If you check out a list of the best-performing stocks over the past decade or so, you probably won't be surprised to find multiple semiconductor stocks on it, such as Nvidia, Advanced Micro Devices, and Broadcom.
It's not very surprising because these days almost everything runs with semiconductors -- even our cars and washing machines. Our modern world depends on them for everything from cloud computing to artificial intelligence (AI), data centers, smartphones, and more. Semiconductors are increasingly in demand -- and newer and faster ones, too.
If you want to invest in semiconductor companies, you can try to figure out which ones will have grown the most 10, 20, or 30 years from now -- or you can simply invest in a semiconductor-focused exchange-traded fund (ETF) -- a fund that trades like a stock, full of semiconductor stocks.
A great one to consider is the iShares Semiconductor ETF (SOXX +1.24%). If you have $500 on hand to invest for the long term, here's why it might make sense.
NASDAQ: SOXX
Key Data Points
Meet the iShares Semiconductor ETF
The iShares Semiconductor ETF has a lot going for it. Perhaps the best thing about the ETF is its performance in recent years. Check it out:
|
iShares Semiconductor ETF |
Average Annual Gain |
|---|---|
|
1 year |
16.91% |
|
3 years |
27.95% |
|
5 years |
22.42% |
|
10 years |
26.12% |
|
15 years |
22.65% |
Data source: Morningstar.com, as of Sept. 11, 2025.
Those are robust returns. There's no guarantee that they will be similar over the next few years, but over the long run, it's hard to believe that semiconductor business won't, in general, thrive.
If you invest, say, $10,000 per year in this ETF and it gains, say, 17% annually, you'll end up with a stake worth around $82,000 after five years, $262,000 after 10 years, and $1.5 million after 15 years. (Again, your investment could average higher or lower annual returns than 17%.)
Image source: Getty Images.
Another big plus for this ETF is its low expense ratio (annual fee) of just 0.34%, meaning that you'll be charged a whopping $34 per year for every $10,000 you have invested in the fund.
What's in the iShares Semiconductor ETF?
So just what will you own if you invest in the iShares Semiconductor ETF? Well, it's an index fund, tracking the NYSE Semiconductor Index -- which is made up of U.S. semiconductor stocks. The ETF will usually have at least 80% of its money invested in that index's components and it's allowed to invest up to 20% in futures, options, swap contracts, cash, and cash equivalents.
The iShares Semiconductor ETF recently held 31 stocks; here are its top 10:
|
Holding |
Weight in ETF |
|---|---|
|
Broadcom |
9.49% |
|
Advanced Micro Devices |
8.98% |
|
Nvidia |
8.38% |
|
Qualcomm |
6.04% |
|
Texas Instruments |
5.48% |
|
Micron Technology |
5.09% |
|
Lam Research |
4.57% |
|
Monolithic Power Systems |
4.06% |
|
KLA Corp. |
4.05% |
|
Intel |
4.02% |
Data source: BlackRock.com, as of Sept. 11, 2025.
Interestingly, the three companies I mentioned at the beginning of this article -- three of the best performers over the past decade -- are the recent top holdings of this ETF. While any money you invest in the ETF will be distributed across some 31 holdings, more than a quarter -- 26.9% -- was recently in just those top three stocks.
That could be good, bad, or irrelevant, depending on your viewpoint. You might like being overweighted in such strong performers, or you might prefer to have more weight given to smaller stocks. Or you might just want to own whichever stocks the managers of the index deem worthy of it.
So give this solid ETF some consideration for your long-term portfolio. Know that there are plenty of other very promising index ETFs out there, as well -- and other semiconductor ETFs, too.
