The VanEck Semiconductor ETF (NASDAQ:SMH) has ripped higher in 2026, gaining 64.47% year to date through July 2 and 111.24% over the trailing 12 months. Yet the fund fueling that run does not own a single share of Apple (NASDAQ:AAPL | AAPL Price Prediction), arguably the most recognizable technology stock on the planet. The absence is structural, not tactical, and it explains a lot about how the ETF earned its return.
What SMH Actually Is
SMH is VanEck’s pure-play semiconductor ETF, tracking the largest chip designers, foundries, and equipment makers listed on U.S. exchanges. It carries a net expense ratio of 0.35%, which sits at the low end for a thematic sector fund. Total net assets were not disclosed in the most recent VanEck fact sheet dated May 27, 2026, but the fund is one of the most heavily traded semiconductor vehicles in the market.
What’s Driving the Return
The rally traces directly to a concentrated basket of chip names. As of the latest fact sheet, the top 10 holdings are:
| Company | Weight |
|---|---|
| Advanced Micro Devices (NASDAQ:AMD) | 10.33% |
| Broadcom (NASDAQ:AVGO) | 9.57% |
| Micron Technology | 9.39% |
| Taiwan Semiconductor Manufacturing | 8.75% |
| NVIDIA (NASDAQ:NVDA) | 8.40% |
| ASML Holding | 8.13% |
| Intel | 8.13% |
| Lam Research | 5.62% |
| Applied Materials | 5.53% |
| Texas Instruments | 4.52% |
AMD, Broadcom, and Micron alone account for 29.29% of net assets combined. Add NVIDIA, TSMC, ASML, and Intel and the top seven push well past 60% of the fund. That concentration in AI accelerators, memory, foundry capacity, and lithography equipment is the engine behind the year’s return. A TipRanks piece dated May 9, 2026 flagged the same drivers, noting the rally was tied to Nvidia, Taiwan Semiconductor, and Intel rather than the broader tech complex.
Why Apple Isn’t In It
Apple designs its own silicon, but the company generates the bulk of its revenue from devices and services. Its most recent quarter, filed April 30, 2026, showed iPhone revenue of $56.99 billion and Services revenue of $30.98 billion. Under the index methodology SMH follows, that revenue mix classifies Apple as a consumer hardware and services company under the index methodology. It is excluded by design. SMH’s holdings history from January through July 2026 shows no Apple position at any point during the period covered by the ETF’s year-to-date gain.
How Owning Apple Would Have Compared
Apple stock has done fine on its own, with shares up 13.74% year to date and 45.86% over the past year. Broad-market and megacap tech ETFs that hold Apple captured that move. SMH’s methodology traded diversified megacap exposure for concentrated chip exposure, and in 2026 that trade has paid off. Investors weighing the fund should recognize the flip side: seven names carry more than 60% of the portfolio, so a single-stock stumble carries real weight.
The Recent Pullback
The year-to-date figure hides a rough stretch. SMH is down 7% over the trailing week and 6.31% over the trailing month, closing July 2 at $592.29 after a 4.54% single-day drop. Reddit sentiment reflected the shift, with r/wallstreetbets threads on June 9 and 10 turning bearish around a “Semiconductor shorts pile on” narrative. Concentrated funds cut both ways.
The Takeaway
SMH offers a clean, low-cost way to own the largest listed chipmakers, and the design choice to exclude Apple has been additive in 2026. For retirement-focused investors, the more important question is fit: a fund with roughly 60% in seven names behaves differently from a diversified tech ETF that owns Apple, Microsoft, and Alphabet alongside chips. Past performance does not guarantee future results, and this article is not investment advice. The fund’s structure is the story here, and the recent pullback is a reminder that concentration works in both directions.
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