SMH VS SOXX - Which ETF Is Better?
Ever wondered about a world where tiny chips power everything from your phone to your car? Well, that's the world that both SMH and SOXX live in. These funds are invested in companies that make semiconductors, the tiny chips that are the brains behind most electronic devices. Want to know which one could make a smart addition to your investment portfolio? Keep reading!
SMH - VanEck Semiconductor ETF
Goal: SMH aims to closely track the performance of companies involved in the production of semiconductors and semiconductor equipment.
Number of Stocks held: 25
Dividend Yield: 1.65%
Annual Expense Fee: 0.35%
Benefits of SMH: With a focus on semiconductor companies, SMH offers exposure to an industry that's central to technological innovation across a few different countries. By holding a relatively small number of stocks, SMH can offer a concentrated exposure to the semiconductor industry.
Downsides of SMH: On the flip side, because SMH holds a smaller number of stocks, it may be more exposed to the performance of individual companies. If one of the companies in SMH's portfolio has a bad year, it could impact the fund's overall performance.
The Top 10 Stocks Held In $SMH:
Source: VanEck
SOXX - iShares Semiconductor ETF
Goal: The goal of SOXX is to track the investment results of an index composed of U.S. stocks in the semiconductor sector.
Number of Stocks held: 30
Dividend Yield: 1.03%
Annual Expense Fee: 0.35%
Benefits of SOXX: SOXX provides exposure to more companies in the semiconductor industry than SMH, which can help spread out risk. If one company has a bad year, it's less likely to significantly impact the overall performance of the fund.
Downsides of SOXX: While SOXX does provide more diversified exposure to the semiconductor industry, it also means investors might not benefit as much if one particular company has an outstanding year. It is also only exposed to semiconductors in the United States.
The Top 10 Stocks Held In $SOXX:
Source: iShares
Final Thoughts: SMH VS SOXX
If you're looking for an investment that could add some tech exposure to your portfolio, both SMH and SOXX could be good options. They both focus on the semiconductor industry, a key sector in the technology world.
The main difference between the two funds is the number of stocks they hold. SMH is more focused, with 25 stocks, while SOXX spreads its bets a bit wider with 30 stocks.
As for performance, over the past year, SMH has had a slightly higher return at 21.03%, compared to SOXX’s return of 15.53%. But remember, past performance doesn't guarantee future results.
In the end, the best fund for you depends on what you're looking for. If you want a more concentrated exposure to the semiconductor industry, SMH might be the way to go. But if you'd prefer a bit more diversification within the sector, SOXX could be a better fit.
As always, make sure to do your own research before making any investment decisions!
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I recently put together a master list of 88 different ETFs designed to support different investment goals. You can grab it here.
And as always: Buy things that pay you to own them.
-Josh
Blog Post: #122
