Best $1,000 Semiconductor ETF to Buy in 2026

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  Right Now, the Best $1,000 Semiconductor ETF to Buy in 2026

Major tech companies like Microsoft, Amazon, Alphabet, Meta Platforms, and Oracle will invest hundreds of billions of dollars in capital projects. The majority of it will be used for AI infrastructure, with semiconductor chips accounting for a significant portion of that.

The VanEck Semiconductor ETF (NASDAQ: SMH) is the one to own if you want a single ETF that can take advantage of that trend. The fund has returned 49% since 2025, making it up 71% year to date (through June 16). It has returned just over 38% on average per year for the past five years. Did you miss Nvidia in 2009?

This unusual signal is flashing once more. In 2009, Nvidia, a little-known chipmaker, received a "Double Down" signal. That same "Total Conviction" light is flashing for a company that is one-tenth the size of Nvidia for the first time in years.

 How SMH puts its portfolio together, SMH monitors the US MVIS.

 The Semiconductor 25 index is listed. It is merely a market-cap-weighted index of the 25 largest semiconductor stocks listed in the United States. As a result, the portfolio typically consists primarily of large corporations. Together, NVIDIA and Taiwan Semiconductor make up close to 25% of the portfolio. Nearly half of it is made up of allocations to Intel, Micron, and Advanced Micro Devices.

Company                                                                     Weight

 Nvidia                                                                          14.5%

 Manufacturing of semiconductors in Taiwan              9.3%

 Micron Engineering                                                     8%

 Innovative Micro Devices                                           7.3%

 Intel                                                                             7.2%

 VanEck is the data source. But right now, that concentration gives the leaders of the industry a lot of exposure. The iShares Semiconductor ETF (NASDAQ: SOXX) and other ETFs limit individual holding weights. It still has a large-cap bias, but it's diluted a bit by smaller mid-cap names. Although it is a minor difference, it may have an impact on performance depending on the situation.

 SMH and its rivals, the iShares Semiconductor ETF and the Invesco PHLX Semiconductor ETF (NASDAQ:

SOXQ) are the two primary alternatives to the VanEck Semiconductor ETF. Because they are essentially the same fund, you could compare SOXX and SOXQ together. With 74% overlap, their selection criteria are very similar.

The expense ratio is the only significant distinction. Since SOXQ has an expense ratio of 0.19 percent, it outperforms SOXX in terms of costs. It really comes down to whether you want more concentrated megacap exposure in this sector when comparing the VanEck ETF and the Invesco ETF. This is offered by VanEck, whereas Invesco prioritizes smaller businesses in this industry.


  Writer: Binod Kumar Simkhada 
binodkumarsimkhada315@gmail.com

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