The 5 Best Semiconductor ETFs of 2023 by Performance

The 5 Best Semiconductor ETFs of 2023 by Performance

Most of these funds have dominated the entire ETF universe for 10 years or more.

kent
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Research Lead
Reviewed by: etf.com Staff
,
Edited by: Mark Nacinovich

Semiconductors are crucial components in modern technology and play a fundamental role in various electronic devices and systems, including artificial intelligence applications. For investors wanting to gain access to this rapidly growing technology, exchange-traded funds can offer low-cost, diversified exposure to a range of semiconductor-related companies. 

See a list of the best semiconductor ETFs of 2023 by performance and learn how artificial intelligence can continue to drive gains for these funds in the future. 

What Is a Semiconductor ETF?

A semiconductor ETF is a type of exchange-traded fund that focuses on companies involved in the semiconductor industry. These ETFs often track an index comprised of semiconductor stocks, providing investors with diversified exposure to a range of related companies, such as semiconductor manufacturers, equipment suppliers and companies involved in semiconductor design. 

Examples of semiconductor stocks include Nvidia Corp. (NVDA), Advanced Microdevices Inc. (AMD) and Intel Corp. (INTC). 

AI Chips Rely on Semiconductors

Semiconductors are crucial for the growth of artificial intelligence because of their unique properties that enable the processing and manipulation of vast amounts of data, a key requirement for AI applications.  

AI tasks, especially those involving deep learning and neural networks, require immense computational power. Semiconductors, particularly high-performance central processing units and graphics processing units, or CPUs and GPUs, respectively, are essential for executing complex algorithms and performing parallel processing needed for AI computations. 

Semiconductors play multiple other crucial roles in AI applications, including efficient memory and storage management, customized architectures, energy efficiency and the development of quantum computing. 

The 5 Best Semiconductor ETFs of 2023

TickerFundExpense RatioAUM2023 Return
SMH VanEck Semiconductor ETF 

0.35%

$10.9B

65.70%

SOXXiShares Semiconductor ETF

0.35%

$9.6B

57.36%

SOXQInvesco PHLX Semiconductor ETF

0.56%

$168.7M

56.87%

FTXLFirst Trust Nasdaq Semiconductor ETF

0.60%

$1.2B

44.88%

SEMIColumbia Seligman Semiconductor and Technology ETF

0.75%

$29.9M

38.02%

Data as of Dec. 12, 2023. Leveraged ETFs were not included in our search.

VanEck Semiconductor ETF  

The VanEck Semiconductor ETF (SMH) tracks a market-cap-weighted index of 25 of the largest U.S.-listed semiconductors companies. Midcap companies and foreign companies listed in the U.S. can also be included in the index.  

  • 2023 return: 65.70%  
  • Assets under management: $10.9B 
  • Expense ratio: 0.35%  

iShares Semiconductor ETF

The iShares Semiconductor ETF (SOXX) tracks a modified market-cap-weighted index of 30 U.S.-listed semiconductor companies, including manufacturers of materials with semiconductors that are used in electronic applications and providers of services or equipment associated with semiconductors.  

  • 2023 return: 57.36%  
  • Assets under management: $9.6B  
  • Expense ratio: 0.35% 

Invesco PHLX Semiconductor ETF

The Invesco PHLX Semiconductor ETF (SOXQ), tracks a modified market-cap-weighted index of 30 U.S.-listed semiconductor companies involved in the design, distribution, manufacturing and sale of semiconductors. Investors should note that SOXQ’s portfolio may include some foreign companies with American depositary receipt, or ADR, listings in addition to its U.S.-listed stocks. 

  • 2023 return: 56.87%  
  • Assets under management: $168.7M  
  • Expense ratio: 0.56%  

First Trust Nasdaq Semiconductor ETF

The First Trust Nasdaq Semiconductor ETF (FTXL) tracks an index of the most liquid U.S. semiconductor companies, weighted according to factors related to value, volatility and growth. While many funds perform a basic liquidity screen as part of their index construction and rebalancing, FTXL is noteworthy because it goes beyond the basic screen and uses liquidity selection. 

  • 10-year return: 44.88%  
  • Assets under management: $1.2B  
  • Expense ratio: 0.60% 

Columbia Seligman Semiconductor and Technology ETF

The Columbia Seligman Semiconductor and Technology ETF (SEMI) is an actively managed fund that seeks capital appreciation by investing in domestic or foreign semiconductor and technology-related companies. The fund uses the Fidelity nontransparent model and generally invests in 30-50 high-conviction semiconductor or semiconductor-related companies. 

  • 10-year return: 38.02%  
  • Assets under management: $29.9M  
  • Expense ratio: 0.75% 

Semiconductor ETFs Lead 10-Year Performance

Semiconductor ETFs lead all other fund types in our list of the best-performing ETFs of the past 10 years. The top-performing ETF over that period was the VanEck Semiconductor ETF (SMH), which produced an eye-popping 25% annualized 10-year return. 

The decade of dominance from semiconductors is because they power a wide range of applications found in top-selling tech devices over the last 10 years, including personal computers, smartphones and gaming consoles. In 2023, artificial intelligence drove the superior performance, especially with stocks like NVDA, which is up more than 220% for the year. 

The Future of Semiconductor ETFs

The performance of semiconductor ETFs is influenced by the overall health and growth prospects of the semiconductor industry. Factors such as increasing demand for electronic devices, advancements in technology and innovation within the industry are sure to affect the performance of these ETFs in the future. Furthermore, as AI technology continues to advance, so does the need for increasingly sophisticated semiconductors to support the evolving landscape of AI applications. 

Kent Thune is Research Lead for etf.com, focusing on educational content, thought leadership, content management and search engine optimization. Before joining etf.com, he wrote for numerous investment websites, including Seeking Alpha and Kiplinger. 

 

Kent holds a Master of Business Administration (MBA) degree and is a practicing Certified Financial Planner (CFP®) with 25 years of experience managing investments, guiding clients through some of the worst economic and market environments in U.S. history. He has also served as an adjunct professor, teaching classes for The College of Charleston and Trident Technical College on the topics of retirement planning, business finance, and entrepreneurship. 

 

Kent founded a registered investment advisory firm in 2006 and is based in Hilton Head Island, SC, where he lives with his wife and two sons. Outside of work, Kent enjoys spending time with his family, playing guitar, and working on his philosophy book, which he plans to publish in the coming year.