Looking for broad exposure to the Technology - Semiconductors segment of the equity market? You should consider the VanEck Semiconductor ETF (SMH), a passively managed exchange traded fund launched on 12/20/2011.
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 also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Technology - Semiconductors is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.
Index Details
The fund is sponsored by Van Eck. It has amassed assets over $26.24 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
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 0.38%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 21.15% of total assets, followed by Taiwan Semiconductor Manufacturing Co L (TSM) and Broadcom Inc (AVGO).
The top 10 holdings account for about 73.17% of total assets under management.
Performance and Risk
So far this year, SMH return is roughly 14.97%, and was up about 7.97% in the last one year (as of 06/30/2025). During this past 52-week period, the fund has traded between $179.95 and $281.27.
The ETF has a beta of 1.45 and standard deviation of 35.48% 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 an excellent 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 $1.29 billion in assets, iShares Semiconductor ETF has $13.39 billion. XSD has an expense ratio of 0.35% and SOXX charges 0.35%.
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 Reports NVIDIA Corporation (NVDA): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis Report Taiwan Semiconductor Manufacturing Company Ltd. (TSM): Free Stock Analysis Report iShares Semiconductor ETF (SOXX): ETF Research Reports SPDR S&P Semiconductor ETF (XSD): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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