Forget SMH: BlackRock’s Chip Fund Beat It by 22.43 Points Over the Past Year

The VanEck Semiconductor ETF (NASDAQ:SMH) probably drew you in for broad, liquid exposure to the companies making chips for AI data centers, phones, and cars. SMH has paid off on that thesis, with an 89.13% gain over the past year. Over the same stretch, the iShares Semiconductor ETF (NASDAQ:SOXX) rose 111.56%, which puts it 22.43 points ahead of SMH.

SOXX leads over shorter periods as well. It gained 13.64% over the past month while SMH gained 11.96%. Year-to-date, SOXX is up 96.38%, and SMH is up 76.28%, a gap of 20.1 points. All three recent periods favor the challenger.

SMH Puts a Large Share of Your Money in One Chipmaker

SMH’s most recent holdings filing is dated June 30, 2026. It shows NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) at 17.54% of net assets. Taiwan Semiconductor Manufacturing (NYSE:TSM) came second at 9.28%.

If you bought SMH expecting even exposure across the chip industry, this concentration matters. A large piece of your position rises and falls with NVIDIA’s earnings and guidance. That has helped recently, because NVIDIA just reached an all-time high, according to a 24/7 Wall St. report published October 5, 2026. It also means one company’s decline can pull down the whole fund. Both funds carry significant risk as concentrated bets on a single, cyclical sector, and the same AI expansion driving these chip names is also lifting the power, cooling, and networking suppliers we profiled in a free report here: 7 Stocks Powering the AI Boom (That Aren’t Chipmakers).

Different Indexes, Different Rules

Different benchmarks drive these two funds. SMH follows the MVIS US Listed Semiconductor 25 Index, and SOXX follows the NYSE Semiconductor Index. Each index has its own rules for which companies get in and how much weight they receive.

To compare current allocations, check the holdings pages that VanEck and iShares publish before you buy.

Over Five and Ten Years, SMH Wins by a Wide Margin

Look back further, and the result reverses. Over five years, SMH climbed 415% while SOXX rose 315.32%. That puts SMH ahead by 99.68 points, far more than SOXX’s one-year lead.

SMH also leads over ten years, with a 1901.44% gain against 1618.66% for SOXX on a total return basis. SOXX’s advantage is recent. Over the holding periods most long-term investors care about, SMH has delivered much more. Twelve months of results carry less weight than a record that long.

What to Check Before You Act

Both funds own many of the same chip companies, and both have produced strong long-term gains. The sector deserves most of the credit. Your choice ultimately comes down to which index rules you prefer. Before changing anything:

• Compare current top holdings on each sponsor’s website. Note how much of each fund’s assets sit in its largest positions.
• Read each index’s methodology, especially any caps on single-stock weights and how often the index rebalances.
• Check current expense ratios on the VanEck and iShares fund pages, so you compare fees from the same date.
• Estimate your tax bill. Gains this large make selling SMH in a taxable account expensive. A swap inside an IRA or 401(k) doesn’t trigger capital gains.
• Consider using new money. Some investors choose to direct fresh contributions to a second fund rather than selling an existing position.

One Strong Year Doesn’t Outweigh a Decade

The recent gap and the long-run gap point in opposite directions, and the long-run gap is much larger. SOXX’s 22.43-point one-year lead is real, but it is small next to SMH’s 99.68-point five-year lead. In a taxable account, selling SMH after gains this large carries a significant tax cost relative to one year of outperformance. If SOXX outperforms consistently over several more years, that would make a far stronger case for switching than one year does.

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