A semiconductor ETF has ripped higher in 2026 without owning one of the most recognizable chip names on the market. The VanEck Fabless Semiconductor ETF (NASDAQ:SMHX) is up 54.22% year to date through July 2, 2026, and it holds zero shares of Intel (NASDAQ:INTC | INTC Price Prediction). That absence is baked into the fund’s mandate.
What SMHX Actually Owns
SMHX is issued by VanEck and tracks a basket of fabless semiconductor companies, meaning firms that design chips but outsource manufacturing to third-party foundries such as TSMC. The fund launched around August 2024, so its track record is short. Standard fund-data fields like expense ratio, assets under management, and a current top-10 holdings snapshot were not available at the time of writing.
Even without a live holdings file, the mandate is clear. Fabless funds typically hold designers such as NVIDIA, AMD, Qualcomm, Broadcom, and Arm, though those specific weights should be confirmed against the fund’s latest disclosure before assuming any position size.
Why the ETF Is Up
The fabless corner of the chip industry has been the hottest pocket of tech. Designers capture the margin on AI accelerators, mobile SoCs, and networking silicon while foundries absorb the capital burden. SMHX rode that wave to a 87.07% one-year gain and its 54.22% YTD return, closing at $58.65 on July 2, 2026.
Recent price action has been rougher. SMHX is down 5.27% over the past week and 12.76% over the past month. The YTD gain remains solid, though the last four weeks have pulled back.
Why Intel Is Not in the Fund
Intel is excluded by definition. It is an integrated device manufacturer, or IDM, which means it designs chips and operates its own fabrication plants. Intel Foundry generated $5.421 billion in Q1 2026 revenue, up 16% year over year, and the company runs fabs in the United States, Ireland, and Asia. A fabless index screens that business model out at the door. It is a durable exclusion tied to the fund’s very mandate, not a rebalancing decision that could reverse next quarter.
For a plain-language read: fabless designers sell blueprints. IDMs like Intel sell blueprints and also run the factories. SMHX only wants the blueprint sellers.
The Irony: Intel Itself Rallied
Here is the twist. Skipping Intel did not cost the ETF, but Intel had a monster year on its own. INTC is up 226.15% year to date and 450.05% over the past year, closing at $120.35 with a market cap of $604.88 billion. CEO Lip-Bu Tan has stitched together six consecutive quarters of revenue above expectations, and Data Center and AI revenue grew 22% year over year in Q1 2026. Intel was also selected as host CPU for NVIDIA’s DGX Rubin NVL8 systems.
A fund holding Intel would likely have posted an even larger 2026 gain. SMHX did not need it to clear 50% YTD, but investors evaluating the ETF should understand that the fabless screen cuts both ways.
What the Exclusion Means for Risk
Excluding IDMs concentrates the fund in design-focused companies whose fortunes rise and fall with a small set of foundry partners, primarily TSMC. That concentration has been a tailwind in 2026. It is also a single point of failure if foundry pricing, geopolitics around Taiwan, or AI capex growth turns. Broader semiconductor ETFs that include Intel, Micron, and Texas Instruments spread that risk across manufacturing as well as design.
The Takeaway
SMHX gives investors a targeted bet on chip designers, and the fabless screen is the reason Intel will not appear in it regardless of how well Intel executes. Past performance does not guarantee future results, and this article is not investment advice. Readers weighing SMHX should decide whether they want pure fabless exposure or a broader semiconductor basket that captures manufacturers too. The answer depends on how much of the AI trade you believe lives in the design layer versus the fab.
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