A fund’s label can be a useful starting point, but it rarely captures the full picture of your investment.
The ten largest holdings in the Invesco PHLX Semiconductor ETF (SOXQ) make up 61.0% of the fund
That single figure tells you more about your investment than the fund’s name alone. While the name promises exposure to the semiconductor sector, the portfolio’s construction shows that this exposure is delivered through a relatively focused group of companies. SOXQ is an index fund designed to track the performance of the thirty largest U.S.-listed companies in the semiconductor business.
These are the firms that make the essential components, like memory chips and microprocessors, that power a vast range of electronic devices. How Concentrated Is This Basket Of Chips? A fund’s name tells you the category, but its holdings tell you the investment focus.