VanEck Semiconductor ETF SMH puts a fifth of its money in Nvidia

ASMH had 20.2% of its assets in Nvidia as of Friday, Oct. 16.

VanEck's fact sheet says the fund seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the MVIS US Listed Semiconductor 25 Index. That index, from MarketVector Indexes, is the 25 largest and most liquid US-listed companies in semiconductor production and equipment. Friday's holdings count was 26, because the portfolio also carried a small cash balance.

The 20% cap is reset each quarter

MarketVector's index guide, version 1.04 from September 2026, sets a maximum weight of 20% for any single security, and applies it when the index rebalances, not every day.

Rebalancing is quarterly, in March, June, September and December. The membership is reconstituted in March and September.

A company needs at least 50% of its revenue from semiconductors or semiconductor equipment to enter. A company already in the index can stay if that share of revenue is still at least 25%.

On Friday, Nvidia was 20.2%, above the cap. That is what the rule allows between quarterly rebalances.

VanEck's summary prospectus of Feb. 1, 2026, classifies the fund as non-diversified under the Investment Company Act of 1940, and says it may invest a greater percentage of its assets in a particular issuer. The 20% figure comes from the index, not from that classification.

US-listed does not mean US-based

The same prospectus says the fund normally invests at least 80% of its total assets in the index's securities. Those include common stocks and depositary receipts of US exchange-listed companies. A depositary receipt is a US-listed stand-in for a foreign company's shares.

MarketVector classifies 19 of the 25 companies as American. It classifies Taiwan Semiconductor Manufacturing (TSMC) as based in Taiwan, ASML as based in the Netherlands and SK hynix as the index's only company based in South Korea. On Friday, TSMC was 9.4% of the fund, ASML was 4.4% and SK hynix was 3.8%.

The same companies, a tighter cap

iShares Semiconductor ETF ASOXX tracks the NYSE Semiconductor Index, the 30 largest US-listed semiconductor companies, according to its summary prospectus of July 31, 2026. On Friday ASOXX had $42.7 billion in assets, against $67.7 billion in ASMH. The two funds shared 23 companies.

iShares' statement of additional information says the index is float-adjusted market-cap weighted, with every constituent capped at 8% and names outside the five largest capped at 4%. A supplement dated Sept. 2, 2026, says that at reconstitution, weights are determined subject to those limits.

On Friday, Advanced Micro Devices was the largest holding in ASOXX, at 9.4%, above the 8% cap applied when the index sets weights. Nvidia was 7.8% of ASOXX, against 20.2% of ASMH, and TSMC was 3.1%, against 9.4%. Those weights differ because the caps differ.

State Street SPDR S&P Semiconductor ETF AXSD tracks the S&P Semiconductor Select Industry Index. State Street describes the index as modified equal weighted. As of Thursday, Oct. 15, the fund held 47 companies, and the largest, Synaptics, was 3.2%. On Friday it had $2.8 billion in assets.

What it costs, and what it pays

The expense ratio is 0.35% a year. VanEck's fact sheet as of Sept. 30 shows that figure both gross and net.

The fund pays once a year. The last distribution was $1.1047 a share, and the shares went ex-dividend on Dec. 22, 2025. Against Friday's last traded price, that payment is a yield of 0.2%.