Semiconductor ETF SOXX’s cap-weighted structure drives 73 percentage-point outperformance versus equal-weight XSD amid AI-driven gains.
The iShares Semiconductor ETF (SOXX) has surged 190% over the past year, outpacing the SPDR S&P Semiconductor ETF (XSD) by nearly 10 percentage points. Over five years, the gap widens to 73 points, driven by SOXX’s cap-weighted design favoring megacaps like NVIDIA.
XSD’s equal-weight approach spreads exposure across mid-cap names, trimming winners at each rebalance. While SOXX benefits from semiconductors’ winner-take-most dynamics, XSD may gain if AI capex slows or NVIDIA stumbles. Semiconductor revenue rose 79% year-over-year to $299 billion in Q1 2026.
The VanEck Semiconductor ETF (SMH) leads all three funds with a 423% five-year return, reflecting the sector’s rapid growth. Investors face a structural choice: cap-weighted exposure or equal-weight diversification.