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 five funds below represent tried-and-true semiconductor ETFs. Many semiconductor funds have sprung up in recent years to capitalize on 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) | 157.8% | 40.8% | 0.35% |
| Invesco Semiconductors ETF Fund (PSI) | 228.6% | 35.7% | 0.56% |
| iShares Semiconductor ETF (SOXX) | 192.3% | 36.5% | 0.34% |
| First Trust Nasdaq Semiconductor ETF (FTXL) | 226.3% | 36.2% | 0.60% |
| State Street SPDR S&P Semiconductor ETF Fund (XSD) | 166.3% | 29.4% | 0.35% |
Source: Data from Morningstar, as of June 22, 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.
This fund is the largest semiconductor-focused ETF on the market, and it charges a reasonable expense ratio. While its returns were the lowest in this group over the last year, its five-year returns have been the best of the bunch.
Assets under management: $84.5 billion
Top holdings: Nvidia, Taiwan Semiconductor Manufacturing (TSM), Micron Technology (MU), Intel (INTC), Advanced Micro Devices (AMD)
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.
This ETF has among the best one-year returns in this group, and its five-year performance sits right in the middle of the pack. The somewhat higher expense ratio is notable, but it shouldn’t knock the fund out of contention for your investment dollars.
Assets under management: $2.9 billion
Top holdings: Applied Materials (AMAT), KLA (KLAC), Micron Technology, Lam Research (LCRX), Intel
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.
This ETF has posted one-year and five-year returns that sit right in the middle of the group, and, those combined with its group-leading expense ratio – just a hair cheaper than two other funds mentioned here – make it a great choice.
Assets under management: $46.7 billion
Top holdings: Micron Technology, Advanced Micro Devices, Nvidia, Broadcom (AVGO), Intel
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.
This fund posted the highest one-year returns on this list, but also has the highest expense ratio. If the fund can continue to outperform over time, then the extra cost could be worth it.
Assets under management: $2.9 billion
Top holdings: Intel, Micron Technology, Marvell Technology (MRVL), Qualcomm (QCOM), Advanced Micro Devices
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.
This ETF holds stocks that are not always the top-tier names found in other funds, in part due to its modified equal-weight strategy – and a low expense ratio.
Assets under management: $4.2 billion
Top holdings: MaxLinear (MXL), Marvell Technology, Astera Labs (ALAB), Intel, Micron Technology
Are Semiconductors a Good Long-Term Investment?
Semiconductors have been a good long-term investment, as evidenced by the strong five-year returns of the funds on this list. These funds have trounced the performance of the S&P 500 index, the bellwether stock index. However, it’s important to understand that much of those returns have occurred in the last year, as chip stocks have soared.
Because of such strong recent performance, investors should expect returns to come “back down to Earth” over time. That doesn’t mean stock returns will be poor. Rather, it’s all but impossible for a stock or fund to generate these kinds of returns over extended periods.
After seeing such strong recent returns, investors who like semiconductor funds should take a long-term view on the market and invest cautiously. For example, by dollar-cost averaging – adding the same amount of money to an investment regularly – investors can help reduce the risk of buying at a relatively high point. Dollar-cost averaging can help reduce the risk of investing all your money at once while still achieving solid returns.
Types of Semiconductor ETFs
The best semiconductor ETFs above are all index funds, meaning they track a specific index and merely replicate its 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.
No single approach is necessarily better, though each type may perform better in certain market environments. For example, a market-cap-weighted fund will perform better when large-cap stocks do well.
Regards,
James Royal, PhD
Editor’s Note: Marc Chaikin, the founder of Chaikin Analytics, has built an award-winning system that turned “bearish” on software stocks two months before they crashed this year. Now, he’s warning that one AI lab’s breakthrough could CRASH the Nasdaq while igniting a $500 trillion wealth transfer. This 60-year Wall Street legend has found a little-known $40 “pre-IPO backdoor” into the private startup behind this economic sea change. Click here for its name and ticker symbol.
