SOXX vs. FTEC: Are Investors Better Off With a Semiconductors ETF or Broad Tech Exposure?

Core Insights - The iShares Semiconductor ETF (SOXX) and Fidelity MSCI Information Technology Index ETF (FTEC) offer distinct investment opportunities based on sector focus, cost, and risk profiles, catering to different investor needs [1][2] Cost and Size Comparison - SOXX has an expense ratio of 0.34%, while FTEC has a significantly lower expense ratio of 0.08% [3] - As of December 30, 2025, SOXX reported a 1-year return of 37.57% compared to FTEC's 19.97% [3] - SOXX has a dividend yield of 0.55%, slightly higher than FTEC's 0.40% [3] - Both ETFs have similar assets under management, with SOXX at $16.70 billion and FTEC at $16.66 billion [3] Performance and Risk Comparison - Over the past five years, SOXX experienced a maximum drawdown of -45.75%, while FTEC had a lower maximum drawdown of -34.95% [4] - An investment of $1,000 in SOXX would have grown to $2,461 over five years, compared to $2,176 for FTEC [4] Portfolio Composition - FTEC holds 291 stocks across various sectors of the U.S. technology industry, including hardware, software, and communications, with major positions in Nvidia, Microsoft, and Apple [5] - SOXX is concentrated with only 30 holdings, focusing solely on semiconductor stocks, including top positions in Nvidia, Advanced Micro Devices, and Micron Technology [6] Investment Implications - FTEC's broader diversification may provide better stability during market volatility, while SOXX's focus on semiconductors has historically led to higher returns [8][9] - Investors must consider their risk tolerance and investment goals when choosing between SOXX and FTEC, as SOXX may experience more severe price swings due to its lack of diversification [9]