AMD, NVDA, LRCX, ASML, NXPI, INTC, TSM, SWKS and TER are all trading at historical discounts and could have much further to rise should this tech rally continue. In addition, many of the underperforming components are now at attractive buying levels from a technical standpoint, having just bounced off of decisive bottoms after long declines. More conservative dividend growth stocks TXN, AVGO, MCHP, QCOM, and ADI now comprise over 30% of the portfolio, and this solid foundation should bring some comfort to investors holding the 3x leveraged SOXL. SOXX Top 20 Holdings (11/11/22) (iShares)Īs we can see above, the poor performance of cutting-edge chipmakers AMD and NVDA along with some fab and memory stocks has left the current ICE Semi index with a distinct value tilt. Right now the top 20 SOXX holdings look like this:

This weighting scheme can create large concentration disparities and very different growth and value tilts for SOXX and SOXL depending on individual stock performance over the year. The first 5 stocks have a max weighting of 8% each, and the rest have a max weighting of 4%, with annual rebalancing. The ICE Semiconductor Index is a rules-based, market-cap-weighted index of 30 semiconductor stocks. Second, due to the extreme volatility and risk involved, I will be discussing the investment potential of SOXL with the understanding that, in my opinion, this ETF is only suitable for a) inconsequential 'fun money' outside of your core portfolio holdings or b) gamblers. And in the world of 3x leveraged ETFs, a 50% gain or loss can happen in a matter of days as we've seen this week with SOXL.

Simply put, outsized gains are rarely worth the risk of outsized losses, especially because a loss of 50% requires a gain of 100% to break even. In this article I will take a look at SOXL's recent performance and its underlying index holdings to assess its near-term prospects.įirst, I am mainly a dividend growth investor and would never recommend long-term holding of any leveraged investment product (let alone a 3x ETF!) due to the risk, volatility, and rebalancing decay inherent in leveraged funds. The Direxion Daily Semiconductor 3x Bull Shares ETF ( NYSEARCA: SOXL) is a leveraged ETF designed to deliver 300% of the daily performance of the ICE Semiconductor Index, most famously tracked by the iShares Semiconductor ETF ( SOXX).

Soxl google finance