Nvidia ETFs Rally as Chip Giant Hits Record Valuation
- SMH holds a 20.5% Nvidia allocation with $27.1B in assets.
- SHOC allocates 23.2% to Nvidia using a revenue-adjusted weighting.
- Flow patterns have diverged with SMH gaining $1.7B and SEMI seeing outflows.
Semiconductor-focused ETFs holding Nvidia Corp. (NVDA) posted strong monthly gains as the chip giant hit a record $3.92 trillion intraday market valuation, with three ETFs showing varying exposure levels and investor flows.
The VanEck Semiconductor ETF (SMH) holds $27.1 billion in assets under management with a 20.5% allocation to the Santa Clara-based company, according to FactSet data. SMH posted a 12.2% gain over the past month and attracted $859.3 million in net inflows during that period.
The rally comes as Nvidia attempted to surpass Apple Inc.'s (AAPL) previous closing record of $3.915 trillion set in December 2024, according to Reuters.
Wall Street's enthusiasm for artificial intelligence technology has driven massive demand for Nvidia's high-end processors, with the company's market value increasing nearly eight-fold since 2021, Reuters reported.
SMH, SEMI & SHOC Take Different Approaches
With 655 ETFs holding Nvidia stock, three funds demonstrate varying approaches to semiconductor exposure, from concentrated chip-focused strategies to broader technology themes that could affect how investors capture the AI boom's returns.
SMH tracks a market-cap-weighted index of 25 large U.S.-listed semiconductor companies, according to FactSet. The fund requires companies to derive 50% of revenues from semiconductor production or equipment manufacturing. Taiwan Semiconductor Manufacturing Co. (TSM) represents the second-largest holding at 11.2%, followed by Broadcom Inc. (AVGO) at 9%.
The Columbia Semiconductor and Technology ETF (SEMI) takes an active management approach with $25 million in assets and an 18.3% Nvidia weighting. SEMI posted a 7.4% monthly gain but experienced net outflows of $14.4 million over three months, according to FactSet data. The fund maintains a broader technology focus beyond pure semiconductors, including Microsoft Corp. (MSFT) at 11.1% and Apple at 8.8%.
Concentration Strategies Differ
The Strive U.S. Semiconductor ETF (SHOC) allocates 23.2% of its $103.2 million portfolio to Nvidia. SHOC gained 11.7% over the past month and attracted $9.5 million in net inflows, according to FactSet. The fund uses a revenue-adjusted market capitalization weighting for 30 semiconductor companies.
SHOC's methodology assigns companies a “Revenue Score” based on semiconductor exposure and a “Theme Score” for competitive positioning. Broadcom represents the second-largest holding at 17.8%, creating a more concentrated approach than SMH's diversified structure.
The three funds show mixed performance patterns over longer periods. SMH delivered a 56.9% three-month return compared to SEMI's 43.1% and SHOC's 58.5%, according to FactSet data. Year-to-date returns are closer, with SMH and SHOC both posting gains above 17% while SEMI has recorded a 9.3% increase.
Source: Factset
Flow patterns also diverged among the funds despite shared exposure to Nvidia's rally. SMH attracted $1.7 billion in three-month net inflows, while SEMI experienced outflows of $14.4 million and SHOC gained inflows of $10 million over the same period, according to FactSet.
