What is the PHLX Semiconductor Sector Index (SOX) and what does it include?

SOX definition: the PHLX (Philadelphia Stock Exchange) Semiconductor Sector Index is a modified market-capitalization-weighted index of 30 U.S.-listed companies principally engaged in the semiconductor business — designing, distributing, manufacturing, or selling semiconductor chips and related equipment. Key components: NVIDIA (largest weight, around 20%+ given NVIDIA's dominance in AI chip revenue); TSMC ADR; Broadcom; Intel; Qualcomm; Advanced Micro Devices (AMD); Texas Instruments; Applied Materials; Lam Research; KLA Corporation; Microchip Technology; and others; the index is rebalanced quarterly and weights are capped to prevent any single company from dominating too heavily. Why semiconductors are a useful sector to trade: semiconductors have high cyclicality — the chip industry follows inventory cycles (typically 18-24 month cycles of oversupply and undersupply) that can cause sector-wide declines of 30-50% during downturns; specific macroeconomic events (trade wars, export controls) disproportionately affect semiconductor companies; SOXS provides concentrated exposure to these cycles for tactical traders who want to profit from specific semiconductor downturns. SOXX vs. SOXS: SOXX (iShares Semiconductor ETF) is the long, non-leveraged semiconductor ETF that tracks the ICE Semiconductor Index (slightly different from the SOX); SOXL (Direxion Daily Semiconductor Bull 3X) is the 3x long semiconductor ETF; SOXS is the 3x short/inverse version; these three provide different directional and leverage exposures to the semiconductor sector.

When have inverse technology/semiconductor ETFs been most profitable?

Profitable periods for inverse tech ETFs require sustained, directional sector declines. 2022 technology decline: the Federal Reserve's rapid rate hiking cycle in 2022 particularly hurt technology stocks (whose valuations are sensitive to interest rates); the Nasdaq Composite fell approximately 33% in 2022; semiconductor stocks fell even more (SOX index fell approximately 35%); SOXS and similar inverse semiconductor ETFs generated very large returns during this sustained decline; this is the kind of environment where short-term trading in inverse ETFs could have produced significant profits for disciplined traders who entered and exited appropriately. 2000-2002 dot-com bust: technology stocks fell 80-90% over two years; sustained directional declines of this magnitude are ideal for inverse ETF strategies; however, 2x and 3x inverse ETFs didn't exist in 2000-2002 in their current form. 2008-2009 financial crisis: technology stocks fell approximately 50% in 2008-2009; inverse tech ETFs would have performed well in 2008 but required timing the 2009 recovery exit precisely. COVID March 2020: brief but severe — technology stocks fell approximately 30% in 3-4 weeks; disciplined traders who bought inverse ETFs at the peak and sold at the bottom could have generated significant returns; however, the subsequent recovery was equally sharp, and holders who stayed in inverse positions were crushed. The fundamental challenge: predicting when technology or semiconductor downturns begin, their duration, and when recoveries start requires accurate market timing that is extremely difficult; most retail investors lose money in inverse ETFs because they cannot time entries and exits with the discipline required.

What are the regulatory and practical warnings about inverse/leveraged ETFs?

SEC and FINRA warnings: the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) have both issued investor alerts warning that leveraged and inverse ETFs are not appropriate for long-term investors and may not suit most retail investors; their products' prospectuses explicitly warn that they are designed to achieve their stated objectives for one trading day only and that results over longer periods may differ significantly from the stated multiple; some broker-dealers require investors to acknowledge these risks before purchasing leveraged/inverse ETFs; some have minimum net worth or income requirements. Daily reset mechanism: all leveraged and inverse ETFs use derivatives (swap agreements, futures) that are reset daily to maintain the target leverage ratio; this daily reset is what creates the compounding effect and volatility decay described above; there is no alternative to daily reset for exchange-traded leveraged products. Position sizing: sophisticated traders using inverse/leveraged ETFs limit their position size to a small fraction of total portfolio value; a commonly cited guideline is 1-5% of portfolio maximum in leveraged/inverse ETFs; the leverage itself provides sufficient amplification without risking the entire portfolio; using inverse ETFs as more than a small tactical position substantially increases the risk of catastrophic loss. Tax treatment: leveraged and inverse ETFs may have complex tax treatment; gains from index futures held within the fund are subject to a 60/40 split (60% long-term, 40% short-term capital gains regardless of holding period) under Section 1256; investors should consult tax advisors for specific guidance on their leveraged/inverse ETF tax obligations.

brimindinvest.com / compare / rew-vs-soxsLIVE

REW

ProShares UltraShort Technology ETF · ETF - 2x Inverse Daily Technology (Short-Term Trading Tool)

$12.40

+0.12% this month

VERSUS

⟷

COMPARE

SOXS

Direxion Daily Semiconductor Bear 3X Shares ETF · ETF - 3x Inverse Daily Semiconductor (Short-Term Trading Tool)

$4.50

-19.99% this month

Scoreboard verdict

Across expense ratio, momentum, yield, fund size, risk

REW

2

SOXS

3

SOXS LEADS 3/5

Comparison scoreboard

SOXS LEADS 3/5

Exp. Ratio

REW ✓0.95%

SOXS 1.00%

1Y Return

REW ✓-54.48%

SOXS -96.84%

Div. Yield

REW 9.46%

SOXS ✓70.00%

AUM

REW $2.76M

SOXS ✓$1.26B

Beta

REW -2.54

SOXS ✓-4.69

Metrics last refreshed: 7/9/2026

Quick take

REW vs SOXS ETF Comparison: AI Score, Valuation, Performance and Upside

REW (ProShares UltraShort Technology ETF) and SOXS (Direxion Daily Semiconductor Bear 3X Shares ETF) are both inverse/leveraged ETFs for short-term traders seeking to profit from technology sector declines — REW offers -2x daily technology sector exposure for broad tech shorts, while SOXS offers -3x daily semiconductor sector exposure for concentrated chip sector shorts, both requiring daily monitoring and short holding periods due to volatility decay that destroys value over time.

REW vs SOXS is 2x inverse broad technology sector daily trading tool (ProShares' -200% Dow Jones U.S. Technology Index daily return, broader tech hedge with less leverage than SOXS — still subject to severe volatility decay beyond days-scale holding) versus 3x inverse semiconductor-specific daily trading tool (Direxion's -300% PHLX SOX daily return, maximum semiconductor downside leverage — extremely severe compounding decay, appropriate only for same-day or at most 2-3 day holding periods).

Live analysis · updated 7/9/2026

SOXS holds the edge across 3 of 5 key metrics in this comparison. REW has delivered stronger 1-year price return (-54.48% vs -96.84% for SOXS).

Normalized 1Y performance

REW

SOXS

Recent returns

REW

SOXS

Who should consider this stock?

REW may suit traders who:

→Need short-term (1-3 day) inverse exposure to the broad technology sector during anticipated technology sector sell-offs with a 2x leverage factor that is more moderate than 3x alternatives
→Want a broad technology sector hedge that covers the entire Dow Jones U.S. Technology Index rather than the semiconductor-specific exposure of SOXS
→Have clear entry/exit criteria and daily monitoring capability required for responsible inverse ETF use

SOXS may suit traders who:

→Need maximum (3x) inverse leverage for short-term bets specifically against the semiconductor sector during inventory cycle downturns, export control events, or specific periods of semiconductor demand weakness
→Want concentrated semiconductor sector inverse exposure (NVIDIA, AMD, Broadcom, Intel) rather than the broader technology index covered by REW
→Have sophisticated trading discipline, daily monitoring, and strict position sizing for extreme triple-leveraged inverse exposure that can experience catastrophic losses if held during semiconductor recoveries

Performance & AI score

Metric	REW	SOXS
ETF score	20.6	20.0
Latest close	$12.40	$4.50
1M return	+0.12%	-19.99%
6M return	-40.15%	-90.37%
1Y return	-54.48%	-96.84%

$10,000 invested — hypothetical growth (dividends reinvested)

How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?

Period	REW	SOXS
1Y ago	$4.81K (-51.9%) started 2025-07-08	$329.15 (-96.7%) started 2025-07-08
5Y ago	$1.2K (-88.0%) started 2021-07-08	$3.93 (-100.0%) started 2021-07-08
10Y ago	$34.85 (-99.7%) started 2016-07-08	$0 (-100.0%) started 2016-07-08

Hypothetical — past performance does not guarantee future results.

Fund characteristics

Metric	REW	SOXS
Expense ratio	0.95%	1.00%
Total assets (AUM)	$2.76M	$1.26B
Dividend yield	9.46%	70.00%
Trailing P/E	N/A	N/A
Beta	-2.54	-4.69
52-week change	-54.48%	-96.84%

Risk & fund metrics

Metric	REW	SOXS
1Y return	-54.48%	-96.84%
6M return	-40.15%	-90.37%
1M return	+0.12%	-19.99%
1Y Sharpe ratio	-1.46	-2.19
Beta	-2.54	-4.69
Dividend yield	9.46%	70.00%
5Y CAGR	-37.01%	-79.84%

Drawdown & downside risk

Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.

1Y risk snapshot

REW max drawdown60.41%

SOXS max drawdown97.89%

REW max wkly drop17.54%

SOXS max wkly drop38.16%

5Y risk snapshot

REW max drawdown93.62%

SOXS max drawdown99.98%

REW max wkly drop24.83%

SOXS max wkly drop50.89%

10Y risk snapshot

REW max drawdown99.75%

SOXS max drawdown100.00%

REW max wkly drop28.74%

SOXS max wkly drop50.89%

Performance metrics by period

Period	Metric	REW	SOXS
1Y	Growth	-54.48%	-96.84%
	CAGR	-54.51%	-96.85%
	Sharpe ratio	-1.46	-2.19
	Max drawdown	60.41%	97.89%
	Max daily drop	8.56%	24.35%
	Max wkly drop	17.54%	38.16%
5Y	Growth	-90.08%	-99.97%
	CAGR	-37.01%	-79.84%
	Sharpe ratio	-0.70	-0.88
	Max drawdown	93.62%	99.98%
	Max daily drop	26.52%	55.98%
	Max wkly drop	24.83%	50.89%
10Y	Growth	-99.72%	-100.00%
	CAGR	-44.44%	-79.00%
	Sharpe ratio	-1.04	-1.04
	Max drawdown	99.75%	100.00%
	Max daily drop	26.52%	55.98%
	Max wkly drop	28.74%	50.89%

Fund overview

Category	REW	SOXS
Fund name	ProShares UltraShort Technology	Direxion Daily Semiconductor Bear 3X Shares
Type	ETF	ETF
Expense ratio	0.95%	1.00%
Total assets (AUM)	$2.76M	$1.26B
Dividend yield	9.46%	70.00%

REW strengths

→Broad technology sector inverse exposure provides hedging against a diversified technology equity portfolio — REW targets the entire Dow Jones U.S. Technology Index (covering hundreds of tech companies), making it a broad hedge against technology sector declines vs. single-stock short selling
→2x leverage amplifies inverse returns for smaller capital commitment — getting -2x inverse technology exposure with REW requires less capital than short-selling double the position size in individual technology stocks
→ProShares offers extensive experience and track record in leveraged and inverse ETF products — ProShares is the most established U.S. leveraged/inverse ETF provider with transparent daily disclosure of swap counterparties and derivatives exposure

SOXS strengths

→3x leverage amplifies semiconductor inverse returns — SOXS provides triple inverse semiconductor exposure with minimal capital commitment; during sharp semiconductor sector declines, SOXS can generate very large single-day returns
→Semiconductor-focused inverse exposure targets a sector with high cyclicality and identifiable down-cycle periods — semiconductor stocks follow inventory cycles (often 12-18 months) with sharp declines during oversupply phases; SOXS provides concentrated inverse exposure to these cycles
→Highly liquid with active options market — SOXS and its counterpart SOXL (3x long semiconductor) are among the most heavily traded ETFs; active options market allows sophisticated traders to use SOXS options for defined-risk inverse semiconductor strategies

Risks to watch — REW

→Volatility decay (beta slippage) erodes value over time — in a volatile but directionless market, REW loses value every day due to the daily reset; if technology stocks go up 5% then down 5% on consecutive days, REW does not return to its starting value; this compounding effect means extended holding destroys capital regardless of market direction
→REW is designed for days, not weeks or months — ProShares explicitly states in REW's prospectus that the fund is designed for short-term trading only; long-term holders who experienced the 2020-2021 technology bull market while holding inverse tech ETFs suffered catastrophic losses
→Significant capital requirements and monitoring for appropriate use — inverse leveraged ETFs require daily monitoring, clear exit strategies, and the discipline to close positions quickly; using REW without active management almost certainly produces poor long-term outcomes

Risks to watch — SOXS

→3x daily reset creates extremely severe volatility decay — with 3x leverage, the compounding decay effect is dramatically worse than 2x funds; a semiconductor index that falls 10% then rises 10% results in SOXS returns far below -3x the cumulative return; SOXS degrades rapidly in anything other than a sustained, uninterrupted downtrend
→Semiconductor sector is particularly cyclical and mean-reverting — chips cycles are painful but the sector has historically recovered; holding SOXS through a recovery phase can wipe out gains made during the decline
→Complete loss of capital is realistic — if held through a significant semiconductor bull phase, SOXS holders can lose nearly 100% of their investment; the asymmetric compounding of 3x leverage makes gains temporary and losses permanent without active management

Frequently asked questions

Volatility decay definition: volatility decay (also called beta slippage or compounding decay) is the mathematical phenomenon by which daily-rebalanced leveraged and inverse ETFs lose value over time relative to a simple multiple of the underlying index's cumulative return, due to the arithmetic of compounding. Simple example: suppose a 2x inverse ETF ($100 starting value) tracks an index that goes: Day 1 — index up 10% → inverse ETF loses 20% → ETF value = $80; Day 2 — index down 10% → inverse ETF gains 20% → ETF value = $96; the index returned to approximately $99 (down 1% overall from $100 to $99); the 2x inverse ETF returned from $100 to $96 — a -4% return even though the index only fell 1%; the -4% vs expected -2% (2x of -1%) is volatility decay. Why this happens mathematically: the daily percentage return is calculated on an ever-changing base; losses come out of a smaller base while gains start from a smaller base; in volatile, directionless markets, this compounding creates persistent value erosion in both leveraged long and leveraged inverse ETFs. Real-world impact: over weeks or months, in a volatile but directionless market, a 2x inverse ETF can lose 20-40% of value even if the underlying index finishes near its starting level; 3x inverse ETFs like SOXS experience this decay at catastrophic rates; the only scenario where leveraged/inverse ETFs perform as expected is a monotonic (one-directional) move over the holding period — sustained, uninterrupted trends.

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