What Is the PHLX Semiconductor Sector Index (SOX)?
The PHLX Semiconductor Sector Index (SOX) is a capitalization-weighted index composed of 30 semiconductor companies. The companies in the index have primary business operations that involve the design, distribution, manufacture, and sale of semiconductors. The index is designed to track the performance of listed semiconductors.
- The PHLX Semiconductor (SOX) is an equity index composed of companies primarily involved in the production and sale of semiconductor products such as microchips, computers, and networking equipment.
- The SOX is a modified market capitalization-weighted index listed on the Philadelphia Stock Exchange in cooperation with Nasdaq Inc.
- Tech investors can look to several ETF products that track the SOX.
Understanding the PHLX Semiconductor Sector Index (SOX)
The PHLX Semiconductor Sector Index (SOX) was created by the Philadelphia Stock Exchange (PHLX) in 1993. It continues to be managed by the Exchange with support from its owner Nasdaq. Real-time data is provided daily from the PHLX.
To be included in the index, a security must meet the following criteria defined by the PHLX and Nasdaq.
- A stock must have business operations that primarily focus on the design, distribution, manufacture, and sale of semiconductors.
- Stocks must be listed on the Nasdaq, New York Stock Exchange (NYSE), NYSE American, or the CBOE Exchange.
- Shares can include common stocks, ordinary shares, American depositary receipts (ADRs), shares of beneficial interest, or limited partnership interests.
- Securities must have a minimum market capitalization of at least $100 million.
- Members must have traded at least 1.5 million shares in each of the six calendar months leading up to the reference date.
- The security has been trading for at least three months on a registered market, not including the month of initial listing.
- The security must have listed options on a registered market in the U.S. or be eligible to do so.
- The security cannot be in the middle of bankruptcy proceedings.
If the PHLX and Nasdaq identify more than 30 eligible securities, the index will only include the top 30 largest by market capitalization. As of April 2022, the SOX was composed of the following securities:
|SOX Index Components (April 2022)|
|Company Name||Security Symbol|
|ADV MICRO DEVICES||AMD|
|ANALOG DEVICES CMN||ADI|
|ASML HLDG NY REG||ASML|
|II VI INC||IIVI|
|IPG PHOTONICS CORP||IPGP|
|KLA CP CMN STK||KLAC|
|LAM RESEARCH CORP||LRCX|
|MARVELL TECH GROUP||MRVL|
|MONOLITHIC POWER SYS||MPWR|
|QORVO, INC. CMN||QRVO|
|SILICON LABS INC||SLAB|
|TAIWAN SEMICOND ADS||TSM|
|TERADYNE INC CMN||TER|
|WOLFSPEED, INC. CM||WOLF|
Investing in the PHLX Semiconductor Sector Index (SOX)
The SOX is a closely watched index for investors interested in technology chip stocks. Options on the index are actively traded. Investors interested in investing in the index’s components can look into exchange traded funds (ETFs).
A popular ETF index fund that tracks the SOX is the Invesco PHLX Semiconductor ETF (SOXQ). Another is the VanEck Vectors Semiconductor ETF (SMH).
There are also leveraged and inverse leveraged ETFs tracking the index: the Direxion Daily Semiconductor Bull 3X Shares (SOXL) managed by Rafferty Asset Management, LLC and the Direxion Daily Semiconductor Bear 3X Shares (SOXS) managed by Rafferty Asset Management, LLC.
The Philadelphia Stock Exchange (PHLX)
The PHLX is the oldest stock exchange in the United States. It was acquired by Nasdaq in 2008 and focuses on the trading of options. Its listings include equity options, index options, and foreign exchange options.
The SOX is one of several focused sector indexes created by the PHLX. Other indexes include the PHLX Housing Sector, PHLX Oil Service Sector, PHLX Utility Sector, and the PHLX Gold/Silver Sector Index.
Nasdaq, Inc. "PHLX Semiconductor (SOX): Overview."
Nasdaq, Inc. "Index Methodology."
Nasdaq, Inc. "SOX Index Weighting."
Invesco. "Invesco PHLX Semiconductor ETF."
VanEck. "SMH VanEck Semiconductor ETF."
Direction. "SOXL SOXS"
Nasdaq, Inc. "Nasdaq Index Directory."