SOXQ, which tracks the PHLX Semiconductor Sector Index, has delivered a return of 27.5% year to date and 6.5% over the past month. This index consists of the 30 largest U.S.-listed semiconductor companies that produce memory chips, microprocessors, integrated circuits, and related equipment used in various electronic devices such as household products, automobiles, and computers.
PSI, on the other hand, has achieved a return of 19.8% year to date and 3.8% over the past month. It follows the Dynamic Semiconductor Intellidex Index, which selects semiconductor companies based on fundamental and quantitative factors.
Semiconductor stocks play a vital role in electronic devices and are crucial for advancements in multiple industries, including communications, computing, healthcare, military systems, transportation, and clean energy. This positions them for long-term demand and potential growth.
Despite near-term uncertainty in the technology sector, semiconductor ETFs are expected to benefit from newer innovations in technology, such as electric vehicles and artificial intelligence (AI). The increasing prominence of AI, like ChatGPT, could contribute to the continued growth of the semiconductor industry.