Investors comparing the iShares Semiconductor ETF (NASDAQ: SOXX) and the Fidelity MSCI Information Technology Index ETF (NYSEMKT: FTEC) face a fundamental choice between concentrated exposure and broad diversification.
Both funds target the technology sector, but their underlying mechanics differ significantly in ways that affect concentration risk, volatility, and long-term performance potential.
SOXX holds just 30 stocks, focusing exclusively on the semiconductor industry, while FTEC casts a much wider net with nearly 300 holdings across software, services, and hardware.
The difference in concentration becomes clear when examining their largest positions, with SOXX anchored by Nvidia, Broadcom, and Advanced Micro Devices, while FTEC’s top holdings include Nvidia, Apple, and Microsoft.
Cost-conscious investors will find FTEC considerably more affordable, carrying an expense ratio of just 0.08% compared to SOXX’s 0.33%, translating to $8 versus $33 annually per $10,000 invested.
As of August 11, 2026, SOXX shares trade at $534.20 while FTEC shares are priced at $286.79, with SOXX managing $44.7 billion in assets under management compared to FTEC’s $19.9 billion.
The performance gap between the two funds over the past year has been striking, with SOXX posting a one-year total return of 119.0% against FTEC’s already impressive 38.5% gain.
That outperformance comes with a meaningful trade-off in volatility, as SOXX carries a five-year monthly beta of 2.32 compared to FTEC’s 1.46, indicating significantly larger price swings relative to the broader S&P 500.
Over a five-year period, a $1,000 investment in SOXX would have grown to $3,602 in total return, compared to $2,436 for the same amount invested in FTEC.
However, SOXX also experienced a deeper maximum five-year drawdown of 45.75%, versus FTEC’s comparatively milder 34.95%, highlighting the downside risk that comes with sector concentration.
FTEC’s diversification means that weakness in semiconductor stocks is less likely to drag the entire portfolio, offering a smoother ride for investors who prioritise capital preservation over maximum upside.
For risk-averse investors or those seeking broad exposure to the overall tech sector, FTEC may be the more suitable option, while those specifically targeting semiconductor growth may find SOXX’s focused approach more compelling.
Both funds were launched at different times, with SOXX debuting in 2001 and FTEC following in 2013, giving SOXX a longer track record across multiple market cycles including major downturns and recoveries.
Ultimately, choosing between SOXX and FTEC comes down to individual risk tolerance, investment goals, and where gaps currently exist within a broader portfolio strategy.
