Semiconductor ETF

Invest in the semiconductor sector

The VanEck Semiconductor UCITS ETF has been the first Europe’s UCITS ETF offering specific exposure to the semiconductor sector.

Semiconductor ETF - Fund Overview

VanEck Semiconductor UCITS ETF

  • Europe’s first Semiconductor ETF
  • Pure-play semiconductor stocks
  • High quality – physical replication and no securities lending
  • 0.35% total expense ratio
  • Promotes environmental and social characteristics (SFDR Article 8)
SMH

ETF Details

ETF Details

Basis-Ticker: SMH
ISIN: IE00BMC38736
TER: 0.35%
AUM: $2.0 B (as of 21-05-2024)
SFDR Classification: Article 8

Lower risk

Typically lower reward

Higher risk

Typically higher reward
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Risk of a Semiconductor ETF: You may lose money up to the total loss of your investment due to Emerging Markets Risk and Risk of investing in smaller companies as described in the Main Risk Factors, KID and prospectus.

Semiconductor ETF Powers the Fourth Industrial Revolution

Have you heard of the fourth industrial revolution? If not, rest assured that it’s already changing your life. Zoom calls; smart heating and lighting; self-driving cars; rapid advances in medical science, including vaccines. All these require semiconductors and are just a few children of the revolution, which is gathering speed.

Be involved in this economic revolution by investing in the VanEck Semiconductor UCITS ETF.

The Fund Provides Access to the Core of Modern Tech

The 21st Century tech revolution would not be possible without an invention of the 20th Century: semiconductors, also called microchips. They make billions of flawless calculations per second and store nearly infinite data – all on a space smaller than your fingernail. Just a few large companies make semiconductors; they are well positioned to reap substantial profits.

It’s no exaggeration that the rise of tech is becoming exponential. Research from Huawei / Oxford Economics sees its share of the global economy (measured by gross domestic product) rising from 15% in 2006 to 24% in 2025. Thus, the growth perspectives of the Semiconductor ETF by VanEck are excellent. We already find this around us, for instance:

  • Artificial intelligence in all sectors (eg medical research and diagnostics, self-driving cars, robotics)
  • 5G mobile communication (from wireless broadband to wireless TV)
  • 3D printing
  • The Internet of Things
  • Cryptocurrencies (notably Bitcoin)
  • 3D video gaming.

Several substantial barriers to entry protect semiconductor manufacturers, shielding their profit margins:

  • Creating a new semiconductor takes huge financial investments, if only for lithography machines costing around USD 100 million.
  • The thousands of highly-skilled, highly-paid engineers needed to research, design and make semiconductors cannot be recruited overnight.
  • Large numbers of patents protect the intellectual property behind semiconductors.

Such ‘economic moats’ enshrine competitive advantages. That’s why semiconductor pioneers like Texas Instruments (invented the world’s first integrated circuit in 1958) and Intel (created the first commercial chip in 1971) are still leading players. This is an interesting factor to reflect upon when considering an investment in a Semiconductor ETF.

When it comes to electronics, semiconductor chips make all the difference. Advances in technology depend on advances in semiconductors. For instance, the annual fanfare of new iPhone models would not be possible without relentless improvements in semiconductors. Now new semiconductors are among the vital ingredients of the fourth industrial revolution. As such, they and consequently this Fund can claim their share of its future profits.

High Barriers to Entry

Invest in Progress with the Semiconductor Fund by VanEck

Most semiconductor stocks are US or Asian firms. As a result, they may be underrepresented in European investors’ portfolios. As the first of its kind in Europe, the VanEck Semiconductor ETF is a high-quality, low-cost way to increase your exposure.

Performance of the VanEck Semiconductor ETF

Source: MVIS. Performance is shown in USD. VanEck Semiconductor UCITS ETF (“the Fund”) tracks the performance of the MVIS US Listed Semiconductor 10% Capped ESG Index, but the displayed performance data is not equal to fund performance as it does not reflect a deduction for fees and expenses. Indices are unmanaged and not securities in which investments can be made. Past performance is no indicator for future results.

Top 10 Holdings

Holding Name Shares % of Net
Assets
Nvidia Corp 210,595 10.55
Taiwan Semiconductor Manufacturing Co L 1,319,473 10.51
Broadcom Inc 138,369 10.44
Asml Holding Nv 186,067 9.42
Advanced Micro Devices Inc 886,853 8.15
Qualcomm Inc 652,185 6.27
Texas Instruments Inc 524,903 5.37
Applied Materials Inc 444,121 5.12
Intel Corp 2,500,956 4.42
Lam Research Corp 77,550 4.02
Top 10 Total (%) 74.27

Main Risk Factors of a Semiconductor ETF

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Liquidity risks exist when a particular financial instrument is difficult to purchase or sell. If the relevant market is illiquid, it may not be possible to initiate a transaction or liquidate a position at an advantageous or reasonable price, or at all. This is a risk factor of a Semiconductor ETF.

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The prices of the securities in the Fund are subject to the risks associated with investing in the securities market, including general economic conditions and sudden and unpredictable drops in value. Thus, an investment in this ETF may lose money.

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The Fund’s assets may be concentrated in one or more particular sectors or industries. A Semiconductor ETF may be subject to the risk that economic, political or other conditions that have a negative effect on the relevant sectors or industries will negatively impact its performance to a greater extent than if its assets were invested in a wider variety of sectors or industries.

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