Best Semiconductor ETFs to Watch in 2025

Below, we’ll examine a selection of popular and well-regarded Semiconductor ETFs, highlighting their key characteristics to help you make informed investment decisions. We will consider factors such as expense ratios, top holdings, and reasons to consider each ETF.

• Expense Ratio: 0.35%
• Top Holdings: Taiwan Semiconductor Manufacturing, NVIDIA, ASML Holding, Broadcom, Qualcomm (these are typically the top holdings, but can fluctuate).
• Why Consider It? SMH is one of the most popular and liquid semiconductor ETFs, offering exposure to leading companies in the industry. It’s known for its concentrated portfolio and market-cap-weighted approach.

• Expense Ratio: 0.19%
• Top Holdings: NVIDIA, Broadcom, QUALCOMM Inc, Intel Corp., Taiwan Semiconductor (these are typically the top holdings, but can fluctuate).
• Why Consider It? SOXQ offers exposure to U.S.-listed companies that design, distribute, manufacture and sell semiconductors.

• Expense Ratio: 0.56%
• Top Holdings: NVIDIA, Broadcom, Qualcomm, Advanced Micro Devices, Applied Materials (these are typically the top holdings, but can fluctuate).
• Why Consider It? PSI uses a fundamentally weighted approach, selecting and weighting stocks based on factors such as price momentum, earnings, and sales growth. This may offer different risk/reward characteristics than market-cap-weighted ETFs.

• Expense Ratio: 0.35%
• Top Holdings: NVIDIA, Broadcom, Advanced Micro Devices, Qualcomm, Applied Materials (these are typically the top holdings, but can fluctuate).
• Why Consider It? Strive differentiates itself through its focus on shareholder alignment and corporate governance. It aims to influence companies to prioritize long-term shareholder value.

• Expense Ratio: 0.13%
• Top Holdings: NVIDIA, Broadcom, Advanced Micro Devices, Qualcomm, Applied Materials, ASML Holding, Micron Technology, Texas Instruments, Taiwan Semiconductor Manufacturing, Lam Research.
• Why Consider It? SEMI offers investors targeted exposure to the semiconductor industry. The global demand for semiconductors is driven by increasing complexity in electronics, cloud computing, 5G, artificial intelligence, electric vehicles, and data centers. Therefore, investors may consider investing in this ETF to capitalize on the growth potential of the semiconductor industry.

• Expense Ratio: 0.35%
• Top Holdings: NVIDIA, Broadcom, Advanced Micro Devices, Qualcomm, Applied Materials (these are typically the top holdings, but can fluctuate).
• Why Consider It? SOXX is a well-established and liquid semiconductor ETF, offering exposure to a broad range of companies in the industry. It tracks the ICE Semiconductor Index.

Discover the capabilities of InvestingPro for evaluating Semiconductor ETFs. Access in-depth analysis of Semiconductor ETFs, easily compare expense ratios, 1-year, and 5-year returns: InvestingPro provides real-time data, historical performance charts, and advanced analytical tools to help you make smarter investment choices. With InvestingPro, you can screen ETFs based on various factors, including expense ratios, trading volume, and holdings diversification, empowering you to identify the funds that best align with your investment goals.

Investing in Semiconductor ETFs is generally considered a sound strategy for investors seeking broad market exposure, diversification, and relatively low risk. However, it’s crucial to assess your financial goals, risk tolerance, and time horizon before investing.

• Growth Potential: Exposure to a high-growth industry driven by technological innovation.
• Diversification: Offers diversification within the semiconductor sector, reducing the risk of investing in individual stocks.
• Convenience: A simple and accessible way to invest in a complex industry.
• Exposure to Key Trends: Provides exposure to key technological trends like AI, 5G, and the Internet of Things.
• Innovation Focus: Invests in companies pushing the boundaries of technology.

• Cyclicality: The semiconductor industry is cyclical and can be sensitive to economic downturns.
• Geopolitical Risks: The industry is subject to geopolitical tensions, especially concerning supply chains and trade.
• Technological Disruption: Rapid technological advancements can quickly render older technologies obsolete.
• Concentration Risk: Some semiconductor ETFs may be heavily concentrated in a few top holdings.

Choosing the right Semiconductor ETF requires careful analysis and consideration of several factors. Here are some essential steps to help you find the top Semiconductor ETFs for your investment needs:

• Examine the top holdings to understand the ETF’s concentration and exposure to different segments of the semiconductor industry (e.g., manufacturing, design, equipment).

• Compare expense ratios, balancing the cost with the fund’s strategy, performance, and liquidity. Use InvestingPro to assess and compare expense ratios.

• Assess the ETF’s historical performance, tracking error, and trading volume. Choose an ETF with sufficient liquidity for easy buying and selling. Within InvestingPro you can find and compare the performance across ETF benchmarks.

• Consider whether you prefer market-cap weighting, fundamental weighting, or a specific investment theme (e.g., shareholder alignment). Select an ETF that aligns with your investment goals and risk tolerance.

The semiconductor industry involves the design, manufacturing, and distribution of semiconductor devices (chips) used in electronic devices.

Technological advancements, increasing demand for electronic devices, and growth in emerging technologies like AI and 5G.

Cyclicality, geopolitical risks, technological disruption, and concentration risk.

Market-cap weighting weights companies based on their market capitalization, while fundamental weighting uses factors like revenue, earnings, or dividends.

While the semiconductor industry has long-term growth potential, it is also cyclical. Consider your risk tolerance and time horizon.