Are you bullish on Nvidia (NASDAQ:NVDA), Taiwan Semiconductor Manufacturing (NYSE:TSM), Qualcomm (NASDAQ:QCOM), and other semiconductor stocks? If so, there's an exchange-traded fund (ETF) that you should consider that holds those any many other tech stocks. The VanEck Semiconductor ETF (NASDAQ:SMH) gives investors exposure to companies that are "involved in semiconductor production and equipment."
The fund is rebalanced every quarter and currently has 25 holdings. It isn't overly diverse given its fairly narrow focus. And companies based in the U.S. make up 77% of its holdings. At nearly 12%, Taiwan Semiconductor is the largest of the ETF's holdings, with Nvidia holding the second spot and accounting for just under 10%.
VanEck Semiconductor's expense ratio is 0.35%, which is modest compared to other ETFs. It also pays a yield of 1%. Over the past year, the fund's total returns (including dividends) are a negative 5% as investors have been selling growth stocks, particularly in tech. However, when looking at the past decade, the fund is up an incredible 685%.
For long-term investors who are willing to buy and hold, this can be an excellent fund to load up on right now. With some top names in tech, and those stocks falling heavily over the past several months, now might be an opportune time to get exposure to what should be a growing part of the industry in the future. While the VanEck Semiconductor ETF may be down of late, investors shouldn't expect it to stay there for long given the growth opportunities these companies possess.
