🤝 BFF Take
SMH Has Outperformed — More Concentrated in the Giants Like Nvidia
SOXX (iShares Semiconductor ETF) and SMH (VanEck Semiconductor ETF) are both concentrated semiconductor sector ETFs targeting the companies that design and manufacture computer chips. Both charge 0.35%. SOXX tracks the ICE Semiconductor index with ~30 holdings, capping any single stock at 10%. SMH tracks the MVIS US Listed Semiconductor 25 index with only 25 holdings but allows top names to reach 20% of the fund. SMH's higher concentration in Nvidia and TSMC has driven outperformance during periods of mega-cap chip dominance. SOXX's 10% cap means somewhat more equal weighting. Both are high-conviction sector bets with significant individual stock risk — Nvidia alone can be 20% of SMH.
📋 Quick Takeaways
💡SMH allows ~20% in a single stock (often Nvidia); SOXX caps holdings at 10% — different concentration risk
📈SMH has outperformed SOXX in recent years largely due to higher Nvidia concentration during its AI-driven surge
💰Both cost 0.35% — identical expense ratios, so the choice comes down to concentration preference
📊 Data-Based Take: SMH has the lower fee
Whether the lower-cost fund suits your situation depends on your existing holdings, account type, tax situation, and how you use each fund. This is a cost comparison, not a personalized recommendation.
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Reviewed by a CFA® Charterholder · Data updated Jun 2026 · Educational only, not financial advice
SOXX
iShares Semiconductor ETF
SMH
VanEck Semiconductor ETF
📋 SOXX vs SMH — Key Facts Side by Side
| Metric |
SOXX |
SMH |
| Fund Name |
iShares Semiconductor ETF |
VanEck Semiconductor ETF |
| Issuer |
iShares |
VanEck |
| Tracks Index |
ICE Semiconductor Index |
MVIS US Listed Semiconductor 25 |
| Expense Ratio |
0.35% |
0.35% |
| Cost per $10K/yr |
$35.00 |
$35.00 |
| AUM |
$15B |
$22B |
| Holdings |
30 |
25 |
| Inception |
2001 |
2000 |
| 1-Year Return |
+32.40% |
+36.80% |
| 3-Year Return |
+18.60% |
+20.40% |
| 5-Year Return |
+28.80% |
+31.20% |
| Avg Bid-Ask Spread |
0.01% |
0.01% |
Data from ETF BFF database. Returns are annualised. Not investment advice.
📊 SOXX vs SMH — Annualised Returns
Annualised returns (trailing, price-based). Past performance does not guarantee future results.
🎯 Should You Buy SOXX or SMH?
Choose if...
SOXX
- You already use iShares and prefer staying within their fund family
Choose if...
SMH
- You already use VanEck and prefer staying within their fund family
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❓ SOXX vs SMH — Frequently Asked Questions
What is the difference between SOXX and SMH?
Both SOXX and SMH invest in semiconductor companies — chipmakers like Nvidia, TSMC, AMD, Broadcom, ASML, and Qualcomm. SOXX holds ~30 stocks with a 10% maximum single-stock weight. SMH holds ~25 stocks and allows up to ~20% in a single name (typically Nvidia). This means SMH is more concentrated in the largest chip companies, which has driven stronger performance when those names lead.
Why have semiconductor ETFs performed so well recently?
Semiconductors are at the center of the AI boom — Nvidia's H100 and H200 chips power virtually every major AI training workload, and demand has been extraordinary. The entire supply chain (TSMC for manufacturing, ASML for lithography equipment, Broadcom for networking chips) has benefited. This AI-driven demand surge has made semiconductor ETFs among the best-performing sector funds of 2023-2024.
Are SOXX and SMH risky investments?
Yes, significantly. Both are highly concentrated in a single cyclical sector. Semiconductors are famously cyclical — they boom when enterprise and consumer tech spending is strong and bust when inventory accumulates. Both SOXX and SMH fell 40-50% during the 2022 correction and similarly during the 2000-2002 dot-com bust. High potential returns come with correspondingly high volatility.
Should I own SOXX or SMH alongside QQQ?
Given that QQQ already has 8-12% exposure to Nvidia and significant exposure to AMD, Broadcom, and Qualcomm, adding SOXX or SMH significantly doubles down on semiconductor exposure. You'd be creating a portfolio that's materially concentrated in chips specifically. This can be a deliberate AI-themed bet, but investors should understand they're moving well beyond market-cap neutral weighting.
How does SOXX compare to SOXQ (Invesco Semiconductor)?
SOXQ (Invesco PHLX Semiconductor ETF) tracks the PHLX Semiconductor Sector Index — similar to SOXX — at a lower 0.19% expense ratio. For long-term holders looking for semiconductor exposure at lower cost, SOXQ is worth comparing to both SOXX and SMH. SOXQ's lower fee makes it a competitive alternative.
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ℹ️ Data shown is for educational purposes and may not reflect the most current figures. Returns are trailing price-based and exclude dividend reinvestment. Past performance does not guarantee future results. ETF BFF is not a licensed financial advisor — this is not personalized financial advice.