SMH ETF

What are you actually investing in?

When you invest in SMH, you are investing in shares of companies that build the "brains" of the digital economy – from chip design to the manufacturing equipment used to produce them.

SMH's returns are generated through:

• increases or decreases in the market value of semiconductor company shares in the portfolio; 
• the fund's dividend yield (~0.30% per year).

The investment is directly linked to the business performance of companies that produce processors, graphics accelerators, memory chips, lithography equipment and other key components. Key drivers of returns include demand for AI infrastructure, cloud computing and consumer electronics.

Fund composition

SMH's portfolio includes 26 companies spanning the entire semiconductor value chain:

• Chip design and GPU – companies creating processors and accelerators for AI, data centers and consumer electronics.  
  NVIDIA (19.44%), Broadcom (7.85%), AMD (4.73%), Qualcomm (4.18%)
• Contract manufacturing – companies producing chips on behalf of designers.  
  TSMC (11.51%)
• Lithography and equipment – companies manufacturing the equipment used to produce chips.  
  ASML (5.06%), KLA (4.71%), Lam Research (4.59%), Applied Materials (4.58%)
• Analogue and industrial chips – companies producing components for automotive, industrial and telecommunications applications. 
  Analog Devices (4.66%), Texas Instruments (4.63%)
• Memory and storage – manufacturers of memory chips for servers, smartphones and data centers.  
  Micron (4.48%), Intel (4.37%)
• Electronic design automation (EDA) – companies developing software for chip design.  
  Synopsys (2.55%), Cadence Design (2.48%)

The fund's composition is reviewed in accordance with the MVIS index methodology.

How the structure works

SMH uses a standard ETF structure:

• company shares are held within the fund's custodial infrastructure through licensed custodians; 
• the fund's structure is fully transparent and disclosed daily; 
• the fund is overseen by US regulators and auditors.

The fund's AUM stands at approximately $40.72 billion – the largest semiconductor ETF in the world. As an index fund, SMH follows the composition and weightings of the MVIS US Listed Semiconductor 25 Index.

Fees

Investor returns are generated through changes in the fund's market value. You purchase a share of SMH at the current price and realise it upon exit.

• Total Expense Ratio (TER): 0.35% per year – one of the lowest among thematic ETFs.

When purchasing SMH through the Regolith platform, an entry fee of 2% of the transaction amount applies. Performance fee: 0%.

The role of SMH in an investment portfolio

SMH serves as a tool for participating in the growth of the semiconductor industry. The fund can be used for the following purposes:

• Exposure to AI infrastructure – every AI server, every data center, every machine learning model runs on semiconductors. SMH provides direct exposure to the companies that build this infrastructure. 
• Foundation of the digital economy – semiconductors are used in cloud computing, smartphones, automobiles, medical equipment and industrial automation. Demand is growing across all segments. 
• Concentrated exposure – 26 of the sector's largest companies. No small-cap or speculative positions – only market leaders. 
• Alternative to individual stocks – instead of betting on NVIDIA or TSMC alone, the investor gains a basket of all key players across the value chain: from design to manufacturing and equipment. 
• Complement to broad tech ETFs – while AIQ or BOTZ cover the technology sector broadly, SMH focuses on the hardware foundation without which AI and cloud are impossible.

The semiconductor sector: current context

The semiconductor industry is at the centre of the global technology transformation. Over the past six years, SMH has delivered an annualised return of approximately 29.7% – one of the strongest among all sector ETFs.

Key growth drivers remain in place. Spending on AI infrastructure is growing exponentially: Microsoft, Google, Amazon and Meta are increasing capital expenditure on data centers every year. NVIDIA remains the dominant supplier of GPUs for AI model training. TSMC is expanding production capacity, including new fabrication plants in the US and Japan.

Semiconductors also play a key role in the automotive industry: every electric vehicle contains 3–5 times more chips than a combustion engine car. The rise of autonomous driving is creating additional demand.

For investors with a long-term horizon, the current level may present an opportunity.

Risks

Investing in SMH involves a number of factors typical of the technology sector:

• High volatility – SMH has a beta of 1.56, meaning significant swings relative to the broader market. Semiconductors are one of the most volatile sectors.
• Cyclicality – the semiconductor industry is subject to supply and demand cycles. Chip overproduction can lead to declining prices and margins.
• Concentration – NVIDIA and TSMC together account for approximately 31% of the fund. The results of two companies determine the performance of the entire ETF.
• Geopolitical risks – TSMC is located in Taiwan. An escalation of tensions in the Taiwan Strait could impact the entire semiconductor supply chain.
• High valuation – the fund's P/E ratio stands at 43.45, reflecting elevated market expectations. Any slowdown in AI investment could lead to a revaluation.
• Trade restrictions – export controls on chips and equipment (particularly to China) could affect company revenues.

As an equity instrument, the fund is subject to market fluctuations and does not guarantee positive returns. Investors may lose some or all of their investment.

Instrument parameters

• Ticker: SMH
• Type: Semiconductor companies ETF
• Exchange: NASDAQ
• Management type: Passive (index-tracking)
• Index: MVIS US Listed Semiconductor 25 Index
• Number of companies: 26
• AUM: approximately $40.72 billion
• Expense Ratio: 0.35%
• Beta: 1.56
• Dividend yield: ~0.30% per year
• ISIN: US92189F6768

Deposit and withdrawal terms on Regolith

SMH purchases are processed on a rolling basis without a fixed date. Trades are executed 1–3 times per week.

• Minimum investment period: 1 week
• Minimum amount: $50
• Entry fee: 2%
• Performance fee: 0%