The VanEck Semiconductor ETF (NASDAQ:SMH) and the iShares Semiconductor ETF (NASDAQ:SOXX) appear to be substitutes on a fund screener. Both promise pure-play chip exposure, both charge roughly the same fee, and both ride the same AI cycle. The reason the choice still matters is that their indexes draw different lines around what counts as a chip stock and how much any one name can move the fund. In 2026, that distinction produced a return gap wide enough to reshape a portfolio.
What each fund is actually betting on
SMH tracks the MarketVector US Listed Semiconductor 10% Capped Screened Index, a 25-stock basket that limits any single position to 10% at each rebalance. The cap matters less than the roster, and as of June 9, 2026, the top weights are NVIDIA 15.55%, TSM 9.78%, Micron 7.28%, AMD 7.22%, and Intel 6.56%.
SOXX tracks the NYSE Semiconductor Index, a portfolio of about 30 holdings that moved away from the old PHLX rules in 2021. It uses tighter weighting bands that tend to push more capital toward equipment makers such as Applied Materials, Lam Research, and KLA. SMH also owns those companies, but the index design gives SOXX a stronger tilt toward the capital equipment side of the value chain. The underlying bet is on broader-cycle participation rather than on the largest design winners, a distinction that shapes how investors think about semiconductor breadth and value chain exposure. It’s also important to note that SOXX’s NVIDIA weight is closer to 9% versus the more than 15% SMH holds.
Where the difference showed up
Through June 9, 2026, SOXX is up 86.78% year-to-date, while SMH has gained 64.11%. Over the trailing year, SOXX returned 160% versus SMH at 135%. The rally broadened in 2026, equipment names re-rated, and SOXX’s wider net captured more of it.
Run the clock back, and the picture inverts. Over five years, SMH returned 391%, compared with SOXX at 307%. Over ten, SMH gained 2,148% while SOXX added 1,833%. That long-run lead reflects the years when NVIDIA and Taiwan Semiconductor carried the sector, and SMH’s heavier mega-cap tilt collected the upside.
The practical comparison
| Factor | SMH | SOXX |
|---|---|---|
| Expense ratio | 0.35% | 0.34% |
| Index | MVIS US Listed Semi 25 | NYSE Semiconductor |
| Holdings | 25 | ~30 |
| Foreign-domiciled exposure | ~18% (Netherlands, Taiwan) | U.S.-listed, lighter foreign tilt |
| YTD 2026 return | 64.11% | 86.78% |
Fees are effectively tied at 0.35% and 0.34%. Both trade with deep options markets and tight spreads, so liquidity is not a tiebreaker for retail size. The structural wedge is SMH’s 9.15% Netherlands weighting through ASML and its 8.75% Taiwan weighting through TSMC; exposure to SOXX is diluted by design.
The verdict
SOXX fits the investor who wants exposure to the semiconductor cycle without hinging the whole fund on a few leaders, and who values equipment-maker exposure when the cycle broadens. SMH fits the investor who wants concentrated leverage to the largest design and foundry names and is comfortable giving up diversification to get it. The 2026 rally rewarded SOXX’s breadth, but the multi‑year record still belongs to SMH. The calculus flips when leadership narrows back to two or three mega caps, which is exactly the setup SMH is built to capture, the kind of environment that highlights concentration payoffs over broad cycle exposure.
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