Ten years ago, the semiconductor industry looked nothing like it does now.
The artificial intelligence (AI) boom was still years away, and there was no talk of megacap tech companies spending tens of billions of dollars on AI development
Investors in the VanEck Semiconductor ETF (NASDAQ: SMH) 10 years ago may not have known that was coming. But their brokerage account balances sure benefited from it. Over that time frame, this ETF has produced a total return of 1,930%, which translates to roughly 35% annually.
That means a $1,000 investment made 10 years ago with dividends reinvested (which are virtually non-existent) would be worth approximately $20,300. Over that same time frame, the Vanguard S&P 500 ETF earned 14.9% annually, while the Invesco QQQ ETF did approximately 20.6%. That performance illustrates the potential upside of investing in the right sector at the right time.