GET DAILY SIGNALSCHPS vs SMH: Balancing Concentration and Diversification in Semiconductor ETFs
Key Takeaways
- CHPS holds roughly 60–65 global semiconductor names, while SMH concentrates on about 25–26 US-listed companies, creating very different diversification profiles.
- SMH is heavily dominated by NVDA at more than 20% of assets, whereas CHPS caps individual positions near 5–6%, reducing single-stock concentration risk.
- CHPS charges a lower expense ratio of 0.15% versus 0.35% for SMH.
- SMH is substantially larger and more liquid, while CHPS is a smaller, more diversified fund with meaningful international exposure.
- Both are passive, market-cap-weighted funds, but their differing index rules drive materially different relative positioning and volatility.
The Appeal of Semiconductor ETFs
Semiconductor ETFs have drawn significant attention from investors looking for exposure to artificial intelligence, cloud computing, and broader digitization trends. CHPS and SMH both focus on this space, yet they are not interchangeable. SMH offers a concentrated, US-listed approach with a mega-cap tilt, while CHPS delivers broader global diversification at a lower cost. Comparing the two reveals how differences in index construction, concentration levels, and geographic reach shape distinct risk and return characteristics.
CHPS: Broader Global Exposure
CHPS tracks a global semiconductor index, covering companies across the value chain from designers and memory makers to foundries and equipment providers. The fund typically holds 60–65 positions, which is wider than many peers. Top holdings often include NVDA, MU, AMD, AVGO, INTC, and TXN, along with international names such as Taiwan Semiconductor Manufacturing, ASML Holding, SK Hynix, and Tokyo Electron. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Individual positions generally stay in the low single digits, which helps limit concentration risk. Geographic exposure extends meaningfully to Taiwan, the Netherlands, South Korea, and Japan. The expense ratio stands at 0.15%, and the fund follows a passive strategy. One structural note is its smaller asset base, which can mean lighter trading liquidity compared with larger peers.
SMH: Concentrated US-Listed Focus
SMH follows the MVIS US Listed Semiconductor 25 Index, a market-cap-weighted benchmark of the largest US-listed semiconductor firms. It holds around 25–26 names and features notable concentration, with NVDA often exceeding 20% of assets. Other key holdings include Taiwan Semiconductor Manufacturing’s US-listed ADR, AVGO, AMD, MU, AMAT, TXN, ADI, and LRCX.
This structure provides strong exposure to leading players in AI accelerators and foundry services. The expense ratio is 0.35%. With tens of billions in assets and robust daily volume, SMH offers excellent liquidity. Its US-listed mandate means international exposure comes mainly through ADRs, which concentrates geographic risk.
Industry Context and Risks
Both ETFs operate in a semiconductor sector driven by AI infrastructure spending, demand for high-bandwidth memory, and ongoing capital investment in advanced manufacturing. Data-center growth has benefited GPU and accelerator designers, while memory companies have seen support from tight supply. Equipment suppliers and foundries have also gained from capacity expansions.
Cyclical and geopolitical factors remain relevant, including Taiwan’s manufacturing concentration, export controls, and inventory cycles. Interest-rate shifts can influence high-valuation names. These dynamics affect both funds, though SMH’s heavier weighting amplifies swings from individual stocks and regions relative to CHPS’s wider mix.
Performance Patterns and Positioning
In recent cycles, both ETFs have benefited from the AI-led rally, with SMH often advancing more during periods of strong mega-cap performance due to its NVDA weighting. That same concentration has increased volatility during pullbacks. From what I see, CHPS has shown more moderate movements thanks to lower single-stock weights and international diversification. Exposure to memory and Asian equipment names can provide some offset when US leaders pause, though currency and regional factors add another layer. In essence, SMH delivers higher-beta exposure to US-listed leaders, while CHPS offers broader sector participation with less concentration.
Exploring Tickeron’s AI Screener
In my own research process, I often turn to Tickeron’s AI Screener to quickly filter semiconductor holdings and compare ETF characteristics side by side. The tool lets me apply technical, fundamental, and volatility screens across thousands of names, which helps surface relative positioning without manual effort. It has become a practical part of evaluating how different funds align with specific portfolio goals.
Tickeron AI Verdict
Based on observable factors, Tickeron’s AI would likely lean toward CHPS for investors prioritizing cost efficiency and diversification, given its 0.15% expense ratio, lower single-stock concentration, and broader global footprint. Conversely, the AI would likely favor SMH for investors seeking maximum liquidity and concentrated exposure to sector leaders during periods of sustained mega-cap momentum. The probabilistic verdict therefore depends on the objective: CHPS offers a more balanced, lower-cost risk profile, while SMH provides higher-conviction, higher-beta positioning in the semiconductor complex.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
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I’m a trader and independent researcher. My interest lies at the intersection of financial markets, algorithms, and capital management. I develop data-driven tools and strategies and study algorithmic approaches to market analysis. I help turn complex market data into clear insights and practical systems. I believe technology should support, not replace, investment thinking
SMH's RSI Oscillator stays in oversold zone for 1 day
It is expected that a price bounce should occur soon.
Technical Analysis (Indicators)
Bullish Trend Analysis
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Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 09, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on SMH as a result. In 69 of 80 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 86%.
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Following a 3-day decline, the stock is projected to fall further. Considering past instances where SMH declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 81%.
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