Semiconductors are the backbone of the artificial intelligence (“AI”) revolution, powering seemingly everything from everyday appliances to mobile phones and laptops.
With the surge in AI investment from major tech companies, many chip stocks have rocketed higher over the past year. But some investors may find it challenging to pick the winners.
One solution is to invest in the best semiconductor exchange-traded funds (“ETFs”). These funds have delivered high returns – more than 20% annually over the past five years – without requiring investors to buy individual stocks.
Of course, big names such as Nvidia (NVDA) have soared for years, but the winners aren’t all trillion-dollar stocks. Even smaller chip companies offer huge opportunities in the AI boom
Turning to an ETF takes the hard work out of identifying the industry’s top performers and avoiding the sting of picking a loser. You won’t need to spend the time and energy analyzing the competitive positions of individual companies. Instead, a fund does all the heavy lifting for you, often for a low cost.
So, the best semiconductor ETFs provide a convenient way for investors of all types to create a winning portfolio of chip stocks.
Top Semiconductor ETFs to Invest in for 2026
The best semiconductor ETFs below are all index funds, meaning they track a specific index, merely replicating the constituent stocks. They offer a range of different investments, so it’s important to look at what index is being tracked and how the fund is weighted.
Three typical weighting approaches:
- Equal-weighted: The fund’s stocks comprise a roughly equal percentage of the total portfolio.
- Weighted by market cap: Stocks with a higher total market cap comprise a larger portion of the portfolio.
- Weighted by various factors: Some indexes weight their stock positions on factors such as profitability, valuation, and price momentum.
The five funds below represent tried-and-true semiconductor ETFs. Many semiconductor funds have sprung up in recent years to take advantage of the boom in AI and technology-related spending in the sector. Only a handful of funds met the criteria below, including a strong, long-term record of returns.
| Fund (ticker) | One-year return | Five-year annualized return | Expense ratio |
| VanEck Semiconductor ETF Fund (SMH) | 74.3% | 29.0% | 0.35% |
| Invesco Semiconductors ETF Fund (PSI) | 92.2% | 21.9% | 0.56% |
| iShares Semiconductor ETF (SOXX) | 70.2% | 21.9% | 0.34% |
| First Trust Nasdaq Semiconductor ETF (FTXL) | 89.6% | 21.2% | 0.60% |
| State Street SPDR S&P Semiconductor ETF Fund (XSD) | 52.7% | 14.7% | 0.35% |
Source: Data from Morningstar, as of March 26, 2026
How MarketWise Selected These Funds
MarketWise chose its best semiconductor funds based on the following criteria:
- Funds with exposure to the semiconductor industry
- Funds with at least five years of strong returns
- A low expense ratio
- No leveraged or inverse funds
1. VanEck Semiconductor ETF Fund (SMH)
This fund tracks the MVIS US. Listed Semiconductor 25 Index, which includes 25 semiconductor production and equipment companies.
Top holdings: Nvidia, Taiwan Semiconductor Manufacturing (TSM), Broadcom (AVGO), and ASML (ASML)
2. Invesco Semiconductors ETF Fund (PSI)
This ETF tracks the Dynamic Semiconductor Intellidex Index, which includes 30 U.S. chip stocks based on factors such as earnings momentum, price momentum, and value.
Top holdings: KLA (KLAC), Advanced Micro Devices (AMD), Broadcom, and Texas Instruments (TXN)
3. iShares Semiconductor ETF Fund (SOXX)
This passive fund tracks the NYSE Semiconductor Index, which includes the 30 largest U.S.-listed semiconductor stocks by market cap.
Top holdings: Broadcom, Nvidia, Micron Technology (MU), and Advanced Micro Devices
MORE: Nvidia is rarely this undervalued
4. First Trust Nasdaq Semiconductor ETF Fund (FTXL)
This ETF tracks the Nasdaq U.S. Smart Semiconductor Index, which includes 30 to 50 stocks based on factors such as gross income, return on assets, and momentum.
Top holdings: Broadcom, Intel (INTC), Nvidia, and Qualcomm (QCOM)
5. State Street SPDR S&P Semiconductor ETF Fund (XSD)
This fund tracks the S&P Semiconductor Select Industry Index, which includes equal-weighted positions in large-, mid-, and small-cap semiconductor companies.
Top holdings: Cirrus Logic (CRUS), Marvell Technology (MRVL), Power Integrations (POWI), and Lattice Semiconductor (LSCC)
Regards,
James Royal
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