VanEck Semiconductor ETF (SMH) offers concentrated exposure to the US semiconductor sector, directly targeting the onshoring and AI-driven growth thesis. SMH stands out for its high liquidity, US focus (81% holdings), and exclusive large-cap composition, supporting investor confidence amid sector volatility. Despite a 50% YTD share price surge and a 29x PE, SMH remains attractive given robust growth prospects and strong industry tailwinds.
It's been a good year for growth investors. While volatility has taken an upward turn in the past week, with good earnings seemingly no longer able to cause sustained upside moves, there's reason to be concerned that valuations have crept too high.
VanEck Semiconductor ETF remains a buy, outperforming the S&P 500 and peers with strong YTD returns and high liquidity. SMH's heavy weighting in American semiconductor companies positions it to benefit from U.S. policy tailwinds like the CHIPS Act and tariffs. Risks include potential delays in U.S. semiconductor factory buildouts and geopolitical threats to Taiwan, which could disrupt chip supply chains.
| XMUN Exchange | US Country |
The described company operates as an investment fund centered around the semiconductor industry. It commits at least 80% of its total assets to securities that align with its benchmark index, focusing on common stocks and depositary receipts. The scope of investment targets U.S. exchange-listed companies within the semiconductor sector, which includes both medium-sized corporations and international companies listed in the U.S. markets. This fund adopts a non-diversified investment strategy, concentrating its investments in a specific area of the technology sector.
The primary service offered by the fund is investing in securities specific to the semiconductor industry. This includes acquiring common stocks and depositary receipts that are part of the fund's benchmark index. Through these investments, the fund aims to mirror the performance of the semiconductor sector represented by its chosen index.
Investments are primarily focused on companies within the semiconductor industry that are listed on U.S. exchanges. This includes not just U.S.-based companies but also international firms that have their stocks listed in U.S. markets. This strategy provides investors with exposure to the global semiconductor industry while leveraging the regulatory and financial benefits of U.S. market listings.
Among its investment targets, the fund places a significant emphasis on medium-capitalization companies in the semiconductor sector. This approach allows the fund to potentially capture growth opportunities in emerging or rapidly evolving segments of the industry, where such companies frequently operate.