iShares Semiconductor ETF is Still a Strong ETF Despite Recent Dip
There is an ongoing shortage of chips in the world, and that has affected the performances of numerous semiconductor manufacturers. This has also affected the performance of funds tracking these stocks.
SOXX Underperformed in Recent Days
The iShares Semiconductor ETF (SOXX) has been around since 2001 and is a smart beta exchange-traded fund. The fund provides investors with a broad exposure to the technology ETFs category of the US equity market.
SOXX is managed by BlackRock and has more than $9 billion in assets under management, making it one of the biggest funds in the Technology sector. Before fees and expenses, SOXX is designed to match the performance of the PHLX SOX Semiconductor Sector Index.
The PHLX SOX Semiconductor Sector Index, on the other hand, measures the performance of the US stocks involved in the semiconductor business. SOXX invests 100% of its allocation in the information technology sector. When you look at its portfolio, its biggest holding is Nvidia Corp (NVDA), which accounts for nearly 9% of the portfolio. The other two leading holdings include Broadcom Inc. (AVGO) and Intel Corporation Corp (INTC).
SOXX has underperformed in recent days, thanks to the poor performance of the broader market. During Friday’s trading session, the ETF lost more than 2% of its value and is currently trading above $518 per share.
SOXX Could Rally Higher Soon
Despite the recent decline, SOXX remains a strong semiconductor-focused ETF. Year-to-date, SOXX is up by more than 37%, outperforming numerous funds in this sector. The fund has traded between $352.32 and $537.71 in this past 52-week period.
SOXX’s MACD is above the neutral zone, indicating that the fund is very bullish at the moment. The fund is trading way above its 50-day moving average of $478, showing that it has strong support around the $500 level. The RSI of 63 shows that SOXX is heading into the overbought territory.
SOXX is a cheap fund because it has an annual operating expense of 0.43%. The ETF has a 12-month trailing dividend yield of 0.59%. Despite that, its beta of 1.16 and standard deviation of 35.02% for the trailing three-year period makes the fund a high-risk choice in the semiconductor space.