Launched on December 20, 2011, the VanEck Semiconductor ETF (SMH) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Semiconductors segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Semiconductors is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
Index Details
The fund is sponsored by Van Eck. It has amassed assets over $36.81 billion, making it one of the largest ETFs attempting to match the performance of the Technology - Semiconductors segment of the equity market. SMH seeks to match the performance of the MVIS US Listed Semiconductor 25 Index before fees and expenses.
The MVIS US Listed Semiconductor 25 Index tracks the overall performance of companies involved in semiconductor production and equipment.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.29%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 18.53% of total assets, followed by Taiwan Semiconductor Manufacturing Co L (TSM) and Broadcom Inc (AVGO).
The top 10 holdings account for about 74.06% of total assets under management.
Performance and Risk
Year-to-date, the VanEck Semiconductor ETF return is roughly 51.17% so far, and it's up approximately 50.02% over the last 12 months (as of 11/04/2025). SMH has traded between $179.95 and $368.61 in this past 52-week period.
The ETF has a beta of 1.54 and standard deviation of 33.99% for the trailing three-year period, making it a high risk choice in the space. With about 27 holdings, it has more concentrated exposure than peers.
Alternatives
VanEck Semiconductor ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SMH is a great option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
SPDR S&P Semiconductor ETF (XSD) tracks S&P Semiconductor Select Industry Index and the iShares Semiconductor ETF (SOXX) tracks PHLX SOX Semiconductor Sector Index. SPDR S&P Semiconductor ETF has $1.81 billion in assets, iShares Semiconductor ETF has $16.50 billion. XSD has an expense ratio of 0.35%, and SOXX charges 0.34%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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VanEck Semiconductor ETF (SMH): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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