Generated June 2026 from current fund data.
Overview
QQQ tracks the Nasdaq-100 Index, a broad basket of 100 large non-financial Nasdaq stocks weighted by market cap, while SOXX targets the ICE Semiconductor Index, a concentrated sector play on US-listed chip companies. QQQ offers diversified exposure across tech, consumer, and healthcare; SOXX isolates semiconductor manufacturing and design. The funds differ fundamentally in breadth—one covers a tech-heavy mega-cap index, the other narrows to a single industry subsector.
How they differ
QQQ's biggest structural advantage is diversification: it holds 100 companies across multiple sectors, whereas SOXX concentrates on semiconductors alone. This shows up in beta: QQQ has a beta of 1.23, while SOXX's beta is 2.26, reflecting SOXX's higher sensitivity to market swings and sector-specific volatility. On income, QQQ yields 0.44% versus SOXX's 0.18%, though both pay quarterly. QQQ costs 0.18% annually to hold; SOXX charges 0.35%, nearly double. QQQ's $481B in assets dwarfs SOXX's $36.9B, meaning QQQ offers tighter bid-ask spreads and deeper liquidity.
Who each is best for
QQQ: Fits investors seeking broad exposure to mega-cap tech and growth stocks with lower volatility than a pure semiconductor bet and minimal annual drag from fees.
SOXX: Fits investors who believe semiconductors will outpace the broader market and are comfortable with sector concentration and roughly twice the price swings of the Nasdaq-100.
Key risks to know
- Concentration risk in SOXX. Holding only semiconductor companies exposes investors to industry-cycle swings, supply-chain disruptions, and geopolitical risk (Taiwan exposure, China tariffs) in ways QQQ's diversified Nasdaq-100 exposure buffers against.
- Higher volatility in SOXX. A beta of 2.26 means SOXX's price moves are more than twice as large as the broader market, amplifying drawdowns during tech downturns and requiring higher risk tolerance.
- Growth-stock sensitivity in both. Both QQQ and SOXX hold few dividend payers and are sensitive to interest rate changes; rising rates tend to depress valuations of companies priced for future earnings.
- Sector overlap and correlated losses. During periods when semiconductor stocks underperform (e.g., chip gluts or demand shocks), SOXX will likely lag, while QQQ's broader base may cushion the fall.
Bottom line
If you want diversified large-cap growth exposure with lower volatility and cheaper fees, QQQ stands out; if you're tilting toward semiconductors as a secular theme and accept higher price swings, SOXX offers concentrated sector leverage. Neither guarantees outperformance, and past results don't predict the future.
AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.