Semiconductor ETF SOXX Set to Outperform SMH with Strong Portfolio

The iShares Semiconductor ETF (SOXX) has room to gain due to its superior portfolio compared to the VanEck Vectors Semiconductor ETF (SMH). Despite the semiconductor industry taking a hit from the tariff announcement, it has since recovered due to the solid financials of main chip stocks. SOXX's diversified portfolio, which includes companies like Intel, Texas Instruments, and Micron Technology, provides a more comprehensive exposure to the sector. This sets it apart from SMH, which has a more concentrated portfolio. As a result, SOXX may have more upside potential in the coming months.

The semiconductor industry, a cornerstone of modern technology, has been facing significant challenges due to recent tariff announcements. However, both the iShares Semiconductor ETF (SOXX) and the VanEck Vectors Semiconductor ETF (SMH) have shown resilience, with SOXX potentially offering more upside due to its diversified portfolio.

Fundamentals and Performance

SOXX, with a price of $244.13 and a change of +$0.79 (+0.32%), has a net asset value of $13.73 billion, while SMH is priced at $285.43 with a change of +$1.95 (+0.69%) and a net asset value of $27.32 billion [1]. Despite the industry's recent setbacks, both ETFs have shown strong performance, with SMH gaining 17.859% YTD and SOXX gaining 13.679% YTD. However, SOXX's lower expense ratio of 0.35% compared to SMH's 0.35% suggests better cost efficiency.

Portfolio Composition

SOXX's portfolio includes major semiconductor companies like Intel, Texas Instruments, and Micron Technology, providing a broad exposure to the sector. In contrast, SMH has a more concentrated portfolio, which may limit its upside potential. The diversified nature of SOXX's holdings could be an advantage in the event of sector-specific headwinds or market volatility.

Technical Analysis

Technical indicators for both ETFs are favorable, with SOXX showing higher RSI (Relative Strength Index) and Stochastic ODDS, indicating strong momentum. However, SMH's higher MACD (Moving Average Convergence Divergence) ODDS suggests a more bullish trend. Both ETFs have comparable turnover rates, but SOXX's higher yield of 0.69% compared to SMH's 0.38% indicates a more attractive income stream.

Conclusion

While both SOXX and SMH have shown strong performance and resilience in the face of recent tariff announcements, SOXX's diversified portfolio and favorable technical indicators suggest it may have more upside potential in the coming months. Investors seeking exposure to the semiconductor sector should consider SOXX's advantages, particularly its broad exposure to major players in the industry.

References

[1] https://tickeron.com/compare/SMH-vs-SOXX/
[2] https://www.etf.com/sections/daily-etf-flows/smh-attracts-605m-strong-jobs-data-lift-markets
[3] https://www.ainvest.com/news/navigating-tariff-storm-sector-vulnerabilities-hedging-strategies-trump-driven-trade-landscape-2507/