Nvidia is nearly a fifth of the VanEck Semiconductor ETF
The fund sets a 20% cap on exposure to any single holding and rebalances every quarter. Nvidia is now just under that cap.
Key takeaways
Investors in the VanEck Semiconductor ETF SMH, a focused fund of 25 companies, may want to keep an eye on their high concentration. Nearly 20% of fund assets is now sitting in a single holding: Nvidia. The fund now has about 29% of its assets in just two stocks, the other being Taiwan Semiconductor Manufacturing Co. ADR, which now comprises 9.27 percent of the fund's assets. The top ten holdings comprise 68% of the fund.
NVidia is up 21.35% on the year, and now represents 19.6% of SMH`as of Monday. a fund of 25 companies. According to the funds' prospectus, if any single holding is more than 20% of fund assets as of December 9th, the fund must sell that stock until it represents exactly 20% of fund holdings.
The fund rebalances holdings every quarter to manage its exposure to any single portfolio component.
As of Friday, SMH shares closed at$590.99, down. 2% for the day. VanEck reported $72.82 billion in net assets as of Friday, October 9, and the annual fee is 0.35%. The fund has not updated its Monday, October 12 NAV at press time.
SMH portfolio construction
VanEck says the fund seeks to replicate the price and yield of the MVIS US Listed Semiconductor 25 Index. The fund has traded on Nasdaq since December 20, 2011.
MarketVector Indexes owns the index and describes it as the 25 largest and most liquid U.S.-listed companies in the semiconductor industry, limited to companies that generate at least 50% of their revenue from semiconductors or semiconductor equipment. Weights start from free-float market capitalization, the value of shares available to trade, and are then adjusted.
MarketVector's index guide, updated in September, says that at a rebalance no large holding can exceed 20%. Membership is refreshed twice a year, in March and September, and weights reset quarterly, in March, June, September and December.
The cap is not a daily limit. Between resets a stock can rise through 20%, and nothing in the rule pulls the weight back until the next reset. That reset is in December. If Nvidia is over 20% at that rebalance, the guide says its weight is cut to 20% and the excess is spread in proportion across the other large holdings. As of Thursday, October 8, Nvidia was 0.4 percentage points under the line.
The fund pays shareholders once a year. The last payment was $1.1047 a share, in December 2025.
What the money is in
In VanEck's holdings as of Thursday, October 8, Taiwan Semiconductor is 9.3%, Advanced Micro Devices 5.7%, Broadcom 5.3% and Micron Technology 4.8%. The ten largest positions are 67.7% of the fund.
Nvidia is the only name near the 20% cap
The shares trade in the United States, but the companies are not all American. As of Wednesday, September 30, VanEck assigned 78.78% of assets to the United States and 21.16% to Taiwan, the Netherlands, South Korea, the United Kingdom and Switzerland. Those October 8 holdings still include Taiwan Semiconductor, ASML at 4.4% and SK hynix at 4.1%.
The other semiconductor funds
The price figures below are share-price changes through Friday, October 9, and they leave dividends out. The 2026 column starts at the December 31, 2025 close.
The difference is the cap. The iShares Semiconductor ETF tracks the NYSE Semiconductor Index, holds 30 companies, and reported $45.91 billion in net assets as of Friday, October 9. iShares describes that index as capping the five largest stocks at 8% and the rest at 4% when weights are reset each quarter.
Twenty-three of the VanEck fund's 25 companies are in it. In the latest holdings, Nvidia is 7.5% of the iShares fund, against 19.6% in the VanEck fund. Intel is 8.6% and Micron is 7.8%, against 4.3% and 4.8%. Advanced Micro Devices is already 9.5%, above the 8% line, which is how a weight sits between quarterly resets.
SMH holds more than twice SOXX's Nvidia weight
- SMH
- SOXX
- NVDA
- SMH 19.6%
- SOXX 7.5%
- AMD
- SMH 5.7%
- SOXX 9.5%
- MU
- SMH 4.8%
- SOXX 7.8%
- INTC
- SMH 4.3%
- SOXX 8.6%
Both funds reset weights each quarter, so these are not the weights that sat in either fund all year.
This year the iShares fund's price gain leads by about 18 percentage points. Nvidia's shares were up 22.9% through Friday. Micron was up 261%, and Advanced Micro Devices and Intel were each up 184%. The iShares fund's latest holdings have more of those three and less Nvidia.
Over five years through Friday, on the same price measure, the VanEck fund rose 370% and the iShares fund rose 276%. Nvidia's shares rose 1,005% over that window. The VanEck rules allow a larger stake in the biggest company than the iShares rules do, and the latest holdings show that difference now.
A stake near a fifth of the fund is what the 20% rule allows between resets. This year the VanEck fund trails the fund with the tighter cap. Over five years it leads.
Want more of our stories in Google’s Top Stories? Add etf.net as a preferred source on Google
ETFs in this story
Frequently asked questions
How much of the VanEck Semiconductor ETF is Nvidia?
Nvidia was 19.6% of the fund as of October 8, which is 0.4 percentage points under the index's 20% cap.
Can Nvidia's weight in SMH go above 20%?
Yes. The cap applies only on rebalance dates, so a weight can rise past 20% between them. At each reset, MarketVector recalculates every weight from free-float market value and sets any company above 20% back to 20%. The December weights take effect after the close on Dec. 18.
How does SMH differ from the iShares Semiconductor ETF?
The iShares fund caps its five largest stocks at 8% and the rest at 4% at each quarterly reset, so it held 7.5% Nvidia against 19.6% in the VanEck fund.
Which fund has done better?
On price alone, the iShares fund is up 85.8% this year against 67.5% for the VanEck fund, while over five years the VanEck fund rose 370% against 276%.
