Should You Invest in the VanEck Semiconductor ETF (SMH)?
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 the 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. 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 a 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.
