iShares PHLX Semiconductor (SOXX) — Semiconductors have been among the market’s best performers as it rallied off the late-September lows. This volatile ETF has handily beaten the S&P 500 since then, returning 17.6% compared to 11.6% for the broader market index.
The highly liquid fund tracks the PHLX Semiconductor (SOX), which is comprised of companies primarily involved in the design, distribution, manufacturing and sale of semiconductors.
The top 10 holdings in SOXX, which account for more than half of its total assets, are Intel Corporation (INTC), Texas Instruments Incorporated (TXN), Avago Technologies Ltd (AVGO), QUALCOMM, Inc. (QCOM), Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (TSM), NVIDIA Corporation (NVDA), SanDisk Corporation (SNDK), Applied Materials, Inc. (AMAT), NXP Semiconductors NV (NXPI) and Analog Devices, Inc. (ADI).
S&P Capital IQ ranks the ETF “marketweight” overall, but considers it “overweight” based on performance analytics and cost factors. It has a 12-month trailing yield of 1.9% and a relatively low expense ratio of 0.47%.
SOXX closed above its 200-day moving average on Monday, and the internal indicator, MACD, triggered a buy signal. Then, on Tuesday, it broke from a bullish “W” formation, rallying 1.6% to close above $93, exceeding the October high of $92.65. Volume, however, has been below average, which is a negative.
Traders should buy SOXX at $93 or lower for a run to $100 and a potential gain of 7.5% by year end. Long-term investors who buy shares at the current price could see a much higher return of up to 25% within 12 months.