The iShares PHLX Semiconductor ETF tries to reflect the performance of the PHLX SOX Semiconductor Index. Due to its more traditional market cap-weighting methodology, the ETF leans toward larger companies, including a 10.4% Nvidia, 8.1% Broadcom and 7.4% Texas Instruments.
The SPDR S&P Semiconductor ETF tries to reflect the performance of the S&P Semiconductor Select Industry Index, which includes semiconductors taken from the broader S&P Total Market Index. Moreover, XSD follows a modified equal weighted indexing methodology that may provide the potential for unconcentrated industry exposure across the various market capitalization. Top holdings include Nvidia 4.4%, Cirrus Logic 3.6% and Micron Technology 3.5%.
When comparing the three, investors who want more traditional market-cap weighted exposure may look to the SOXX, the largest semiconductor-related ETF, as the iShares option focuses more on mega- and large-cap companies. While PSI and XSD both include greater tilts toward smaller companies due to their indexing methodologies, the PowerShares option also leans more toward the growth style due to its momentum screens, whereas the State Street option includes more exposure to the blended/value style. Nevertheless, as semiconductor technology stocks, these sector-focused ETFs naturally have larger growth-oriented exposure.
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