6 Best-Performing Semiconductor ETFs for June 2024

If you don’t have the risk appetite for individual semiconductor stocks like NVIDIA, you can invest in semiconductor ETFs.
Steven Porrello
Sam Taube
By Sam Taube and  Steven Porrello 
Updated
Edited by Chris Davis
semiconductor ETFs

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Riding high on favorable legislation (the CHIPS and Science Act) and strong demand for faster and more efficient chips for AI and cryptocurrency applications, the semiconductor industry outperformed the broader market by a wide margin in 2023. And as we approach the second half of 2024, that trend is holding true this year, too. One company leading the pack is NVIDIA (NVDA), with a one-year gain of more than 200%. It remains one of the top S&P 500 performers for 2024.

Many semiconductor stocks are growth stocks — that means they 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.

The chart below compares the year-to-date performance of the VanEck Semiconductor ETF (SMH) — the largest semiconductor ETF, with around $18 billion in assets under management — to the performance of the SPY S&P 500 ETF.

Source: FinViz.

6 best semiconductor ETFs by one-year performance

Below is a list of the top six ETFs that have substantial exposure to semiconductor stocks like NVIDIA, ordered by one-year performance.

Ticker

Company

Performance (Year)

SMH

VanEck Semiconductor ETF

66.62%

SOXQ

Invesco PHLX Semiconductor ETF

48.02%

SOXX

iShares Semiconductor ETF

47.27%

SHOC

Strive U.S. Semiconductor ETF

44.77%

FTXL

First Trust Nasdaq Semiconductor ETF

42.27%

PSI

Invesco Semiconductors ETF

40.57%

Source: VettaFi and FinViz. Stock data is current as of market close on May 31, 2024, and is intended for informational purposes only. This list excludes leveraged and single-stock ETFs.

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Types of semiconductor ETFs

All of the funds shown above are thematic ETFs, but there are a few other types of semiconductor ETFs to be aware of, such as single-stock ETFs and leveraged ETFs.

  • Single-stock ETFs, such as the GraniteShares 1.5x Long NVDA Daily ETF (NVDL), seek to deliver some multiple of the daily returns of an individual semiconductor stock. (The fund in question returns 1.5 times the daily return of NVIDIA, for example). These tend to be used for high-risk, short-term speculation on a single company.

  • Leveraged ETFs, such as the Direxion Daily Semiconductor Bull 3x Shares (SOXL), seek to deliver some multiple of the daily return of an entire index — three times the return of the NYSE Semiconductor Index, in the case of the Direxion fund. Like single-stock ETFs, they are often used for speculative trading.

  • Thematic ETFs, such as the First Trust Nasdaq Semiconductor ETF, are basically just semiconductor index funds, and may be used for more long-term investing.

How to buy semiconductor ETFs

If you don't have an investment account — such as a brokerage account or an individual retirement account (IRA) — you'll need one of those to invest in semiconductor ETFs.

Then, you'll need to determine how semiconductor ETFs fit into your portfolio — and which kind you want. It's important to research ETFs before buying, just as you'd research stocks.

If you're day trading with a little bit of "play money," and you don't mind taking on a lot of risk for a potential short-term profit, single-stock ETFs or leveraged ETFs in the semiconductor space might be what you're looking for.

» Looking for diversification? Check out the top S&P 500 ETFs.

If you're looking to invest in semiconductor stocks for the long-term, however, you may find a thematic semiconductor ETF to be less volatile.

» Ready to get started? Learn how to invest in ETFs.

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Neither the author nor editor owned shares in the aforementioned investments at the time of publication.

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