The VanEck Semiconductor ETF (NASDAQ: SMH) is delivering another standout performance, posting a total return of roughly 59% so far in 2026.
The S&P 500 (SNPINDEX: ^GSPC), with dividends included, has gained about 12% over the same period, putting the gap between the two at nearly 47 percentage points.
That kind of margin is not unusual for SMH, which beat the S&P 500 on total return in eight of the 10 calendar years from 2016 through 2025.
In each of those eight winning years, the fund never won by less than about 13 percentage points against the broader index.
The winning years were rarely close, with highlights including a roughly 65% return in 2019 against the index’s 31%, and about 73% in 2023 compared to the index’s 26%.
From the end of 2015 through 2025, the fund’s total return amounted to nearly 1,400%, enough to turn $1,000 into almost $15,000, while the same amount in an S&P 500 index fund grew to about $4,000.
The fund’s two losing years, 2018 and 2022, tell an equally important part of the story for investors considering the position.
In 2018, the fund lost about 9% while the index fell roughly 5%, and in 2022 the fund shed about a third of its value while the index dropped approximately 18%.
Both losing years saw the fund fall about twice as far as the broader market, reflecting the cyclical nature of chip demand and the concentrated nature of the portfolio.
Notably, the fund’s two best years of the decade, 2019 and 2023, came directly after its two worst, meaning investors who sold after the down years locked in losses and missed the strongest recoveries.
The fund holds roughly 25 of the largest semiconductor companies listed in the U.S., manages about $72 billion in assets, and charges 0.35% annually in fees.
Concentration at the top is significant: Nvidia (NASDAQ: NVDA), whose GPUs power much of the AI build-out, accounted for about 23% of assets as of September 16, a position worth roughly $16 billion.
Taiwan Semiconductor Manufacturing represented about another 10% of the fund, and the five largest holdings combined made up approximately half of total assets.
Shares currently trade around $573, roughly 15% below the 52-week high of $671.83 reached in June, meaning 2026’s strong returns have not arrived without volatility.
The fund is arguably best held alongside a broad S&P 500 index fund rather than as a replacement for one, and sized so that a repeat of 2022’s roughly one-third loss would not force a sale at the worst moment.
