Generated July 2026 from current fund data.
Overview
QQQ tracks the Nasdaq-100 Index of the 100 largest non-financial Nasdaq stocks, giving you broad exposure to mega-cap tech, consumer, and biotech names. SOXX is narrower: it holds only US-listed semiconductor companies through the ICE Semiconductor Index. The key distinction is diversification—QQQ spreads risk across a wide swath of large-cap growth names, while SOXX concentrates on a single industry subsector.
How they differ
QQQ holds 100 stocks across multiple industries (tech, consumer discretionary, biotech, communications); SOXX holds roughly 30 semiconductor manufacturers, making it a sector bet rather than a broad-market proxy. QQQ's 0.44% distribution rate and 0.18% expense ratio reflect a larger, cheaper fund, while SOXX yields 0.19% but charges 0.35% in fees—nearly double QQQ's cost. The most striking difference is volatility: SOXX has a beta of 2.24 versus QQQ's 1.24, meaning it swings roughly twice as hard as the broader Nasdaq-100 in both directions. QQQ's $481B in assets dwarf SOXX's $36.9B, offering tighter trading spreads and more liquidity.
Who each is best for
QQQ: Fits investors seeking broad exposure to large-cap growth and tech mega-caps without betting on a single industry. The low cost and wide diversification suit long-term accumulators comfortable with Nasdaq volatility but not single-sector concentration.
SOXX: Designed for investors who believe semiconductor demand will outpace the broader market and are willing to accept 2x leverage-like volatility in exchange for focused exposure to chip makers. Works for tactical allocators or those building a custom tech tilt through multiple sector holdings.
Key risks to know
- Sector concentration in SOXX. Semiconductors are cyclical and capital-intensive; downturns in chip demand, manufacturing overcapacity, or trade restrictions can trigger sharp, sustained drawdowns in ways that won't affect QQQ as severely. SOXX's beta of 2.24 captures this amplified sensitivity.
- Nasdaq dominance in QQQ. The Nasdaq-100 is heavily weighted toward mega-cap tech (Apple, Microsoft, Nvidia, Tesla). A tech sector correction or multiple compression hits QQQ harder than the broader S&P 500, though less acutely than SOXX.
- Fee drag over time. SOXX's 0.35% expense ratio is nearly double QQQ's 0.18%. Over 20 years, that difference compounds; for a $10,000 position, QQQ saves roughly $3,200 in cumulative fees (assuming 8% annual growth).
- Geopolitical and supply-chain risk in SOXX. Semiconductor companies face chip export controls, Taiwan strait tensions, and supply-chain disruptions. These risks are idiosyncratic to the sector and don't materially affect QQQ's diversified holdings.
Bottom line
If you want broad large-cap growth exposure at a rock-bottom cost, QQQ's size, liquidity, and low fees are hard to beat. If you're convinced semiconductors will significantly outperform and can tolerate roughly 2x the volatility, SOXX lets you make that bet with precision—but you'll pay higher fees and accept single-industry risk. Past performance does not guarantee future returns.
AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.