Table of Сontents
- What Are Semiconductor ETFs & How Do They Work?
- Prices & Benchmark
- Evaluating Semiconductor ETFs
- 5 Best Semiconductor ETFs by Market Performance
- Bottom Line
- FAQs
What Are Semiconductor ETFs & How Do They Work?
An exchange-traded fund called a semiconductor ETF makes investments in a collection of equities from businesses that manufacture and sell semiconductors. The performance of an index of semiconductor equities may be actively tracked by semiconductor ETFs, or they may choose to monitor it passively.
An exchange-traded fund, or ETF, is a type of financial vehicle that combines some of the qualities of mutual funds and equities. ETFs trade continuously on an exchange, much like stocks do. ETFs frequently aim to replicate the performance of a benchmark index, such the S&P 500, similar to passively-managed mutual funds.
There are ten ETFs available that are solely devoted to equities in the semiconductor industry. Products like memory chips, integrated circuits, microprocessors, and associated machinery are examples of semiconductors. Semiconductors are a crucial part of many electrical devices.
Prices & Benchmark
Our top semiconductor ETFs are listed in ascending order according to the trailing 1-year performance through January 31, 2022. Investors would be advised to consider long-term performance along with fees, objectives, holdings, and any relevant ratings when evaluating ETFs.
Investors may assess the top semiconductor ETFs using the following criteria:
- Performance: The performance of our list of semiconductor ETFs is assessed mostly based on a 1-year return. ETFs with initiation dates of less than a year ago were thus disregarded. Before selecting an ETF for their portfolio, investors would be advised to conduct additional research over longer time frames, such as 3-, 5-, and 10-year returns.
- Expenses: Low expenditures, as determined by the expense ratio of the fund, can be a crucial criterion for ETFs. This is because the ETF with the lowest expense ratio will often beat those with higher expenditures when they track the same or a related index.
- Structure: In a contrast to closed-end funds, or CEFs, the majority of ETFs are open-end funds. A grantor trust, a limited partnership, or an ETN are all examples of ETF structures. ETNs are not on our list of ETFs.
- Objective: For our ranking, we only took into account ETFs that hold semiconductor equities primarily. Both actively and passively managed funds were welcome to look for the best semiconductor ETFs. Alternative goals and tactics, such as leveraged and inverse ETFs, weren’t taken into consideration for this list.
- Portfolio holdings: Semiconductor ETFs frequently contain shares of businesses that develop, produce, and sell semiconductors, sometimes referred to as semis or chips. Companies involved in semiconductor equipment may also be included in the holdings of chip stock ETFs.
- Quant Ratings and Factor Grades: The Quant Ratings and Factor Grades provided by Seeking Alpha can be used to assess individual stocks or ETFs. We discuss “Factor Grades” in this article, which includes letter grades to five different “factors”: momentum, expenses, dividends, risk, and asset flows. Seeking Alpha does this by contrasting the pertinent parameters for the factor with the comparable metrics for the other ETFs in the same asset class. The factor grades range from an A+ to an F on the lowest scale.
5 Best Semiconductor ETFs by Market Performance
ETF | 1-Year Performance |
iShares Semiconductor ETF | 23.42% |
VanEck Vectors Semiconductor ETF | 22.13% |
Invesco Dynamic Semiconductors ETF | 20.58% |
First Trust Nasdaq Semiconductor ETF | 15.79% |
SPDR S&P Semiconductor ETF | 14.12% |
1. iShares Semiconductor ETF
An exchange-traded fund called iShares Semiconductor ETF (SOXX) aims to replicate the investment performance of an index made up of U.S.-listed semiconductor-related stocks. As of February 7, 2022, SOXX was the market’s biggest semiconductor ETF, with $8.6 billion in assets.
- As of date: January 31, 2022
- 1-year Performance (price): 23.42%
- Expense Ratio: 0.43%, or $43 annually for every $10,000 invested
- 30-Day SEC Yield: 0.69
- Average Daily Volume: 2,353,347
For the 1-year return, the performance of the iShares Semiconductor ETF was somewhat worse than that of its index, which is to be anticipated from a product that passively tracks its benchmark. Through January 31, 2022, the SOXX ETF barely edged out the S&P 500 for the 1-year return, but it dramatically exceeded the S&P for the 3-, 5-, and 10-year returns.
As of January 31, 2022, $10,000 invested in the SOXX ETF one year, three years, five years, and ten years ago would be worth:
- 1 year ago: $12,241
- 3 years ago: $29,291
- 5 years ago: $39,277
- 10 years ago: $84,180
SOXX Structure, Objective, and Holdings
- Inception Date: 07/10/2001
- Issuer: Van Eck Associates Corporation
- Ticker: SOXX
- Primary Exchange: Nasdaq
- Structure: Open-End Investment Company
- Objective: Seeks to track the investment results of an index composed of U.S.-listed equities in the semiconductor sector.
SOXX ETF Top 10 Holdings, as of February 2022
- Broadcom Inc (AVGO)
- Qualcomm Inc (QCOM)
- Nvidia Corp (NVDA)
- Intel Corporation Corp (INTC)
- Advanced Micro Devices Inc (AMD)
- Marvell Technology Inc (MRVL)
- Taiwan Semiconductor Manufacturing (TSM)
- Micron Technology Inc (MU)
- Applied Material Inc (AMAT)
- Kla Corp (KLAC)
2. VanEck Vectors Semiconductor ETF
The iShares Semiconductor ETF performed somewhat lower than its index for the 1-year return, which is to be expected from a product that passively tracks its benchmark. The SOXX ETF slightly edged out the S&P 500 until January 31, 2022, but it significantly outperformed the S&P for the 3-, 5-, and 10-year returns.
$10,000 invested in the SOXX ETF on January 31, 2022, one year, three years, five years, and ten years prior would be worth:
- As of date: January 31, 2022
- 1-year Performance (price): 22.13%
- Expense Ratio: 0.35%, or $35 annually for every $10,000 invested
- 30-Day SEC Yield: 0.63
- Average Daily Volume: 5,061,740
For the 1-year return, the VanEck Vectors Semiconductor ETF did marginally worse than its index, which is reasonable for a product that passively tracks its benchmark. Through January 31, 2022, SMH also fared somewhat worse than the S&P 500 for the 1-year return, but much better than the index for the 3-, 5-, and 10-year returns.
As of January 31, 2022, $10,000 invested in the SMH ETF one year, three years, five years, and ten years ago would be worth:
- 1 year ago: $12,213
- 3 years ago: $29,291
- 5 years ago: $39,277
- 10 years ago: $84,180
SMH Structure, Objective, and Holdings
- Inception Date: 12/20/2011
- Issuer: Van Eck Associates Corporation
- Ticker: SMH
- Primary Exchange: Nasdaq
- Structure: Open-End Investment Company
- Objective: Seeks to replicate as closely as possible the performance of the MVIS US Listed Semiconductor 25 Index.
SMH ETF Top 10 Holdings, as of January 31, 2022
- Taiwan Semiconductor Manufacturing Co L (TSM)
- Nvidia Corp (NVDA)
- Broadcom Inc (AVGO)
- Qualcomm Inc (QCOM)
- Intel Corp (INTC)
- Texas Instruments Inc (TXN)
- Micron Technology Inc (MU)
- Asml Holding NvAnalog Devices Inc (ASML)
- Analog devises Inc (ADI)
- Applied Materials Inc (AMAT)
VanEck Vectors Semiconductor ETF Seeking Alpha Quant Ratings
Momentum | Expenses | Dividends | Risk | Asset Flows |
A+ | B+ | C+ | D+ | A+ |
3. Invesco Dynamic Semiconductors ETF
A passively managed exchange-traded fund, Invesco Dynamic Semiconductors ETF (PSI), is based on the Dynamic Semiconductor Intellidex Index. The PSI ETF will typically invest at least 90% of its entire assets in the 30 semiconductor stock common equities that make up the Index.
- As of date: January 31, 2022
- 1-year Performance (price): 20.58%
- Expense Ratio: 0.56%, or $56 annually for every $10,000 invested
- 30-Day SEC Yield: 0.35
- Average Daily Volume: 85,651
A fund that passively tracks its benchmark should have slightly lagged its index for the 1-year return, which is what the Invesco Dynamic Semiconductors ETF did. Through January 31, 2022, PSI also underperformed the S&P 500 for the 1-year return, but it dramatically exceeded the S&P 500 in the 3-, 5-, and 10-year returns.
As of January 31, 2022, an investment of $10,000 in GTO made one year, three years, five years, and ten years ago would be worth:
- 1 year ago: $12,058
- 3 years ago: $26,833
- 5 years ago: $35,475
- 10 years ago: $91,067
PSI Structure, Objective, and Holdings
- Inception Date: 06/23/2005
- Issuer: Invesco Capital Management LLC
- Ticker: PSI
- Primary Exchange: NYSE Arca
- Structure: Open-End Investment Company
- Objective: PSI will normally invest at least 90% of its total assets in common stocks that comprise the Dynamic Intellidex Index, which normally consists of 30 semiconductor stocks to provide capital appreciation.
PSI ETF Top 10 Holdings, as of January 31, 2022
- Broadcom Inc (AVGO)
- Intel Corp (INTC)
- Qualcomm Inc (QCOM)
- Applied Materials Inc (AMAT)
- Texas Instruments Inc (TXN)
- Analog devises Inc (ADI)
- Advanced Micro Devices, Inc (AMD)
- Nvidia Corp (NVDA)
- Axcelis Technologies Inc (ACLS)
- ON Semiconductor Corporation (ON)
4. First Trust Nasdaq Semiconductor ETF
The Nasdaq US Smart Semiconductor Index, which consists of 30 semiconductor firms, is replicated by the First Trust Nasdaq Semiconductor ETF (FTXL), a passively managed exchange-traded fund, in order to provide performance outcomes that are 95% linked to those of the Index.
- As of date: January 31, 2022
- 1-year Performance (price): 15.79%
- Expense Ratio: 0.60%, or $60 annually for every $10,000 invested
- 30-Day SEC Yield: 0.44
- Average Daily Volume: 17,244
Being a passively managed vehicle, First Trust Nasdaq Semiconductor ETF performs closely behind its benchmark. For the 1-year return, FTXL fared worse than the S&P 500, but for the 3-, 5-, and 10-year returns through January 31, 2022, it dramatically outperformed the index.
As of January 31, 2022, $10,000 invested in GTO one year, three years ago, and five years ago would be worth the following:
- 1 year ago: $11,579
- 3 years ago: $24,402
- 5 years ago: $30,566
FTXL Structure, Objective, and Holdings
- Inception Date: 09/20/2016
- Issuer: First Trust Advisors L.P.
- Ticker: FTXL
- Primary Exchange: Nasdaq
- Structure: Open-End Investment Company
- Objective: Seeks to replicate as closely as possible the performance of the MVIS US Listed Semiconductor 25 Index.
FTXL ETF Top 10 Holdings, as of January 31, 2022
- Broadcom Inc (AVGO)
- Qualcomm Inc (QCOM)
- Intel Corp (INTC)
- Texas Instruments Inc (TXN)
- Synaptics Incorporated (SYNA)
- ON Semiconductor Corporation (ON)
- Micron Technology Inc (MU)
- Analog devises Inc (ADI)
- Advanced Micro Devices, Inc (AMD)
- Nvidia Corp (NVDA)
First Trust Nasdaq Semiconductor ETF Seeking Alpha Quant Ratings5. SPDR S&P Semiconductor ETF
First Trust Nasdaq Semiconductor ETF performs somewhat better than its benchmark despite being a passively managed instrument. FTXL performed lower than the S&P 500 for the 1-year return, but it significantly beat the index for the 3-, 5-, and 10-year returns through January 31, 2022.
$10,000 put in GTO last year, three years ago, and five years ago would be worth the following on January31, 2022:
- As of date: January 31, 2022
- 1-year Performance (price): 14.12%
- Expense Ratio: 0.35%, or $35 annually for every $10,000 invested
- 30-Day SEC Yield: 0.16
- Average Daily Volume: 252,282
For the 1-year return, the SPDR S&P Semiconductor ETF fared marginally worse than its index, which is reasonable for a product that passively tracks its benchmark. Through January 31, 2022, XSD greatly beat the S&P 500 in the 3-, 5-, and 10-year returns while doing far worse than the index for the 1-year return.
As of January 31, 2022, $10,000 invested in XSD one year, three years, five years, and ten years ago would be worth:
- 1 year ago: $11,412
- 3 years ago: $28,863
- 5 years ago: $36,576
- 10 years ago: $86,920
XSD Structure, Objective, and Holdings
- Inception Date: 12/20/2011
- Issuer: SSGA Funds Management
- Ticker: XSD
- Primary Exchange: NYSE Arca
- Structure: Open-End Investment Company
- Objective: Seeks to provide investment results that correspond generally to the total return performance of the S&P Semiconductor Select Industry Index.
XSD ETF Top 10 Holdings, as of January 31, 2022
- Xilinx Inc (XLNX)
- Micron Technology Inc (MU)
- ON Semiconductor Corporation (ON)
- Power Integrations, Inc (POWI)
- Qualcomm Inc (QCOM)
- Intel Corp (INTC)
- Broadcom Inc (AVGO)
- Universal Display Corporation (OLED)
- Advanced Micro Devices (AMD)
- Cirrus Logic Inc (CRUS)
Bottom Line
Investors may gain wide exposure to the semiconductor sector, which includes businesses engaged in the manufacture and sale of memory chips, integrated circuits, and microprocessors, by using semiconductor ETFs. Although semiconductor companies have recently delivered above-average returns, market risk can be higher than it is for a broad market index like the S&P 500.
