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Today, Iโd like to discuss the differences between SOXX and XOQ. A while ago, I received a helpful comment on a video I uploaded about SXQ ETFs asking about the differences between them, so I decided to make a video about it. Please listen with a light heart. First, let me briefly summarize the features of the SX ETF.
You can keep in mind that SOXX is an ETF that tracks the IC Semiconductor Index. Before June 2021, the underlying index was based on the Philadelphia Semiconductor Index. Currently, there are two: the Philadelphia Semiconductor Index and the IC Semiconductor Index. So, let's take a look at the Philadelphia Semiconductor Index and the IC Semiconductor Index.
You can organize your thoughts by understanding that the Philadelphia Semiconductor Index is a semiconductor index where the stock prices of 30 companies related to semiconductor design, supply, and manufacturing are indexed. The representative constituent stocks of the Philadelphia Semiconductor Index are as follows: Nvidia, AMD, TSMC, Qualcomm, Texas Instruments, Broadcom, Intel, ASML, etc.
It is composed of 30 stocks. On the other hand, the IC Semiconductor Index is an index created by BlackRock in April 2021, and it is almost like a twin to the Philadelphia Semiconductor Index. You can see that this exists. So, what is the difference between the two semiconductor indices? The Philadelphia Semiconductor Index invests in the top 30 stocks by market capitalization among those classified as ICB and ES semiconductors, whereas the IC Semiconductor Index invests in the top 30 stocks by market capitalization among those classified as IC semiconductors.
In other words, the two indices differ because there are cases where stocks with small weightings are classified as ICB but not as ICE, so they are not included. However, since both the Philadelphia Semiconductor Index and the IC Semiconductor Index target U.S.-listed stocks and have the same number of stocks at 30, based on my research, you can understand that there are no significant differences in the stocks or weightings.
Also, weighting is usually applied using a market capitalization weighting method; you can see that the upper limit for the top five stocks by market capitalization is set at 88%, and the upper limit for the remaining 25 stocks is set at 4%. To bring up Sxx 2% Fire Insurance again, keep in mind that Sxx was launched in July 2001, and in June 2021, the underlying index changed from the Philadelphia Semiconductor Index to the IC Semiconductor Index.
I think you should add it. If you look at the SOXX ETF chart, it closed at $597.3. If you look at SXQ, it showed a continuous upward trend until it experienced an endless crash starting in 2022, but from 2023 into 2024, it has been showing a chart pattern of gradually rising. It has also recovered its previous high, and the investment holdings seem to be as follows: AMD, Broadcom, Video, Qualcomm, Intel, etc.
So, shall we summarize SXQ? SXQ N was launched in June 2021, so you can consider it a relatively new ETF that is now about three years old. This ETF tracks the Philadelphia Semiconductor Index, not the IC Semiconductor Index. In other words, if you want to invest in an ETF that tracks the Philadelphia Semiconductor Index rather than the IC Semiconductor Index, you should invest in SOQL instead of SOXX.
For reference, the fee for SXQ is 0.19%, while the fee for SXX is 0.35%. The advantage of SQY is that its fees are cheaper compared to SXX. Also, SXX has been listed for a while... One advantage is that you can invest with a small amount of capital as the stock price is low when accumulating shares one by one in a short period.
Another point is the difference in liquidity; it has higher trading liquidity compared to the SXQ. If you look at the SOQ ETF chart, the closing price ended at $34. The SXQ, after hitting the market crash in 2022 and continuously falling, is now showing a chart that is slowly rising. The investment stocks are as follows: AMD, Nvidia, Broadcom, Qualcomm, Intel, etc.
So, let's summarize today's content. The differences between SXX and SOQ are: first, liquidity; second, fees; and third, the index they track. If the SXX tracking index had not changed from the Philadelphia Semiconductor Index to the IC Semiconductor Index, it would likely have grown by almost 2% compared to now.
Of course, since they are already showing almost the same trend, there doesn't seem to be a significant difference. Viewers and subscribers, I made this video hoping it would be of some help regarding semiconductor index-tracking ETFs, which are a hot topic these days. I am not telling you to invest in these stocks; please use this video only as a reference when making your investment decisions.
I believe it will work out. I wish you the best of luck in investing only when you have gained your own conviction through your own study. I sincerely hope for your successful investments, and with that, I would like to conclude today's video. I hope you finish your day happily and that tomorrow is no exception. I will be back with better posts and videos. Thank you.
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