Most U.S. semiconductor ETFs focus on the same 30 semiconductor stocks, varying primarily in their … [+]
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Semiconductor stocks outpaced the S&P 500 in 2024. The momentum will likely continue as global AI infrastructure spending keeps those chipmakers busy. The recently announced Stargate project funded by OpenAI, SoftBank, Oracle and MGX is an example. Stargate is slated to pour $500 billion into AI data centers over the next four years.
Despite China’s recent announcement about its DeepSeek technology, semiconductor stocks still have bright futures. A diversified semiconductor ETF is a smart choice if you are new to this space. Below, you will meet six high-performing semiconductor funds—one of which could fit nicely in your ETF portfolio.
How These Semiconductor ETFs Were Picked
The universe of semiconductor ETFs is small. There are about two dozen of them in total. The list shrinks to about 10 when you exclude leveraged and inverse funds.
Leverage funds use debt to amplify returns, but this also increases risk. Inverse funds produce the opposite return of an underlying index. So, if a semiconductor index rises 10%, the inverse ETF would lose 10%. Because leveraged and inverse funds are too risky for most investors, they are excluded from this list.
The 10 remaining funds were sorted on their one-year total returns. Total return includes appreciation and dividends. None are dividend ETFs per se, but they do pay small yields. The list of 10 was then trimmed to the top six semiconductor ETFs, ordered from highest to lowest return.
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6 Semiconductor ETFs To Buy In 2025
The table below introduces six semiconductor ETFs with total one-year returns ranging from 11.89% to 39.69%.
Read on for an overview of each semiconductor fund. Metrics are current as of January 27 after close of trading. For more investing ideas, see best ETFs for 2025 and income investing ETFs.
1. VanEck Semiconductor ETF (SMH)
- Assets under management: $25.8 billion
- NAV: $261.58
- One-year total return: 39.69%
- Gross expense ratio: 0.35%
- Inception date: 12-20-2011
- Annualized return since inception: 25.33%
- Dividend yield: 0.44%
VanEck Semiconductor ETF Overview
SMH tracks the results of the MVIS U.S. Listed Semiconductor Index. The index and the fund include the 25 largest U.S. exchange-traded stocks that generate 50% or more of their revenues from semiconductors. The stocks are market-cap-weighted with a maximum weighting of 20%.
Why SMH ETF?
VanEck’s semiconductor ETF is the only pick on this list tracking the MVIS domestic semiconductor index. It is also the only fund that returned more than 30% to its shareholders over the last year.
The secret is the aggressive weighting of Nvidia (NVDA) at 19.19% and Taiwan Semiconductor (TSM) at 12.96%. This one-two punch of semiconductor stocks has delivered huge gains over the past year, but the combination is risky. Nvidia is TSM’s second-largest customer, so the companies’ futures are linked.
This ETF bets heavily that Nvidia and, by association, TSM will continue monetizing the AI buildout. If Nvidia stumbles, you might regret the fund’s high concentration of those two stocks.
2. Columbia Semiconductor and Technology ETF (SEMI)
- Assets under management: $39 million
- NAV: $27.69
- One-year total return: 21.89%
- Gross expense ratio: 0.76%
- Inception date: 03-29-2022
- Annualized return since inception: 10.50%
- Dividend yield: 0.96%
Columbia Semiconductor and Technology ETF Overview
The Columbia ETF is an actively managed fund that invests in semiconductor companies with promising, long-term growth potential. Selection factors include the quality of the management team and intellectual property. Stocks in the portfolio are weighted by conviction—so the highest-potential securities, as determined by fund manager analysis, are held in the largest quantities.
Why SEMI ETF?
The stocks in the SEMI portfolio are picked by humans who continually research and analyze the semiconductor space. Other ETFs on this list use an index to define their holdings. The human component creates the potential to beat index performance. The trade-off is a higher expense ratio since actively managed funds are more expensive to operate.
Nvidia and Broadcom are the two largest holdings. Combined, they account for more than 40% of this fund’s portfolio.
To date, SEMI’s returns have been competitive but not segment-leading.
3. Strive U.S. Semiconductor ETF (SHOC)
- Assets under management: $85 million
- NAV: $49.25
- One-year total return: 21.33%
- Gross expense ratio: 0.40%
- Inception date: 10-06-2022
- Annualized return since inception: 31.75%
- Dividend yield: 0.35%
Strive U.S. Semiconductor ETF Overview
Strive’s semiconductor ETF tracks the Bloomberg U.S. Listed Semiconductors Select Total Return Index. The index and fund include the top 30 semiconductor stocks weighted with a modified market cap formula. The maximum weighting is 22.5% and the cumulative weight of stocks comprising more than 4.5% of the index is capped at 45%.
Why SHOC ETF?
Strive’s fund was launched in October 2022, making it the youngest fund on this list. It has the highest average annual return since inception, partially due to good timing. The fund launched just as tech stocks started rebounding from a tough 2022.
SHOC has benefited from high concentrations in Nvidia and Broadcom. The fund currently holds these stocks at 20.02% and 17.57%, respectively. ASML Holding NV (ASML) is also a top holding at 8.98%. The remaining positions are weighted at 4.5% or lower.
4. SPDR S&P Semiconductor ETF (XSD)
- Assets under management: $1.5 billion
- NAV: $263.73
- One-year total return: 16.92%
- Gross expense ratio: 0.35%
- Inception date: 01-31-2006
- Annualized return since inception: 13.17%
- Dividend yield: 0.20%
SPDR S&P Semiconductor ETF Overview
The SPDR S&P Semiconductor ETF tracks an index of semiconductor stocks in the S&P Total Market Index. As of January 2025, there are 41 companies in the index and the fund, and individual weightings are capped at 4.5%.
Why XSD ETF?
The SPDR semiconductor fund includes large, mid and small cap stocks using a modified equal-weighting system. With a larger portfolio and an exposure limit of 4.5% on any one security, XSD is the most balanced of the funds on this list. Broadcom is the largest holding at 3.93%, while Nvidia is the 12th largest position at 3.01%.
This fund is a nice choice for investors who want diversified exposure to smaller semiconductor stocks such as Diodes Incorporated (DIOD) and Ambarella (AMBA).
5. Invesco Semiconductors ETF (PSI)
- Assets under management: $802 million
- NAV: $56.57
- One-year total return: 12.43%
- Gross expense ratio: 0.50%
- Inception date: 10-23-2005
- Annualized return since inception: 13.92%
- Dividend yield: 0.18%
Invesco Semiconductors ETF Overview
Invesco’s original semiconductor ETF, PSI, tracks the Dynamic Semiconductor Intellidex℠ Index. Intellidex indexes identify companies with high capital gains potential by analyzing price and earnings momentum, quality, management and value. The index and fund use a modified equal-weighting system so individual stock exposures have a limited range of 1.74% to 6.47%.
Why PSI ETF?
PSI’s modified equal-weighting system reduces over-concentration risk in mega-tech stocks Nvidia and Broadcom (AVGO). Broadcom is the fund’s top holding, weighted at 6.73%, and Nvidia is number five, weighted at 4.76%. This weighting system removes Nvidia’s dominance and allows smaller companies more influence over the group’s performance.
PSI has delivered solid growth in the past year, without relying on one or two tickers. This fund is a good choice for investors wanting more balanced exposure to the semiconductor space.
6. Invesco PHLX Semiconductor ETF (SOXQ)
- Assets under management: $493 million
- NAV: $38.19
- One-year total return: 11.89%
- Gross expense ratio: 0.19%
- Inception date: 06-11-2021
- Annualized return since inception: 14.55%
- Dividend yield: 0.64%
Invesco PHLX Semiconductor ETF Overview
PHLX is Invesco’s newer semiconductor ETF, launched in 2021. The fund tracks the PHLX Semiconductor Sector Index, which includes the largest, U.S.-listed 30 semiconductor stocks. The stocks are weighted by market capitalization with some limitations. For example, the top three positions cannot exceed 12%, 10% and 8%, respectively.
Why SOXQ ETF?
SOXQ has the lowest expense ratio and the second-highest dividend yield among the ETFs here. The fund’s weighting system moderates over-concentration risk while allowing the big players some room to carry the portfolio’s performance. SOXQ also includes 4.45% exposure to Taiwan Semiconductor, which is left out of several other funds.
Bottom Line
Most U.S. semiconductor ETFs focus on the same 30 semiconductor stocks, varying primarily in their weighting methodologies. Market-weighted funds depend on the biggest companies, while equal-weighted funds capture more growth from smaller companies.
Your risk tolerance and investing philosophy can reveal which strategy suits you best. Do you believe in letting growth stocks run? If yes, then choose a market-weighted fund. If you worry that ever-rising stock prices may ultimately retreat, opt for equal weighting.