SMH Was the One of the Best-Performing Non-Leveraged ETFs of the Last Decade. Here Is the Concentration Risk Investors Miss

"Over the trailing 10-year period as of March 31, 2026, SMH delivered a 31.34% annualized return at net asset value. That's exceptional compounding over a sustained period."

"The MVIS U.S. Listed Semiconductor 25 Index focuses on the largest and most liquid companies in the industry and uses a market-cap-weighted approach."

"As of April 21, Nvidia makes up 18.57% of the fund, while Taiwan Semiconductor sits at 10.63%. Together, those two names account for nearly a third of the ETF."

"A single earnings miss or negative development from either company could move the ETF meaningfully in a short period."

The VanEck Semiconductor ETF (SMH) achieved a 31.34% annualized return over the past decade, closely tracking the MVIS U.S. Listed Semiconductor 25 Index. Despite its strong performance, SMH faces concentration risk, as it is heavily weighted towards a few large companies. Nvidia and Taiwan Semiconductor represent nearly a third of the ETF, which can lead to significant volatility. Investors should be cautious, as a downturn in these key holdings could adversely affect the ETF's performance.

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