Technology ETF Showdown: Is SOXX or IYW the Better Buy for Investors Right Now?
Key Points
SOXX offers a lower expense ratio and higher dividend yield than IYW.
SOXX has outperformed IYW in both one- and five-year total returns but exhibits higher volatility.
IYW offers more diversified tech exposure, with 139 holdings, compared to SOXX's 30-stock portfolio.
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Both the iShares Semiconductor ETF (NASDAQ:SOXX)and the iShares U.S. Technology ETF (NYSEMKT:IYW) target the U.S. tech sector, but they take different approaches.
While IYW tracks a broad index of technology companies, including software and internet giants, SOXX focuses exclusively on the hardware-heavy semiconductor industry.
This distinction in scope leads to different risk-reward profiles for growth-oriented investors who may be weighing broad tech exposure against a more concentrated play on the essential chips powering global innovation and artificial intelligence.
Snapshot (cost & size)
| Metric | IYW | SOXX |
|---|---|---|
| Issuer | iShares | iShares |
| Expense ratio | 0.38% | 0.34% |
| 1-yr return (as of June 7, 2026) | 47.7% | 149.9% |
| Dividend yield | 0.11% | 0.29% |
| Beta (5Y monthly) | 1.43 | 2.26 |
| Assets under management (AUM) | $25.2 billion | $38.4 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 is slightly more affordable with a lower expense ratio, and it also offers a higher dividend payout. These yield differences reflect the cash-flow characteristics of their underlying semiconductor and broad-tech holdings.
Performance & risk comparison
| Metric | IYW | SOXX |
|---|---|---|
| Max drawdown (5 yr) | -39.4% | -45.8% |
| Growth of $1,000 over 5 years (total return) | $2,624 | $3,859 |
What's inside
SOXX targets 100% of its portfolio in the technology sector, with a specific focus on the semiconductor industry. It holds 30 stocks, and its largest positions include Micron Technology, Advanced Micro Devices, and Marvell Technology. The fund was launched in 2001 and has a trailing-12-month dividend of $1.67 per share.
In contrast, IYW offers broader reach with 139 holdings. It also focuses exclusively on the technology sector, and its largest positions include tech giants like Nvidia, Apple, and Alphabet. The fund was launched in 2000 and has 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 is the more concentrated ETF of the two, as it focuses solely on semiconductor stocks. This has proven to be a lucrative approach, as these stocks have skyrocketed in recent years with the advancement of artificial intelligence technology. If AI continues to thrive, SOXX could be poised for significant growth.
If AI falters, however, SOXX may be hit much harder than IYW. Although SOXX has outperformed IYW in both one- and five-year total returns, it’s also experienced a much steeper max drawdown and a higher beta — suggesting more severe short-term volatility.
Both ETFs can be smart buys, but the right one for you will depend primarily on your risk tolerance.
Investors who are comfortable with greater volatility may prefer SOXX for its earning potential. However, if you’re seeking a more stable ETF to provide exposure to the broader tech sector, IYW’s diversification may be its strongest selling point.
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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, Marvell Technology, Micron Technology, Nvidia, and iShares Trust - iShares Semiconductor ETF. The Motley Fool has a disclosure policy.
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