SOXX vs. IYW: How Targeted Semiconductor Exposure Compares to Broad Tech Diversification
Key Points
SOXX offers a more concentrated focus on chipmakers, while IYW focuses on the broader tech sector.
SOXX has delivered significantly higher total returns over the past year and five years despite carrying higher volatility and a deeper historical drawdown.
IYW provides broader sector exposure across 139 holdings compared to SOXX's narrow 30-stock portfolio.
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Investors choosing between the iShares U.S. Technology ETF (NYSEMKT:IYW) and the iShares Semiconductor ETF (NASDAQ:SOXX) are essentially weighing broad software and hardware exposure against a hyper-focused, high-volatility bet on the semiconductor industry.
Both funds are seasoned products from the iShares lineup, designed to capture the rapid growth of the digital economy through different lenses.
While IYW casts a wide net across the domestic tech landscape, SOXX targets the specific companies that manufacture the hardware and circuitry powering modern computing. Here’s how they stack up.
Snapshot (cost & size)
| Metric | IYW | SOXX |
|---|---|---|
| Issuer | iShares | iShares |
| Expense ratio | 0.38% | 0.34% |
| 1-yr return (as of May 21, 2026) | 50.51% | 147.5% |
| Dividend yield | 0.12% | 0.36% |
| Beta (5Y monthly) | 1.30 | 2.06 |
| Assets under management (AUM) | $21.5 billion | $29.6 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
SOXX offers a slight advantage on both fees and income, with a lower expense ratio and higher dividend yield. While the difference is minor on both fronts, it could make a difference over time.
Performance & risk comparison
| Metric | IYW | SOXX |
|---|---|---|
| Max drawdown (5 yr) | -39.4% | -45.8% |
| Growth of $1,000 over 5 years (total return) | $2,674 | $3,904 |
What's inside
SOXX focuses specifically on semiconductor stocks, with just 30 holdings. Its largest positions include Micron Technology, Advanced Micro Devices, and Broadcom, and it has paid $1.67 per share in dividends over the trailing 12 months.
IYW provides broader exposure with 139 holdings from across the tech sector. Its top holdings include Nvidia, Apple, and Alphabet, and it offers a trailing-12-month dividend of $0.27 per share.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
SOXX and IYW take vastly different approaches to tech stocks, and the right one for you will depend on your goals, personal preferences, and risk tolerance.
SOXX is far narrower, with just 30 holdings concentrated in one subsector. This results in minimal diversification, which can increase risk but also result in higher earnings.
Semiconductor stocks have been lucrative over the last few years, as they play a major role in the development of artificial intelligence (AI). If AI-related companies continue to thrive, SOXX could be poised for significant growth. But if AI falters, this ETF could be hit much harder than its peers.
IYW offers more diversification across the technology industry. While it does cover semiconductors, it also holds stocks from more stable and established areas of the tech sector. This can help limit volatility compared to SOXX if tech stocks take a turn for the worse.
With both funds, ensure the rest of your portfolio is well-diversified and includes stocks from other market sectors. Tech stocks can be lucrative, but it’s wise to prepare for volatility just in case.
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Katie Brockman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Apple, Broadcom, Micron Technology, Nvidia, and iShares Trust - iShares Semiconductor ETF. The Motley Fool has a disclosure policy.
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