5 Semiconductor ETFs With the Highest Exposure to NVIDIA
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Riding high on favorable legislation (the CHIPS and Science Act) and strong demand for faster and more efficient AI chips, the semiconductor industry has outperformed the broader market by a wide margin — a year-to-date gain of about 35% for the Dow Jones U.S. Semiconductors Index compared to about 1.5% for the Dow Jones Industrial Average.
Leading the pack is NVIDIA with an eye-watering 170% year-to-date gain, followed by rival chipmaker AMD’s nearly 90% YTD return. Both chipmakers are among the top S&P 500 performers for 2023.
NVIDIA is a growth stock and can go through wild price swings in the short term. But if you don’t have the risk appetite for individual stocks, you can also invest in semiconductor exchange-traded funds or ETFs. These ETFs expose investors to numerous parts of the semiconductor industry and can pad one stock’s downside with another’s gains.
Top 5 Semiconductor ETFs with NVIDIA
1. ProShares Ultra Semiconductors (USD)
Description: The USD is a leveraged ETF — it will use debt and non-stock investments to boost the fund’s overall returns. The fund aims to amplify returns twice that of the Dow Jones U.S. Semiconductors Index. The rewards can be sweet but approach it cautiously — because it leverages debt, you can lose more than your initial investment. If you’re going to trade in leveraged ETFs, it’s essential to know what you’re getting into. (Learn more about leveraged ETFs.)
NVIDIA Weighting: 22.95%
Year-to-date return: around 115%.
Expense ratio: 0.95%.
2. VanEck Semiconductor (SMH)
Description: The SMH contains the top 25 semiconductor companies worldwide.
NVIDIA weighting: 15.15%
Year-to-date return: around 39%.
Expense ratio: 0.35%.
3. iShares Semiconductor (SOXX)
Description: This is your bread-and-butter ETF for semiconductors. The fund contains the 30 largest chip makers in the U.S. and manages $7.34 billion in assets.
NVIDIA weighting: 9.89%
Year-to-date return: around 32%.
Expense ratio: 0.35%.
4. Invesco PHLX Semiconductor (SOXQ)
Description: SOXQ tracks the 30 largest U.S.-listed companies in the semiconductor business.
NVIDIA weighting: 9.85%
Year-to-date return: Around 32%
Expense ratio: 0.19%
5. Direxion Daily Semiconductor Bull 3X Shares (SOXL)
Description: SOXL is a leveraged inverse ETF — it seeks to outperform a semiconductor index rather than passively follow it. In this case, the fund’s goal is to triple the performance of the ICE semiconductor index for a single day. But the fund can also compound your losses and will likely underperform passive semiconductor ETFs over long periods. This isn’t an ETF for long-term investors but for traders who want to take a one-day risk at amplifying returns. Like the USD ProShares Ultra Semiconductors ETF, this is for experienced traders only.
NVIDIA weighting: 9.12%
Year-to-date return: around 103%.
Expense ratio: 0.94%.
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The author owned shares in NVIDIA at the time of publication.