SMH: VanEck Semiconductor ETF

SMH is the VanEck Semiconductor ETF, a concentrated bet on the 25 largest US-listed semiconductor companies. It's heavily weighted toward NVIDIA (~20%) and TSMC (~10%), making it the most direct way to express an AI-infrastructure thesis through a single ticker. Expense ratio of 0.35%.

SMH, listed on NYSE Arca. The official name is VanEck Semiconductor ETF (formerly VanEck Vectors Semiconductor ETF before VanEck dropped the 'Vectors' branding). Issued by Van Eck Associates Corporation.

25 semiconductor companies including NVIDIA (~20.5%), TSMC (~10.5%), Broadcom (~7.6%), AMD (~5.5%), ASML (~4.5%), Applied Materials (~4.4%), Micron (~4.3%), Qualcomm (~4.1%), Texas Instruments (~4.0%), and Lam Research (~3.9%). The top 10 account for ~70% of the fund. Very top-heavy by design.

Both cover US-listed semiconductors at 0.35% expense ratio. SMH (VanEck) is more top-heavy: NVDA and TSM combined are 25-30% of the fund. SOXX (iShares) caps individual weights more aggressively for broader diversification. If you want maximum concentration in the AI infrastructure leaders, SMH. If you want broader semiconductor exposure with less NVDA risk, SOXX. SMH has outperformed in the strongest AI legs because of concentration; SOXX has been less volatile.

0.35% per year. On a $10,000 investment, that's $35/year in fees. Higher than broad market ETFs (VOO, VTI both 0.03%) but in line with other sector-specific ETFs. The expense ratio reflects the narrower universe and active rebalancing required to maintain the 25-stock concentrated structure.

Approximately 0.4% as of early 2026, paid quarterly. Yield is low because semiconductor companies historically reinvest cash flow into R&D and capex rather than dividends. NVIDIA, AMD, and most semi companies pay minimal dividends; TSMC and Broadcom are the meaningful dividend payers in the fund.

SMH trades like any stock during US market hours. Buy it through any broker: Robinhood, Fidelity, Schwab, Public, M1, or any other. Fractional shares supported at most modern brokers. SMH is one of the most-traded thematic ETFs and the standard passive vehicle for concentrated semiconductor exposure.

Approximately $28 billion as of early 2026. SMH has grown substantially since 2023 as AI investment flows have concentrated in semiconductor names. The growth rate has been one of the fastest among sector ETFs.

SMH gives you concentrated exposure to NVIDIA, TSMC, Broadcom, AMD, and the broader semiconductor leaders. It's a more direct AI-infrastructure expression than QQQ (which is broader tech). Walnut isn't an investment adviser; whether SMH fits your portfolio depends on your conviction in the semi cycle and your tolerance for the concentration. Many Walnut users combine SMH as core AI exposure with thematic stock baskets that include adjacent AI infrastructure names (FIX, PWR, VRT) not in SMH.

May 2000. SMH originally launched as a HOLDRS trust (Merrill Lynch) and converted to an ETF structure under VanEck management in 2011. The fund has been a primary vehicle for semiconductor sector exposure for over two decades.

NVIDIA's market cap growth from $300B in 2022 to multi-trillions by 2025 has made it the largest US semiconductor company by a wide margin. SMH's market-cap weighting methodology (with sector concentration caps) has let NVIDIA approach 20% of the fund. The methodology lets concentration grow during market cap appreciation, which is why SMH has outperformed broader semiconductor ETFs during NVIDIA's run.

Yes, at brokers that support fractional ETF purchases: Robinhood, Fidelity, Schwab, Public, M1, and several others. Fractional purchases are useful for SMH because the per-share price has grown along with NVIDIA's market cap; entire shares require a meaningful capital commitment.

Yes. TSMC is the second-largest holding at approximately 10.5%. ASML is approximately 4.5%. Both are US-listed (TSMC via ADR, ASML on Nasdaq) and qualify under SMH's universe of US-listed semiconductors. International exposure through ADRs is part of what makes SMH a comprehensive semi industry vehicle.

SMH's concentration creates higher volatility than broad-market ETFs. The semiconductor cycle has historically swung 30%+ peak-to-trough. Long-term holders accept that volatility for exposure to a structurally growing technology sector. Position sizing matters: 5-15% of total portfolio weight is what most thematic investors use for SMH; concentration above that is high-volatility.