Key Points
The VanEck Semiconductor ETF (NASDAQ: SMH), launched in 2011, invests nearly all its assets in 26 semiconductor stocks, with 20% allocated to Nvidia and nearly 11% to Taiwan Semiconductor. Over the past decade, the ETF has averaged returns of almost 31% per year, compared to just over 19% for the Invesco QQQ Trust, despite a significant 34% loss in 2022.
With an expense ratio of 0.35%, the fund is considered a cost-effective option for tech-focused investors willing to accept higher risk for potential market-beating returns. However, investors need a long-term perspective, as the ETF may experience years of negative returns, but historically has outperformed the Nasdaq in terms of positive returns.
Overall, the VanEck ETF offers a way to invest in leading semiconductor stocks with a managed risk profile, making it an attractive choice for those looking to enter the tech investment space.
