SOXX recently outperformed SMH over the one-year period cited in the source article, but that result is not enough to establish that one semiconductor ETF is permanently superior. The same article showed SMH leading over five- and ten-year windows. Opposite rankings across periods are a reminder that the choice is mainly about index construction, concentration and portfolio fit rather than selecting the fund with the latest winning return.
The funds own overlapping companies through different rules
VanEck says SMH tracks the MVIS US Listed Semiconductor 25 Index, which favors large, liquid semiconductor producers and equipment companies. As of October 6, Nvidia represented 19.52% of assets, Taiwan Semiconductor 9.40% and AMD 5.68%. The fund held 26 positions including cash items, and its expense ratio was 0.35%.
iShares says SOXX tracks an index of U.S.-listed semiconductor equities across the value chain. Its stated expense ratio was 0.33%. The small fee difference amounts to roughly $2 per year for each $10,000 invested before compounding, so holdings and weight limits are more likely to drive meaningful performance divergence.
Concentration explains much of the trade-off. A larger Nvidia weight can help when Nvidia leads the sector and hurt more when leadership reverses. A more distributed portfolio may capture gains from memory, analog, equipment or design-software companies when returns broaden. Neither structure eliminates semiconductor cyclicality; both remain concentrated sector funds exposed to inventory cycles, capital spending, export controls and AI expectations.
Return comparisons require consistent dates
Sponsor pages may display daily, month-end or quarter-end figures, while media articles can use market-price returns through another date. Investors should compare total returns for the same endpoint and confirm whether dividends are reinvested. The source article's recent and long-run comparisons are useful directionally, but current sponsor data should govern any decision.
Taxes can overwhelm a modest structural preference. Selling a large SMH gain in a taxable account may create a capital-gains bill that takes years of incremental SOXX outperformance to recover. Redirecting new contributions or rebalancing inside a tax-advantaged account can avoid making a return chase needlessly expensive.
iShares also disclosed a forward stock split scheduled for November 2026. A split changes the share count and price per share, not the economic value of the holding.
The practical decision is to choose the index rules and concentration profile that fit the portfolio, then review them periodically. Recent performance should prompt due diligence, not an automatic switch.