ETF Face-Offs Show Chip Funds Surging as Small-Cap Value Outruns Mid-Cap Peers

Overview

• Semiconductor specialist SOXX delivered a one-year gain that topped 140% with a higher beta of 1.73 and a five-year drawdown of 45.8%, underscoring how concentrated chip exposure can supercharge gains and losses.
• Small-cap value funds beat mid-cap value in the past year as SLYV rose 43.4% and IWN gained 44.9% versus 25% to 26.5% for IJJ, though small caps showed deeper five-year drawdowns up to 28.7% compared with 22.7% for the mid-cap fund.
• Fees emerged as a clear divider with XLK at 0.08% versus IYW at 0.38% in tech and VBR at 0.05% versus IJJ at 0.18% in value, which can compound into large differences in long-term net returns.
• Diversification varied widely as Schwab’s SCHA spread risk across about 1,728 holdings and posted a 44.1% one-year return, while State Street’s SPSM held 607 names with a 38.7% gain at a slightly lower 0.03% fee.
• Index scope shaped what investors actually own since IYW includes Alphabet through a broader tech screen, XLK stays within S&P 500 technology stocks, and SOXX concentrates on only 30 chipmakers, which affects overlap, risk, and where returns come from.