FTEC vs. SOXX: Which Tech ETF Is the Better Buy for Your Portfolio?
Key Points
SOXX is focused solely on semiconductors, while FTEC covers the entire technology sector with nearly 10 times as many holdings.
FTEC has a much lower expense ratio but has lagged SOXX on recent one-year and five-year total returns.
SOXX has experienced deeper drawdowns and higher volatility, reflecting its concentrated, high-beta profile.
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iShares Semiconductor ETF (NASDAQ: SOXX) and Fidelity MSCI Information Technology Index ETF (NYSEMKT: FTEC) differ materially in cost, sector concentration, and recent performance -- with SOXX offering a pure-play semiconductor tilt and FTEC providing broad tech exposure at a lower fee.
This comparison explores how these approaches translate into costs, returns, risk, and portfolio construction -- helping investors weigh which fund may better align with their objectives.
Snapshot (cost & size)
| Metric | SOXX | FTEC |
|---|---|---|
| Issuer | iShares | Fidelity |
| Expense ratio | 0.34% | 0.08% |
| 1-yr return (as of 3/25/26) | 66.8% | 24.3% |
| Dividend yield | 0.5% | 0.4% |
| Beta | 1.79 | 1.31 |
| AUM | $21.7 billion | $16.0 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.
FTEC charges lower fees, with an expense ratio of just 0.08%. Both funds offer a similar, modest dividend yield.
Performance & risk comparison
| Metric | SOXX | FTEC |
|---|---|---|
| Max drawdown (5 y) | -45.75% | -34.95% |
| Growth of $1,000 over 5 years | $2,473 | $2,019 |
What's inside
FTEC casts a wide net across the technology sector, holding around 290 stocks spanning software, hardware, semiconductors, and IT services. That said, it’s notably top-heavy: top holdings include Nvidia (NASDAQ:NVDA) at 17.2%, Apple (NASDAQ:AAPL) at 15.0%, and Microsoft (NASDAQ:MSFT) at 10.3% -- meaning a few mega-cap names carry an outsize share of the fund's weight despite its large number of positions. The fund’s track record dates back to 2013.
SOXX, in contrast, is a focused play on the semiconductor industry, with just 30 holdings. Its largest positions are Nvidia, Broadcom (NASDAQ:AVGO), and Micron Technology (NASDAQ:MU) -- making for a more evenly distributed weighting across its holdings. Though it has fewer positions than FTEC, SOXX's concentration risk comes more from its narrow industry focus.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
For most retail investors, the choice between SOXX and FTEC comes down to this question: What kind of concentration risk are you more comfortable with? Because both funds carry it -- just in different forms.
FTEC offers broad sector diversification across 294 holdings spanning software, hardware, IT services, and chips. But don't mistake breadth for balance: Nvidia, Apple, and Microsoft together account for more than 40% of the fund. That means a meaningful chunk of FTEC's performance rides on three mega-cap names. For investors who want wide-angle tech exposure at a very low cost (0.08% annually), FTEC is still a reasonable core holding -- just know the mega-caps will have to do a lot of the heavy lifting.
SOXX is a different kind of concentrated bet. Its 30 holdings are more evenly weighted -- with each top position at around 8% -- but the fund is entirely exposed to one industry: semiconductors. Chips are notoriously cyclical, tending to surge in bull markets and sell off hard when demand weakens. SOXX's higher historical volatility and deeper drawdowns reflect that reality. The trade-off? When the semiconductor cycle turns in investors' favor -- as it has during periods of AI-driven demand -- SOXX can meaningfully outpace broader tech funds.
Neither fund is inherently better; they serve different investor profiles. Those seeking wide tech exposure with lower fees may prefer FTEC, while accepting that its returns will be heavily influenced by a handful of the market's largest companies. Investors with a specific thesis on semiconductors -- and the stomach for sharper swings -- may find SOXX's more balanced weighting and cyclical upside potential worth the added industry risk.
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Andy Gould has positions in Apple and Nvidia and has the following options: long January 2027 $125 calls on Nvidia and short January 2027 $125 puts on Nvidia. The Motley Fool has positions in and recommends Apple, Micron Technology, Microsoft, Nvidia, and iShares Trust - iShares Semiconductor ETF and is short shares of Apple. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
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