Diversified Semiconductor Exposure: How iShares Semiconductor ETF Delivers Consistent 20%+ Annual Returns Over a Decade

Why Choose an ETF Over Individual Semiconductor Stocks?

The semiconductor industry has become increasingly central to modern technology infrastructure. From cloud computing infrastructure to consumer electronics, automotive systems, and IoT devices, semiconductor chips are integral to nearly every technological advancement. While individual stocks like Nvidia, Advanced Micro Devices (AMD), and Broadcom have captured significant investor attention, navigating the complexity of picking individual winners requires substantial research and conviction.

For investors seeking broad exposure without the burden of extensive stock selection, the iShares Semiconductor ETF (NASDAQ: SOXX) presents a compelling alternative. This fund operates as a single investment vehicle providing instant access to a basket of 31 leading semiconductor companies.

Performance Track Record: A Decade of Outperformance

The historical returns speak for themselves. Here’s how the iShares Semiconductor ETF has performed across various time horizons:

Source: Morningstar.com, as of November 24, 2025

These returns demonstrate remarkable consistency, particularly the 26.4% annualized gain over the past decade—substantially outpacing broader market indices. However, it’s important to acknowledge that achieving these returns came alongside notable volatility, a characteristic inherent to the semiconductor sector’s cyclical nature.

Understanding the Fund Structure and Holdings

The iShares Semiconductor ETF tracks the NYSE Semiconductor Index, which comprises U.S.-listed semiconductor manufacturers. The fund typically maintains at least 80% of assets in index components, with the remaining 20% allocated to futures, options, swaps, and cash equivalents for operational efficiency.

The fund’s current 31-stock portfolio is dominated by industry leaders. The top 10 holdings as of November 21, 2025 are:

1. Advanced Micro Devices — 8.92%
2. Broadcom — 8.14%
3. Nvidia — 7.31%
4. Micron Technology — 6.2%
5. Qualcomm — 5.4%
6. Lam Research — 5.07%
7. Applied Materials — 4.96%
8. Intel — 4.84%
9. KLA Corp. — 4.48%
10. ASML — 4.4%

This composition creates a balanced exposure across semiconductor design, manufacturing, and equipment supply—reducing concentration risk while maintaining quality.

Instant Diversification Without the Complexity

By investing in the iShares Semiconductor ETF, you gain proportional ownership stakes in 31 semiconductor companies with a single transaction. This approach eliminates the need to research individual stock fundamentals, valuations, and competitive dynamics. The diversification inherently reduces the impact of any single company’s underperformance while preserving upside participation from industry leaders.

For investors with a 10-year investment horizon, this diversified approach has proven particularly effective. The sector’s long-term secular growth drivers—including artificial intelligence infrastructure, 5G expansion, and advanced computing demands—suggest continued tailwinds ahead.

Key Takeaway

The iShares Semiconductor ETF offers a pragmatic solution for investors seeking focused semiconductor exposure combined with meaningful diversification. Its track record of 26.4% average annual returns over a decade demonstrates the sector’s wealth-creation potential, while its 31-stock composition mitigates individual company risk. For those building long-term technology-focused portfolios, this ETF merits serious consideration.