1) ETF Overview – Key Facts
- Issuer: VanEck
- Inception Date: December 20, 2011
- Benchmark Index: MVIS US Listed Semiconductor 25 Index
→ Tracks 25 of the largest and most liquid semiconductor companies listed in the U.S., including U.S. and international firms. - Expense Ratio: 0.35%
- Dividend Frequency: Annually (typically in December)
- Recent Dividend Yield: ~0.43% (as of 2024)
- Share Price: Approximately $248 (as of May 2025)
- Average Daily Volume: Around 7 million shares
2) Pros 👍 / Cons 👎
👍 Pros
- Concentrated exposure to top semiconductor names: Includes Nvidia, TSMC, Broadcom, and more
- Global reach: Not limited to U.S. firms — also includes TSMC (Taiwan) and ASML (Netherlands)
- High liquidity: Easy to trade with large daily volume
- Simple, large-cap focused portfolio: Easy to understand holdings
👎 Cons
- Limited diversification: Only 25 holdings
- Heavy weighting in top names: Top 5 holdings make up over 50% of the fund
- TSMC exposure via ADR: Involves some foreign taxation/structure risks
- No exposure to big tech like Apple or Microsoft
3) Historical Performance (Annualized Returns)
- 10-Year Average: ~25%
- 5-Year Average: ~28%
- 1-Year Return: ~50%
Source: VanEck, as of May 2025
4) Dividend Growth
Although SMH is not a dividend-focused ETF, payouts have grown over time.
| Year | Annual Dividend |
|---|---|
| 2020 | $0.75 |
| 2021 | $0.79 |
| 2022 | $1.20 |
| 2023 | $1.04 |
| 2024 | $1.07 |
Source: VanEck dividend history
5) Sector Composition – What Each Company Does
SMH holds 25 companies in the semiconductor industry. Here’s a quick breakdown of their roles:
- Nvidia (NVDA) – GPU and AI chip design
- Taiwan Semiconductor (TSMC) – Leading pure-play foundry (contract manufacturing)
- Broadcom (AVGO) – Connectivity and data center chips
- ASML (ASML) – Lithography equipment for chip manufacturing
- Applied Materials (AMAT) – Semiconductor production equipment and services
- AMD (AMD) – CPUs and GPUs
- Qualcomm (QCOM) – Mobile chips and communication technologies
- Analog Devices (ADI) – Analog and mixed-signal chips
- KLA Corp (KLAC) – Process control and inspection equipment
- Texas Instruments (TXN) – Analog chips and embedded processors
- Micron (MU) – Memory chips: DRAM and NAND
- Lam Research (LRCX) – Wafer fabrication equipment
- Intel (INTC) – CPUs and semiconductor manufacturing
- Cadence (CDNS) – Electronic Design Automation (EDA) software
- Synopsys (SNPS) – EDA tools and semiconductor IP
- Marvell (MRVL) – Storage, networking, and connectivity chips
- NXP (NXPI) – Automotive and secure connectivity chips
- Microchip (MCHP) – Microcontrollers and analog solutions
- Monolithic Power Systems (MPWR) – Power management chips
- STMicroelectronics (STM) – Sensors and analog components
- ON Semiconductor (ON) – Power semiconductors and sensors
- Teradyne (TER) – Semiconductor testing equipment
- Skyworks (SWKS) – Wireless connectivity chips
- Qorvo (QRVO) – RF and 5G wireless components
- Universal Display (OLED) – OLED materials and technology
Source: VanEck, ETF.com
6) Rebalancing Info
- Frequency: Quarterly (4 times per year)
- Method: Based on market cap and liquidity, per MVIS index methodology
Real-World Example
- In late 2023, Nvidia’s sharp rise increased its weight significantly
- In 2022, AMD and ASML underperformed, while Broadcom gained a larger share
7) Other Considerations
- Similar but different from SOXX
- SOXX: U.S.-only semiconductor exposure
- SMH: Includes global names like TSMC and ASML
- TSMC ADR: Be aware of potential tax implications and ADR structure
- Higher concentration: More aggressive than broader ETFs like QQQ
8) Final Thoughts
SMH offers focused access to global semiconductor leaders — especially companies like Nvidia, TSMC, and ASML.
It’s a great fit for investors who want to ride the semiconductor wave without picking individual stocks.
That said, SMH’s recent performance was largely driven by Nvidia’s explosive growth. Whether this trend continues is uncertain.
The semiconductor industry is inherently cyclical:
- When demand surges, prices and profits skyrocket
- When oversupply or slowdowns hit, the sector can fall hard
Still, as the backbone of modern tech — AI, smartphones, data centers, EVs, robotics — semiconductors are here to stay.
SMH gives you a way to invest in that backbone directly.
Next Topic Teaser – SMH vs SOXX vs SOXQ
In the next post, I’ll be comparing three major semiconductor ETFs side by side:
- SMH by VanEck
- SOXX by iShares (BlackRock)
- SOXQ by Invesco
We’ll explore the differences in:
- index composition
- expense ratios
- dividend policies
- global exposure
- and overall portfolio structure
If you’ve ever wondered which of these semiconductor ETFs aligns best with your strategy, the next deep dive will help you make that decision with confidence.
9) Disclaimer & Closing Note
Just to be clear — I’m not a financial advisor. I’m simply sharing my personal investing journey here. Please do what feels right for you. 🙂
Thanks for reading — and as always, invest smart and stay consistent.
See you in the next post! 🚀
Step by step — that’s how we build something lasting.
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