Invesco Semiconductors ETF (PSI) In-Depth Stock Report

Key fund characteristics at a glance. The current price is computed live at page load; the other metrics are sourced from the fund's latest fact sheet or SEC filing.

• A 21-year live track record covering multiple full semiconductor cycles — the longest of any factor-based semiconductor ETF, providing real evidence rather than backtested claims.
• The multi-factor methodology automatically rotates toward improving-momentum names and away from deteriorating ones, providing a systematic discipline that buy-and-hold investors often lack.
• Broad diversification within semiconductors — no single holding exceeds 7%, compared to 20%+ single-name concentration in market-cap-weighted alternatives.
• Equipment and analog exposure (AMAT, LRCX, KLAC, ADI) captures semiconductor capex spending that is less directly tied to any single end-market (AI, auto, mobile) and tends to be higher-margin.

The Invesco Semiconductors ETF (PSI) is a rules-based, multi-factor semiconductor ETF that has been operating since June 2005, making it one of the oldest dedicated semiconductor funds in the market. Unlike market-cap-weighted alternatives (SMH, SOXX), PSI selects and weights its 30 holdings using a Dorsey Wright relative-strength and multi-factor methodology that tilts toward semiconductor companies showing favorable momentum, value, and quality characteristics.

The fund has delivered a 104% YTD return as of early October 2026, closely tracking other semiconductor ETFs during this AI-driven bull market. With $2.38 billion in net assets, PSI is substantially larger than most thematic semiconductor alternatives, though still a fraction of SMH's $14B+ in AUM. Its 0.55% expense ratio sits between the cheapest passive alternatives (SOXQ at 0.19%) and the most expensive active managers (AIS at 0.75%).

PSI's most consequential structural feature is its equal-ish rather than market-cap weighting. While not strictly equal-weighted (the multi-factor methodology creates differentiated weights), no single holding exceeds 7% of assets, and the top 10 represent roughly 52% — compared to SMH, where NVIDIA alone can be 20%+ of the fund. This means PSI captures broader semiconductor sector performance rather than being a leveraged bet on the two or three largest names.

The investment question for PSI is straightforward: does the multi-factor selection methodology, applied over 30 US semiconductor stocks, produce better risk-adjusted returns than a simpler market-cap-weighted or equal-weighted alternative after accounting for the higher expense ratio? With 21 years of live data spanning multiple full semiconductor cycles, PSI has the track record to answer that question with real evidence rather than backtested hypotheticals.

This report examines PSI's methodology, holdings, cost structure, and historical performance through full semiconductor boom-and-bust cycles to help investors determine whether the factor-based approach justifies the fee premium, or whether a cheaper, simpler semiconductor ETF delivers essentially the same outcome over time.

The broader competitive and macro environment PSI operates in — context a pure valuation table can't convey on its own.

The semiconductor ETF landscape has fragmented significantly since PSI launched in 2005. What was once a two- or three-fund choice (PSI, SMH, SOXX) has expanded to include a dozen or more alternatives differentiated by weighting methodology (market-cap, equal-weight, factor-based, actively managed), geographic scope (US-only versus global), and sub-sector focus (broad semiconductor versus memory-only, equipment-only, or AI-thematic).

This fragmentation matters for PSI specifically because its 0.55% expense ratio was competitive when the only alternatives were SOXX (0.35%) and SMH (0.35%). With SOXQ now available at 0.19% from Invesco itself — the same fund family — PSI's higher fee needs to be justified by demonstrably better returns, not just a different methodology label. An investor on the Invesco platform has to actively choose PSI over the cheaper in-house alternative, and the factor-based methodology is the entire case for that choice.

The AI infrastructure buildout that has driven the current semiconductor bull market has also changed what "semiconductor exposure" means in practice. In a market-cap-weighted fund, "semiconductor exposure" is largely NVIDIA and TSMC exposure. In PSI's factor-weighted construction, it's a more diversified bet across equipment, analog, memory, and logic companies — which may or may not be what the investor actually wants when they say they want to invest in the AI trade. This report treats that distinction as a feature-or-bug question that depends on the investor's actual thesis.

PSI tracks the Dorsey Wright Semiconductors Technical Leaders Index, a rules-based methodology that selects 30 US-listed semiconductor companies and weights them using a proprietary relative-strength and multi-factor scoring system. The index reconstitutes quarterly, and the weighting methodology tilts toward companies showing favorable momentum and technical characteristics rather than simply weighting by market capitalization.

The fund's top holdings as of early October 2026 reflect this methodology: Micron (6.6%), NVIDIA (6.3%), Applied Materials (6.2%), Lam Research (5.8%), AMD (5.8%), KLA (5.4%), and Analog Devices (5.3%) are all within a relatively narrow weight band. This is structurally different from SMH, where NVIDIA alone can represent 20%+ of the fund — PSI caps any single name's influence and allows equipment and analog names to carry weights that market-cap-weighting would never assign them.

The fund is 100% US technology stocks by sector classification, with no international holdings, no non-semiconductor companies, and no bonds. This makes it a pure, concentrated bet on the US semiconductor industry — more diversified within semiconductors than a market-cap-weighted alternative, but less diversified across geographies and sectors than a broad tech fund.

A closer look at each reporting segment individually, rather than treating the business as a single undifferentiated revenue line.

The 10 largest positions in PSI, their portfolio weights, and the investment rationale for each — the building blocks that determine where returns actually come from.

How PSI's assets are distributed across the AI and semiconductor value chain — the concentration profile that determines which part of the cycle drives returns.

A side-by-side comparison of PSI against the ETFs an investor would actually be choosing between — the metrics that determine whether you're paying for differentiation or duplication.

What PSI's expense ratio costs you in real dollars over time — the compounding drag that active management must overcome to justify its premium.

PSI's 0.36% fee premium over SOXQ compounds to $353 over 5 years but $7,588 over 20 years on a $10,000 investment at 12% annual returns — the multi-factor methodology must earn that back in net outperformance to justify its existence.

Both PSI and SOXQ are Invesco products: the higher fee is the explicit cost of the Dorsey Wright factor overlay. If PSI doesn't outperform SOXQ net of fees over a full cycle, the factor methodology adds complexity without adding returns.

Historical semiconductor-sector returns have averaged 12–15% annualized over full cycles, which is why we use 12% as the base case rather than the broad-market 10%.

How the fund allocates across its mandate, the cost structure investors bear, and the rebalancing mechanics that drive turnover.

PSI distributes a negligible yield (0.04%), reflecting the fact that most US semiconductor companies prioritize R&D and capex over dividends. The fund's quarterly reconstitution effectively acts as its capital allocation mechanism — positions in deteriorating-momentum names are automatically reduced or eliminated, and capital is redeployed toward improving-momentum names, without the investor needing to make those decisions themselves.

The 0.55% expense ratio is the ongoing cost of this rules-based factor methodology. Against a full-cycle semiconductor return (historically 12–15% annualized), the fee represents a 3.5–4.5% drag on cumulative returns over a decade — meaningful, though less extreme than the 7.5% drag from AIS's 0.75% fee over the same period. Against SOXQ's 0.19%, the additional 0.36% annually must be earned by the factor methodology to justify its existence.

The quarterly reconstitution creates turnover that passive market-cap-weighted funds avoid. This turnover generates trading costs inside the fund that are not captured in the headline expense ratio — the true cost of ownership is slightly higher than 0.55%, and the tax efficiency may be lower than a buy-and-hold market-cap-weighted alternative in a taxable account.

Leadership, incentive alignment, and governance structure — factors that shape execution risk independent of the underlying business model.

PSI is managed by Invesco, one of the largest ETF providers globally, with deep operational infrastructure and a long track record across hundreds of funds. This is a meaningful governance advantage over smaller, newer entrants in the semiconductor ETF space — the operational risk of fund closure, key-person departure, or infrastructure failure is substantially lower than with a startup ETF provider.

The underlying index methodology is designed by Dorsey Wright, a Nasdaq-owned technical analysis and relative-strength research firm. Dorsey Wright's factor-based methodology has been applied across multiple Invesco ETFs (not just PSI), so the approach has a broader track record than this single fund, though its application to semiconductors specifically is unique to PSI.

An important nuance: Invesco also offers SOXQ, a plain-vanilla PHLX Semiconductor Index ETF at 0.19%. The existence of a cheaper in-house alternative is both an honest disclosure (Invesco itself offers a simpler, cheaper semiconductor ETF) and a risk factor for PSI (if Invesco decides to rationalize its ETF lineup, PSI's lower AUM relative to SOXQ makes it the more likely candidate for closure or merger).

Specific, falsifiable triggers — not vague sentiment — that would move us toward or away from the bull case above.

PSI occupies the middle ground of the semiconductor ETF spectrum: more expensive than passive market-cap-weighted alternatives (SMH, SOXQ, SOXX) but cheaper than actively managed thematic funds (AIS). Its factor-based methodology gives it a different portfolio construction from both categories, but the practical question is whether that difference shows up in net returns after fees.

Against SMH and SOXX, PSI's advantage is diversification within semiconductors — no single-name concentration risk, broader exposure to equipment and analog names, and a rules-based momentum filter that automatically exits deteriorating positions. The disadvantage is cost (0.55% versus 0.35% or 0.19%) and the risk that capping NVIDIA costs the fund meaningful upside when the largest name is also the best performer.

Against XSD (SPDR S&P Semiconductor, equal-weighted), PSI's advantage is the multi-factor overlay that goes beyond naive equal weighting. The disadvantage is that the factor methodology may not produce meaningfully different results from equal weighting over a full cycle — if it doesn't, the simpler product is the better one.

With 21 years of live performance data, PSI has the longest track record of any factor-based semiconductor ETF, which is a genuine competitive advantage for due diligence. An investor can examine how the fund performed through the 2008 financial crisis, the 2018–2019 semiconductor downturn, and the 2022 drawdown — that full-cycle evidence is something newer funds simply cannot provide.

A process for using this report, not a recommendation — how to weigh valuation, scenario spread, and your own risk tolerance.

Why this report is different from asking a general-purpose AI chatbot about the fund.

Plain-English definitions for the terms used throughout this report, for readers newer to equity valuation.