As the world’s largest asset manager with an impressive $10 trillion in client funds under its purview, Blackrock is a financial behemoth like no other. Its subsidiary, iShares, boasts a vast array of over 1,400 exchange-traded funds (ETFs) aimed at catering to the diverse needs of investors across the globe.
The iShares Semiconductor ETF (NASDAQ: SOXX) manages a substantial $12.9 billion portfolio dominated by renowned chip stocks that play a pivotal role in the ongoing artificial intelligence (AI) revolution.
The Recent Stock Split of iShares Semiconductor ETF
Delivering impressive compound annual returns of 25.3% over the past decade, the iShares Semiconductor ETF has outshined the S&P 500 index with almost double the annual returns. With a recent surge propelling its share price to $680 in March, iShares executed a 3-for-1 stock split, making the ETF more accessible to a broader base of investors by reducing the price per share to approximately $225.
The ETF’s continued momentum is fueled by the burgeoning opportunities within the AI industry, with top holdings like Nvidia and Advanced Micro Devices poised to drive substantial growth in the long run.
Banking on Leading Chip Companies Worldwide
AI-driven tools such as ChatGPT, Gemini, and Claude are a common sight in today’s tech landscape, powered by advanced chips housed in data centers. Nvidia stands out as a frontrunner in designing cutting-edge GPUs crucial for developing, training, and deploying AI models.
With a market capitalization of $2.3 trillion, Nvidia’s ascension over the past year has been meteoric, driven by soaring demand for its state-of-the-art GPUs from tech giants like Microsoft, Amazon, and Meta Platforms.
The iShares Semiconductor ETF boasts 30 different stock holdings, with Nvidia reigning as its largest position. The ETF’s top five holdings, including Broadcom, Advanced Micro Devices, Qualcomm, and Intel, collectively represent 36.4% of its total portfolio value.
Strategizing for Long-Term Returns
Since its inception in 2001, the iShares Semiconductor ETF has yielded a commendable compound annual return of 11.6%. However, the recent surge in cloud computing and AI technologies has propelled its 10-year average annual return to an impressive 25.3%.
By investing $500 monthly in the ETF over periods spanning 10, 20, and 30 years, investors have the potential to witness significant growth, bolstered by the robust performances of key players in the semiconductor industry.