Home / Business and Economy / ETF Funds Diverge: SOXX Surges Ahead of SMH
ETF Funds Diverge: SOXX Surges Ahead of SMH
26 Aug
Summary
- SOXX ETF gained 68.37% YTD, outperforming SMH's 51.83% YTD.
- SOXX maintains balanced holdings; SMH is heavily concentrated in top stocks.
- Balanced ETFs like SOXX better positioned if chip growth broadens.
As of August 25, 2026, the iShares Semiconductor ETF (SOXX) has demonstrated superior performance, achieving a year-to-date gain of approximately 68.37%. This significantly outpaces the VanEck Semiconductor ETF (SMH), which has seen a 51.83% increase over the same period. The performance gap is largely due to their differing portfolio management strategies.
SOXX employs a balanced approach, with its top holdings, including Nvidia, Micron, and Advanced Micro Devices, weighted closely, none exceeding roughly 9% of the fund. This diversification spreads risk and allows SOXX to benefit from multiple sector winners.
In contrast, SMH's portfolio is top-heavy, with Nvidia alone constituting about 21.94% and Taiwan Semiconductor an additional 9.59%. While this concentration can yield high returns, it also exposes the fund to greater risk if major holdings falter.
An example illustrating the impact of concentrated holdings is the First Trust Nasdaq Semiconductor ETF (FTXL). When dominant stocks like Broadcom and Intel experienced declines, FTXL saw a substantial loss, highlighting the vulnerability of heavily weighted ETFs. SOXX's balanced structure offers greater resilience against such events.
