VanEck Semiconductor ETF (SMH): Complete Beginner's Guide
VanEck Semiconductor ETF (SMH) is a semiconductors ETF from VanEck with an expense ratio of 0.35% and $20.0B in assets under management. Our Beginner Suitability Score: 7/10 (Moderate). 5-year annualized return: 29.80%.
Last updated: April 2026
VanEck • Semiconductors
Expense Ratio
0.35%
AUM
$20.0B
Dividend Yield
0.50%
Inception
2011
Beginner Score
7/10
What is VanEck Semiconductor ETF?
SMH tracks the MVIS US Listed Semiconductor 25 Index, holding the 25 largest and most liquid semiconductor companies. Unlike SOXX, SMH is market-cap-weighted, which gives more influence to the biggest chipmakers like NVIDIA and TSMC. Beginners choosing between SMH and SOXX should know that SMH is more concentrated in mega-cap chip stocks, which has driven its stronger performance during the AI boom.
SMH is managed by VanEck and has been available since 2011. With $20.0B in assets under management, it's a well-established fund with strong institutional backing. The fund charges an expense ratio of 0.35%, which means for every $10,000 you invest, you pay approximately $35 per year in management fees.
SMH at a Glance — Key Metrics
| Expense Ratio | 0.35% |
| Total Holdings | 25 |
| P/E Ratio | 32.0 |
| Beta | 1.38 |
| Dividend Yield | 0.50% |
| AUM | $20.0B |
| Inception Year | 2011 |
| Issuer | VanEck |
Top 10 Holdings in SMH
SMH holds 25 different securities. Here are the largest positions that make up the core of this fund:
| # | Company | Ticker | Weight |
|---|---|---|---|
| 1 | NVIDIA Corp. | NVDA | 19.80% |
| 2 | Taiwan Semiconductor Mfg. | TSM | 11.80% |
| 3 | Broadcom Inc. | AVGO | 8.20% |
| 4 | Advanced Micro Devices Inc. | AMD | 5.50% |
| 5 | Qualcomm Inc. | QCOM | 4.80% |
| 6 | Texas Instruments Inc. | TXN | 4.50% |
| 7 | Applied Materials Inc. | AMAT | 4.20% |
| 8 | ASML Holding NV | ASML | 4.00% |
| 9 | Lam Research Corp. | LRCX | 3.80% |
| 10 | Intel Corp. | INTC | 3.20% |
SMH's top holding is NVIDIA Corp. (NVDA) at 19.80%, followed by Taiwan Semiconductor Mfg. (TSM) at 11.80% and Broadcom Inc. (AVGO) at 8.20%. The top 10 holdings account for 69.80% of the fund's 25 total positions.
View data table
| Rank | Company | Ticker | Weight |
|---|---|---|---|
| 1 | NVIDIA Corp. | NVDA | 19.80% |
| 2 | Taiwan Semiconductor Mfg. | TSM | 11.80% |
| 3 | Broadcom Inc. | AVGO | 8.20% |
| 4 | Advanced Micro Devices Inc. | AMD | 5.50% |
| 5 | Qualcomm Inc. | QCOM | 4.80% |
| 6 | Texas Instruments Inc. | TXN | 4.50% |
| 7 | Applied Materials Inc. | AMAT | 4.20% |
| 8 | ASML Holding NV | ASML | 4.00% |
| 9 | Lam Research Corp. | LRCX | 3.80% |
| 10 | Intel Corp. | INTC | 3.20% |
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SMH Performance History
Here's how SMH has performed over different time periods. Remember that past performance doesn't guarantee future results, but it gives you a sense of the fund's track record:
YTD
4.50%
1 Year
41.50%
3 Year
21.50%
5 Year
29.80%
10 Year
25.80%
SMH has returned 29.80% annualized over 5 years and 25.80% over 10 years. YTD return is 4.50%.
View data table
| Period | Return |
|---|---|
| YTD | 4.50% |
| 1 Year | 41.50% |
| 3 Year | 21.50% |
| 5 Year | 29.80% |
| 10 Year | 25.80% |
Beginner Suitability Score: 7/10
Our proprietary Beginner Suitability Score evaluates ETFs based on five factors that matter most to new investors: fees, volatility, diversification, dividend history, and track record length.
SMH scores 7/10 because it has very low fees, can be more volatile than the broader market, focuses on 25 selected holdings, and has been available since 2011, giving it a proven track record.
How to Buy SMH — Step by Step
- Open a brokerage account — We recommend Fidelity, Charles Schwab, or Vanguard for ETF investing. All offer $0 commissions on ETF trades.
- Fund your account — Transfer money from your bank. You can start with as little as $1 if your broker offers fractional shares.
- Search for "SMH" — Use the search bar in your brokerage platform to find VanEck Semiconductor ETF.
- Place your order — Choose "Market Order" for simplicity or "Limit Order" if you want to set a specific price. Enter how many shares (or dollar amount) you want to buy.
- Set up automatic investing — Most brokers let you schedule recurring purchases (e.g., $100/month on the 1st). This is dollar cost averaging in action.
SMH Sector Allocation
Here's how SMH distributes its investments across different sectors of the economy:
SMH's largest sector allocation is Semiconductor Design at 44.8%, followed by Semiconductor Equipment at 17.2% and Integrated Circuits at 13.5%.
View data table
| Sector | Weight |
|---|---|
| Semiconductor Design | 44.8% |
| Semiconductor Equipment | 17.2% |
| Integrated Circuits | 13.5% |
| Foundry & Manufacturing | 9.8% |
| Memory & Storage | 6.5% |
| Analog Semiconductors | 4.8% |
| Specialty Semiconductors | 2.2% |
| Other Semiconductor | 1.2% |
Dollar Cost Averaging Into SMH
Here's what consistent monthly investing could look like over time, assuming an average annual return of 8% (approximate historical stock market average):
| Monthly | 10 Years | 20 Years | 30 Years |
|---|---|---|---|
| $100/mo | $18,417 | $59,295 | $150,030 |
| $250/mo | $46,041 | $148,237 | $375,074 |
| $500/mo | $92,083 | $296,474 | $750,148 |
*Projections assume 8% average annual return with monthly compounding. Actual returns will vary. Past performance doesn't guarantee future results.
Fee impact: With SMH's expense ratio of 0.35%, a $10,000 investment would lose approximately $2,930 to fees over 20 years compared to a zero-fee investment. This is significant — consider whether the fund's strategy justifies these costs.
SMH's expense ratio of 0.35% costs $2,930 on a $10,000 investment over 20 years (assuming 8% annual return). Without fees, the investment would grow to $46,610 instead of $43,680.
View data table
| Year | Without Fees | With Fees | Fee Cost |
|---|---|---|---|
| 0 | $10,000 | $10,000 | $0 |
| 5 | $14,693 | $14,457 | $236 |
| 10 | $21,589 | $20,900 | $689 |
| 15 | $31,722 | $30,214 | $1,508 |
| 20 | $46,610 | $43,680 | $2,930 |
Pros and Cons of SMH
Pros
- ✓Includes TSMC and ASML, two critical non-U.S. semiconductor leaders absent from SOXX
- ✓Cap-weighted structure lets winners like NVIDIA grow to a larger share, amplifying AI-driven gains
- ✓Larger asset base than SOXX provides strong liquidity and tight bid-ask spreads
- ✓Outstanding long-term returns driven by the insatiable global demand for semiconductor chips
Cons
- ✗NVIDIA alone makes up nearly 20% of the fund, creating massive single-stock concentration risk
- ✗Even more volatile than SOXX due to heavier weighting in the most momentum-driven chip stocks
- ✗Only 25 holdings means minimal diversification and high sensitivity to any single company's earnings
SMH vs Similar ETFs
See how SMH stacks up against similar funds:
Frequently Asked Questions
Is SMH a good ETF for beginners?▾
SMH has a Beginner Suitability Score of 7/10 on our scale. This makes it a strong choice for new investors due to its low fees and focused strategy.
What is the expense ratio of SMH?▾
SMH has an expense ratio of 0.35%. This means for every $10,000 you invest, you pay approximately $35 per year in fees. This is considered very low and cost-efficient.
How much money do I need to invest in SMH?▾
You can invest in SMH with as little as $1 through brokers that offer fractional shares (like Fidelity, Schwab, or Robinhood). There is no minimum investment required beyond the share price itself, which changes daily. Dollar cost averaging — investing a fixed amount regularly — is a popular strategy.
Does SMH pay dividends?▾
Yes, SMH pays dividends with a current yield of approximately 0.50%. Dividends are typically paid quarterly and can be reinvested automatically through most brokers.
What are the top holdings in SMH?▾
The top holdings in SMH include NVIDIA Corp. (19.80%), Taiwan Semiconductor Mfg. (11.80%), Broadcom Inc. (8.20%), and more. The fund holds 25 total positions, providing focused exposure to selected companies.
What sectors does SMH invest in?▾
SMH's largest sector allocations are Semiconductor Design (44.80%), Semiconductor Equipment (17.20%), Integrated Circuits (13.50%). This sector distribution shows a focus on semiconductor design stocks.
How much do SMH's fees cost over time?▾
With an expense ratio of 0.35%, a $10,000 investment in SMH would lose approximately $2,930 to fees over 20 years (assuming 8% annual returns). Consider whether the fund's strategy justifies these costs.