Even With SOXX and DRAM Down Between 24% and 42% From Their Highs, I'd Still Rather Buy This Vanguard ETF for Semiconductor Stock Exposure
Semiconductor stocks have sold off in recent months, but the industry is still up big on the year.
Despite the Roundhill Memory ETF (DRAM -7.08%) experiencing a 41.7% decrease from its peak, it has still managed to grow by 69.4% year-to-date. This fund, heavily concentrated on memory chip stocks, outperformed the iShares Semiconductor ETF (SOXX -6.79%) and the Vanguard Information Technology ETF (VGT -2.99%) over the same period.
The ETF's success can be attributed to the surge in demand for high bandwidth memory (HBM) chips, which are crucial for AI infrastructure. Top holdings include Micron Technology (MU -6.26%), Samsung Electronics (SSNLF +0.00%), and SK Hynix (SKHY -8.07%). The fund's 0.65% expense ratio is high, given its heavy concentration in just three stocks.
However, the iShares Semiconductor ETF offers a more diversified approach with a 61.6% weight on its top 10 holdings, including compute and memory chip makers, equipment companies, and more. The Vanguard Information Technology ETF provides broader tech sector exposure, comprising 43.6% of the fund in industries like semiconductors, hardware, and software.
For long-term investors, the Vanguard Tech ETF may be a better choice as it offers a more diversified approach to AI investments, while still providing exposure to key chip stocks.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
