The Fidelity Tech ETF Offers Lower Fees Broader Reach Than the iShares SOXX
Key Points
Fidelity MSCI Information Technology Index ETF offers a much lower expense ratio than iShares Semiconductor ETF
iShares Semiconductor ETF has delivered significantly higher total returns over the last year, but experiences greater price volatility
Fidelity MSCI Information Technology Index ETF provides broader diversification with 286 holdings compared to the 30 companies held by iShares Semiconductor ETF
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Fidelity MSCI Information Technology Index ETF (NYSEMKT:FTEC) offers low-cost, broad tech exposure, while iShares Semiconductor ETF (NASDAQ:SOXX) targets a concentrated, high-volatility bet on the semiconductor industry.
Investors seeking exposure to the technology sector often choose between broad market funds and specialized industry vehicles. The choice between a diversified information technology fund and a concentrated semiconductor fund involves weighing lower costs and broader reach against the potential for higher volatility and significant industry-specific returns.
Snapshot (cost & size)
| Metric | SOXX | FTEC |
|---|---|---|
| Issuer | iShares | Fidelity |
| Expense ratio | 0.34% | 0.08% |
| 1-yr return (as of May 6, 2026) | 173.10% | 57.90% |
| Dividend yield | 0.33% | 0.36% |
| AUM | $33.8 billion | $17.9 billion |
The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The Fidelity fund offers a significantly lower expense ratio of 0.08% compared to the 0.34% charged by the iShares ETF. While both funds focus on growth, the Fidelity fund provides a slightly higher trailing-12-month distribution yield for income-seeking investors.
Performance & risk comparison
| Metric | SOXX | FTEC |
|---|---|---|
| Max drawdown (5 yr) | (45.80%) | (34.90%) |
| Growth of $1,000 over 5 years (total return) | $3,750 | $2,457 |
What's inside
The Fidelity MSCI Information Technology Index ETF (NYSEMKT:FTEC) provides exposure to a broad range of technology companies by tracking the MSCI USA IMI Information Technology 25/50 Index. Its portfolio consists of 286 holdings, with its largest positions including Nvidia Corp (NASDAQ:NVDA) at 18.8%, Apple Inc (NASDAQ:AAPL) at 14.29%, and Microsoft Corp (NASDAQ:MSFT) at 9.91%. This Fidelity fund launched in 2013, reports no structural quirks, and paid $0.95 per share in dividends over the trailing 12 months.
In contrast, the iShares Semiconductor ETF (NASDAQ:SOXX) maintains a much tighter focus on the semiconductor industry, tracking a specialized index of U.S.-listed equities in that sector. Its portfolio holds 30 companies, and its largest positions include Micron Technology Inc (NASDAQ:MU) at 9.03%, Broadcom Inc (NASDAQ:AVGO) at 7.78%, and Advanced Micro Devices Inc (NASDAQ:AMD) at 7.70%. The fund is 100.00% concentrated in the technology sector. This iShares fund launched in 2001, reports no structural quirks, and has a trailing-12-month dividend of $1.67 per share.
For more guidance on ETF investing, check out the full guide at this link.
What it means for investors
If you want exposure to the 30 largest U.S.-listed semiconductor companies, the SOXX ETF from iShares is hard to beat. By tracking only semiconductors, it’s been a big winner in the AI revolution. The ETF is up by 73% this year.
If semiconductor-specific exposure isn’t your goal, or you’re just plain nervous about the sustainability of semiconductor demand, Fidelity’s FTEC ETF seems like a better option.
In addition to a slightly higher dividend yield, FTEC offers a significantly lower expense ratio and a diversified approach for adjusting to industry cycles. This could come in handy if demand for semiconductors stalls.
If you’re not comfortable with all the volatility that comes with a narrow focus on semiconductors, FTEC looks like the right choice.
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Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Broadcom, Micron Technology, Microsoft, Nvidia, and iShares Trust - iShares Semiconductor ETF. The Motley Fool has a disclosure policy.
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