CHPS vs SMH

Key Takeaways

• Different architectures: CHPS tracks the Solactive Semiconductor ESG Screened Index across roughly 50–60 holdings, while SMH tracks the MVIS US Listed Semiconductor 25 Index with just 25 names — a meaningful difference in concentration.
• Cost gap: CHPS charges a net expense ratio of 0.15%, less than half of SMH's 0.35%.
• Concentration risk: SMH's top holding, NVDA, approaches roughly 20% of assets, whereas CHPS caps individual names near 4.5%–5%, producing a more balanced portfolio.
• Liquidity profile: SMH holds tens of billions in assets and trades with deep liquidity, while CHPS is a newer, smaller fund with wider bid-ask spreads.
• Global scope: CHPS carries greater international exposure (including memory makers in Asia), while SMH skews more heavily toward U.S.-listed mega-cap names.
• Tickeron AI Verdict: CHPS — favored for lower cost, broader diversification, and reduced single-stock concentration.

Introduction

Semiconductors sit at the center of the artificial intelligence (AI) buildout, making semiconductor exchange-traded funds (ETFs) among the most closely watched thematic products in recent market cycles. CHPS and SMH both target the chip value chain, but they do not compete on identical terms. SMH is a mature, highly liquid mega-cap vehicle, while CHPS is a newer, ESG-screened (Environmental, Social, and Governance) fund with a broader, globally diversified portfolio. For investors weighing sector exposure, fund performance, and relative positioning, the choice hinges on whether concentration or diversification better suits their objectives. This ETF comparison examines the structural, cost, and risk differences between the two funds.

Xtrackers Semiconductor Select Equity ETF (CHPS) Overview

CHPS is a passively managed index ETF that seeks to track the Solactive Semiconductor ESG Screened Index. The underlying index selects semiconductor companies by free-float market capitalization after applying size, liquidity, and sustainability screens from Sustainalytics, excluding issuers that violate United Nations Global Compact principles or carry elevated ESG risk scores. The index selects the largest qualifying names, caps single-stock weights near 4.5%, and reconstitutes and rebalances quarterly.

The fund typically holds between roughly 50 and 62 securities, with the top 10 positions accounting for just under half of assets. Representative top holdings include AMD, MU, NVDA, INTC, ASML, TSM, LRCX, and MRVL, each in the low-to-mid single digits. Information Technology represents nearly all of the portfolio. Geographically, the fund allocates roughly 60% to the United States, with meaningful exposure to Taiwan, Japan, South Korea, and the Netherlands — including memory leaders such as SK Hynix and MediaTek. CHPS carries a 0.15% net expense ratio, launched in July 2023, and is classified as non-diversified.

VanEck Semiconductor ETF (SMH) Overview

SMH is a passively managed index ETF that seeks to replicate, before fees and expenses, the MVIS US Listed Semiconductor 25 Index. The index selects the largest and most liquid U.S.-listed companies involved in semiconductor production and equipment, weighted by market capitalization. The methodology favors industry leaders, resulting in a concentrated portfolio of 25 stocks plus cash.

The fund's dominant position is NVDA, at roughly 20% of assets, followed by TSM near 9%–10%. Other top holdings include AVGO, AMD, MU, INTC, TXN, ADI, KLAC, and ASML, with the top 10 accounting for roughly two-thirds of assets. Information Technology represents about 95% of the fund, with the United States at roughly 78% and Taiwan, the Netherlands, and South Korea making up most of the remainder. SMH has a 0.35% expense ratio, launched in December 2011, and manages tens of billions in assets (AUM, or assets under management), giving it exceptional trading liquidity.

Industry and Thematic Backdrop

Both funds are levered to the same structural tailwind: surging demand for accelerated computing, data-center infrastructure, and memory tied to AI workloads. This has lifted earnings across designers, foundries, and equipment makers alike. At the same time, the sector faces cyclical and geopolitical risks, including export controls, supply-chain concentration in Taiwan, inventory corrections in memory, and capital-expenditure sensitivity to interest-rate expectations. In this environment, leadership has rotated beyond a single mega-cap name into memory and semiconductor-equipment suppliers — a dynamic that favors funds with broader, more balanced exposure. Sector risks remain elevated given high valuations and the industry's history of pronounced drawdowns.

Performance and Positioning Comparison

Over recent months and market cycles, CHPS has demonstrated stronger relative momentum than SMH, aided by its lighter exposure to a single dominant mega-cap and its greater weight in memory and international equipment names that have led the latest rally. SMH's heavy concentration in NVDA amplifies its sensitivity to that one company's earnings and sentiment, producing higher single-stock risk. On volatility, both funds carry beta well above the broad market given their cyclical, high-growth nature. In terms of relative positioning, SMH offers deep liquidity and a cleaner proxy for the largest U.S.-listed chip leaders, while CHPS offers lower cost, broader diversification, and a less top-heavy risk profile. The trade-off is effectively concentration and liquidity versus breadth and cost efficiency.

AI Screener

Tickeron's AI Screener is an AI-powered stock and ETF discovery tool that helps traders and investors filter the market using technical patterns, fundamentals, trends, volatility, and AI-driven signals. Users can scan thousands of securities with customizable filters such as industry, market capitalization, technical indicators, price patterns, and performance metrics. The screener helps surface trade ideas, trending stocks, and breakout candidates more efficiently than manual screening. For investors evaluating the semiconductor space, it offers a fast way to compare relative strength and momentum across funds like CHPS and SMH.

Tickeron AI Verdict

Based on observable factors, Tickeron's AI would likely favor CHPS in the current environment. The fund's lower 0.15% expense ratio, broader diversification across roughly 50–60 names, ESG screen, and reduced single-stock concentration offer a structurally more balanced risk profile. Recent relative momentum in memory and international semiconductor names has also favored CHPS's exposure mix. SMH remains superior on liquidity, scale, and track record, but its roughly 20% weight in a single holding elevates idiosyncratic risk. On balance, the combination of cost efficiency, diversification, and trend consistency tilts the probabilistic verdict toward CHPS.

Disclaimer

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