Invesco PHLX Semiconductor ETF: Key Insights for Investors

Invesco PHLX Semiconductor ETF (SOXQ) is attracting attention amid its low-cost structure and broad market exposure despite recent losses. Investors should evaluate the ongoing trends and risks associated with semiconductor stocks.

Date: 10-04-2025

AI Rating: 5

The Invesco PHLX Semiconductor ETF (SOXQ) offers notable insights for investors focusing on the Technology - Semiconductors sector. A key attraction of this ETF is its expense ratio of 0.19%, making it one of the least expensive in the segment. This could enhance returns over the long term, particularly during market uncertainty.

Performance Overview
Year-to-date, SOXQ has declined by approximately -28.25% and is down around -25.49% over the last 12 months. This significant downturn raises concerns about the underlying semiconductor stocks, especially given the ETF's concentrated exposure to major players like Broadcom (AVGO), Nvidia (NVDA), and AMD.

Top Holdings and Diversification
The ETF's concentration is quite high, with the top 10 holdings representing about 59.84% of total assets. This raises the risk profile since it's heavily reliant on the performance of these few companies within the semiconductor space, particularly in the event of market volatility.

Risk Factor
A beta of 1.51 suggests that SOXQ is more volatile than the broader market, indicating that while the potential for significant gains is present, the risks associated with price fluctuations are also heightened. Investors should weigh this risk against potential returns, particularly in a turbulent market.

Sector Outlook
Given that the Technology - Semiconductors sector ranks 6th among the Zacks Industry classification, positioning it in the top 38%, investors might find potential growth opportunities if the sector rebounds. For those looking to hedge against downturns, exploring other ETFs in this space, such as SOXX and SMH, could prove beneficial.

Overall, while SOXQ presents a compelling investment option due to its low costs and ETF rank of 2 (Buy), investors need to be cautious, given the recent performance and inherent risks in the semiconductor sector.

Stocks: AVGO NVDA AMD