SOXX Surged 190% in a Year but XSD Only Returned 180% — Here’s Why the Difference Matters

The SPDR S&P Semiconductor ETF (NYSEARCA:XSD) and the iShares Semiconductor ETF (NASDAQ:SOXX) look like interchangeable ways to own the chip cycle, but they differ in one fundamental way. XSD spreads capital across the industry on an equal-weight basis, while SOXX concentrates it in the largest names. That single design choice has produced a meaningful gap during this cycle: SOXX is up 190.03% over the past year versus XSD’s 180.24%, and the spread widens further over five years.

What each fund is actually betting on

XSD tracks the S&P Semiconductor Select Industry Index using equal weighting. The evidence is in the top of the book: Marvell Technology at 3.06%, Power Integrations at 3.05%, Cirrus Logic at 2.98%, and Analog Devices at 2.78%. The variance across the top 10 is roughly a quarter of a percentage point. That is a bet that mid-cap analog, RF, and specialty logic names will compound faster than the megacaps once the AI capex narrative broadens.

SOXX takes the opposite stance. Cap weighting funnels assets toward NVIDIA, Broadcom, AMD, and the equipment trio of ASML, Applied Materials, and Lam Research. The VanEck Semiconductor ETF (NASDAQ:SMH) is even more concentrated, with AMD at 10.33%, Broadcom at 9.57%, Micron at 9.39%, and TSMC at 8.75%. SOXX and SMH are levered to the AI infrastructure trade. XSD is levered to the cycle broadening out.

Where the difference shows up

The current cycle has rewarded both bets, but unevenly. Year to date, SOXX has returned 104.57% and XSD 102.14%, a virtual tie. Over five years the cap-weighted approach dominates: SOXX is up 340.13% against XSD’s 266.82%, and SMH leads the group at 422.86%. The reason is straightforward: NVIDIA carried the index, and equal weighting actively trims that winner at every rebalance.

The macro setup supports the breadth thesis. Worldwide semiconductor revenue reached $298.5 billion in Q1 2026, a 79.2% increase from Q1 2025, with strength spreading well beyond AI accelerators into memory, foundry, and analog.

The practical comparison

The verdict

SOXX is the better default. The semiconductor industry is structurally winner-take-most, and cap weighting has captured that reality. XSD makes sense for an investor who already holds NVIDIA and the megacap chip names directly and wants exposure to the smaller analog, RF, and specialty logic ecosystem without piling more weight on names they already own. The calculus flips if NVIDIA stumbles or AI capex meaningfully decelerates. In that scenario XSD’s equal-weight discipline becomes a feature rather than a drag.