Forget SMH and Its 87% Year: Three Semiconductor Funds Did Much Better

If you own the VanEck Semiconductor ETF (NASDAQ:SMH), the past twelve months delivered a spectacular ride. SMH returned 87.86% over the trailing year and 54.32% year to date, powered by its 17.55% weight in NVIDIA and 9.29% weight in Taiwan Semiconductor. That concentration is exactly why investors bought SMH in the first place, and over five years it has been a winning bet. But three lesser-known semiconductor funds beat SMH on both the one-year and year-to-date scoreboards, and the reason traces back to how 2026’s rally has broadened beyond a handful of mega-caps.

One-Year Scoreboard

Here is how each semiconductor ETF stacks up through August 26, 2026:

SOXX is the fund most SMH holders already know. It landed ahead of SMH but behind the three challengers. The story of 2026 is dispersion: names that SMH underweights (Micron, Intel, Marvell, memory, equipment, packaging) drove a larger share of the return than NVIDIA did. The same broadening is showing up outside the chip space too, in the power, cooling, and networking suppliers behind the data-center buildout (we profiled seven of them in a free report here: 7 Stocks Powering the AI Boom (That Aren’t Chipmakers)).

PSI: Tiered Modified Equal Weighting

PSI tracks the Dynamic Semiconductor Intellidex, and its tiered weighting caps single-stock dominance. That structure meant less exposure to NVIDIA and more to mid-cap chip designers and equipment makers when the rally broadened. Over the past year, PSI returned 114.47% versus SMH’s 87.86%. PSI is smaller and less liquid than SMH, but for investors who want semi exposure without a single stock driving nearly a fifth of the fund, that is the design tradeoff working in your favor.

CHPS: Global Reach, Different Top Names

CHPS holds 54 positions spanning U.S., Taiwanese, South Korean, Japanese, European, and Israeli semiconductor firms. Its largest positions are Micron at 6.82%, SK Hynix at 6.80%, and AMD at 6.46%. NVIDIA is just 3.40%. That memory-heavy tilt paid off. CHPS returned 134.83% over the past year, the best in the group. One caveat to note: CHPS launched in 2023, so it has no true five-year record and net assets of only $89.6 million. Therefore, it is a small fund with a short history.

FTXL: The Non-NVIDIA Semiconductor Fund

FTXL is a modified factor-weighted fund with 35 positions, and its top holdings look nothing like SMH’s. FTXL puts 13.28% in Intel, 12.14% in Micron, and 7.91% in Marvell, with NVIDIA at only 4.79%. The fund leaned into the exact names SMH underweighted, and FTXL returned 123.50% over the trailing year. With $2.75 billion in net assets, it has the scale that CHPS lacks.

Five-Year Counterweight

Before switching positions, look at the longer record. Over five years, SMH returned 321.11%, ahead of SOXX at 241.58%, FTXL at 231.07%, and PSI at 216.19%. CHPS lacks a five-year track record. The concentration that hurt SMH in 2026 is the same concentration that made it dominant from 2021 through 2025. This is a 2026 dispersion story about which corners of the chip market led the rally.

Tradeoffs and Tax Reality

SMH’s $77.2 billion in net assets means the tightest spreads and deepest liquidity in the category. PSI, FTXL, and especially CHPS trade thinner. And if you hold SMH in a taxable account with large embedded gains, selling to swap creates a capital gains bill that a modestly higher expected return may not cover.

What This Means for Your Position

If you are near or in retirement and hold SMH for semi exposure, the practical move is a partial trim. Consider keeping a core SMH position and pairing it with FTXL or PSI to reduce the NVIDIA/TSMC single-name risk that now drives roughly a quarter of SMH’s return profile. Direct new contributions into the broader-basket fund rather than selling. If concentration risk keeps you up at night, that split gets you diversified exposure without triggering the tax bill that a full swap would. If you specifically want the NVIDIA thesis to keep working, staying in SMH is the straightforward answer.

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