The Motley Foolยท2025-11-08 14:30Core Viewpoint - The Fidelity MSCI Information Technology Index ETF (FTEC) and the iShares Semiconductor ETF (SOXX) offer different investment strategies within the technology sector, with FTEC providing broader diversification and lower costs compared to the more concentrated SOXX [1][10]. Cost & Size Comparison - SOXX has an expense ratio of 0.34%, while FTEC has a lower expense ratio of 0.08% [2] - As of October 31, 2025, SOXX has a 1-year return of 28.64% compared to FTEC's 26.99% [2] - SOXX has a dividend yield of 0.5%, slightly higher than FTEC's 0.4% [2] - Assets Under Management (AUM) for SOXX is $16.8 billion, while FTEC has $17.5 billion [2] Performance & Risk Comparison - The maximum drawdown over five years for SOXX is (45.75%), significantly higher than FTEC's (34.95%) [4] - An investment of $1,000 would grow to $2,842 in SOXX over five years, compared to $2,568 in FTEC [4] Portfolio Composition - FTEC holds 288 stocks, providing nearly complete coverage of the U.S. tech sector, with 98% in technology and 1% in communication services [5] - Top holdings in FTEC include Nvidia, Microsoft, and Apple [5] - SOXX is concentrated with only 35 stocks, all in technology, featuring top positions in Advanced Micro Devices (AMD), Broadcom, and Nvidia [6] Sector Exposure - Both ETFs provide exposure to the artificial intelligence sector, with SOXX focusing on semiconductor stocks essential for AI systems [7] - FTEC includes semiconductor stocks like Nvidia and AMD, but also encompasses non-semiconductor companies that have experienced significant gains, such as Palantir, which saw a 200% increase in shares over the past year [8] Market Outlook - SOXX is positioned to benefit from the anticipated growth in semiconductor stocks as governments and businesses upgrade to specialized AI chips [9] - FTEC offers exposure to both semiconductor and major tech players like Microsoft, which are also expected to grow due to AI advancements, providing a more diversified investment opportunity [10]