The VanEck Semiconductor ETF (SMH) has generated returns roughly three times higher than those of its largest holding, Nvidia (NVDA), during 2026. As of midday on Sept. 30, the fund traded near $608 per share, representing an increase of about 69% from its $360.13 close on the last trading day of 2025. Over the same period, Nvidia shares rose approximately 23% from their year-end close of $186.50 to around $230.
The divergence in performance stems from the fund’s composition and the varying trajectories of its constituent stocks. Nvidia accounted for about 19% of the fund’s assets as of Sept. 29, down from roughly 21% at the end of 2025. The remaining portion of the portfolio is allocated to other semiconductor companies, many of which have outperformed the AI chip leader significantly this year.
Micron Technology (MU) shares climbed about 276% in 2026, while Intel (INTC) shares rose approximately 223% and Advanced Micro Devices (AMD) shares gained about 181%. In contrast, Broadcom, which comprised around 8% of the fund at the end of 2025, increased by only about 2%. Among the 23 other U.S.-traded stocks in the fund, more than two-thirds have outperformed Nvidia over the past year.
A rough calculation based on end-2025 weights suggests that Micron, AMD, and Intel collectively contributed about 32 percentage points to the fund’s 69% gain, whereas Nvidia contributed only around five points. This implies that nearly half of the fund’s total return originated from positions that represented only about 14% of its assets at the start of the year. These weights shift with each quarterly rebalance, making this an estimate rather than a precise accounting.
The performance gap reflects differing starting valuations and recent business developments rather than a decline in Nvidia’s fundamentals. Nvidia entered 2026 with a market value of approximately $4.5 trillion, while Micron was valued at around $320 billion. By mid-2026, Nvidia’s market value had fallen to under five times that of Micron, compared to roughly 14 times at the beginning of the year.
Micron’s fiscal third-quarter revenue for the period ended May 28, 2026, reached $41.5 billion, more than four times the $9.3 billion reported in the same period a year earlier. Intel’s revenue, which declined 4% year over year in the fourth quarter of 2025, climbed 25% in the second quarter of 2026. Nvidia’s revenue for its fiscal second quarter of 2027, ending July 26, 2026, surged 106% year over year to $96.2 billion.
The fund tracks the MVIS US Listed Semiconductor 25 Index, which weights holdings by market value but caps any single position at 20% during quarterly rebalances. Nvidia’s weight had drifted to around 24% by Sept. 3 before being reduced to approximately 19% following the September rebalance. This structural cap limits the influence of any single stock, allowing broader industry gains to drive overall fund performance while exposing investors to cyclical sectors such as memory chips.