The semiconductor trade has officially shifted from a niche tech sub-sector to a dominant driver of broader equity momentum. We are currently tracking 28 ETFs that maintain a greater than 50% allocation to semiconductors—a level of concentration that highlights just how heavily capitalized this thematic trade has become.
I’ve aggregated the data for this group (using averages for returns/valuation and sums for scale) to illustrate the current landscape. To provide context on how different methodologies are navigating this environment, I’ve also broken out SMH (Market Cap Weighted) and XSD (Tiered Equal Weight) as pure-play reference points.
The Scale and Performance
The structural move into the semiconductor sector has been sustained and massive. The group’s aggregate scale reflects significant institutional and retail adoption:
- Total AUM: $144.01 Billion
- Cumulative 1Y Fund Flows: $28.08 Billion
- Total Return (1Y): The group average of 100.77% is nearly 4x the SPY’s 28.79%.
Methodology Benchmarks
- SMH (Market Cap): 141.87% return | 14.34x P/S | 25.91% Sales Growth
- XSD (Tiered Equal Weight): 148.53% return | 8.15x P/S | 15.97% Sales Growth
Fundamentals vs. Valuations
While the fundamental sales growth across these portfolios is objectively strong, it has been met with a substantial expansion in multiples. Investors are actively paying a steep premium for this growth:
- Sales Growth (TTM): The group average is 21.87%, significantly outperforming the broader market (SPY at 12.38%).
- Price-to-Sales (NTM): The valuation premium is notable. The group average sits at 8.95x, while the highly concentrated, market-cap-weighted SMH is currently trading at 14.34x (compared to the SPY’s 3.05x).
Growth vs. Valuation in Semiconductor ETFs. Click here to access the interactive chart on ETF Action.
Top ETF Flow & Performance Leaders (>50% Semi Exposure)
Below is a snapshot of notable funds within this >50% allocation cohort, sorted by recent 1-Year Total Return. The sheer dispersion between top-heavy market-cap approaches and alternative weighting schemes underscores the importance of looking under the hood.
| Ticker | Fund Name | AUM ($MM) | 1Y TR | 1Y Flow ($MM) |
|---|---|---|---|---|
| Group | Aggregate / Average | $144,009 | 100.97% | $28,817 |
| AIS | VistaShares Artificial Intelligence Supercycle ETF | $547 | 190.15% | $360 |
| FTXL | First Trust Nasdaq Semiconductor ETF | $2,311 | 186.04% | $736 |
| PSI | Invesco Semiconductors ETF | $2,433 | 180.74% | $494 |
| CHPS | Xtrackers Semiconductor Select Equity ETF | $79 | 178.08% | $41 |
| SOXX | iShares Semiconductor ETF | $34,173 | 148.70% | $2,952 |
| SOXQ | Invesco PHLX Semiconductor ETF | $1,981 | 144.95% | $657 |
| SMH | VanEck Semiconductor ETF | $62,916 | 133.84% | $7,635 |
| SHOC | Strive U.S. Semiconductor ETF | $236 | 130.82% | $32 |
| SMHX | VanEck Fabless Semiconductor ETF | $229 | 103.23% | $90 |
| IGPT | Invesco AI and Next Gen Software ETF | $1,066 | 102.27% | $156 |
| BAI | iShares A.I. Innovation and Tech Active ETF | $15,057 | 92.30% | $10,470 |
| KSTR | KraneShares SSE STAR Market 50 Index ETF | $112 | 87.06% | $50 |
| ARTY | iShares Future AI & Tech ETF | $3,270 | 84.81% | $1,176 |
| QTUM | Defiance Quantum ETF | $4,761 | 77.57% | $2,024 |
| QQQA | ProShares Nasdaq-100 Dorsey Wright Momentum ETF | $37 | 69.29% | $18 |
| FAI | First Trust Bloomberg Artificial Intelligence ETF | $57 | 60.84% | $33 |
| SPTE | SP Funds S&P Global Technology ETF | $160 | 60.29% | $61 |
| IXN | iShares Global Tech ETF | $8,901 | 59.05% | $1,117 |
| TTEQ | T. Rowe Price Technology ETF | $215 | 54.12% | $1 |
| SNSR | Global X Internet of Things ETF | $231 | 31.04% | -$46 |
The Bottom Line: The growth in the semiconductor space is very real, but investors are paying a hefty premium to access it right now. When the market-cap-weighted pure play (SMH) is trading at nearly 5x the valuation of the S&P 500, the margin for error on future earnings execution becomes razor-thin. We will be watching to see if these fundamentals can continue to outrun historical multiple expansions.
