SMH outperforms peers with a 71% year-to-date gain as tech giants allocate billions to AI-driven semiconductor infrastructure.
The VanEck Semiconductor ETF (NASDAQ: SMH) has climbed 71% year-to-date through June 16, driven by massive capital expenditures from tech leaders like Microsoft, Amazon, and Alphabet. These companies are investing hundreds of billions in AI infrastructure, with semiconductors as a key component.
SMH tracks the MVIS U.S. Listed Semiconductor 25 index, a market-cap-weighted portfolio of the 25 largest U.S.-listed semiconductor stocks. Nvidia and Taiwan Semiconductor alone account for nearly 25% of the fund, while top holdings like Micron, AMD, and Intel make up nearly half of the portfolio.
Competitors like the iShares Semiconductor ETF (SOXX) use weight caps, diluting exposure to large-cap leaders. SMH’s concentrated approach has delivered a 38% average annual return over the past five years, outpacing broader sector trends.