX Semiconductor ETF (SOXQ): ETF Research Reports
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Broadcom Inc. (AVGO) : Free Stock Analysis Report
VanEck Semiconductor ETF (SMH): ETF Research Reports
iShares Semiconductor ETF (SOXX): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
