You probably don’t think of trucks, refrigerators, or LED lightbulbs as high-tech devices, but all of them require one component to function: Semiconductors. Across industries from health care and transportation to clean energy and artificial intelligence, technological advances have made semiconductors one of the most important – and under-appreciated, components on the planet. The PHLX Semiconductor Sector Index (SOX) has become one of the best-known and most widely tracked subsector indexes. Launched in 1993, this index consists of the top 30 securities by market capitalization in the semiconductor industry, as defined by ICB’s subsector classification
The Nasdaq Biotechnology Index (NBI) launched in 1993, when the industry was still in the midst of the original “biotech revolution”. Since then, its constituent basket has swelled from roughly 100 components to 274, reflecting the tremendous growth in the sector taking place within the small cap space – the overwhelming majority of which has stemmed from IPOs on the Nasdaq Stock Exchange.
As the biotech industry, and the Nasdaq Biotechnology Index, enter a new phase of growth, it’s more important than ever for investors to consider holding a meaningful allocation to this core sector.