Investors gravitate to SMHX as the role of fabless semiconductor companies in AI advancements continues to grow; the fund provides exposure to both near-term AI infrastructure build-out and opportunities along the longer adoption curve.

VanEck is today celebrating two key milestones for its VanEck Fabless Semiconductor ETF (SMHX), which is marking its one-year anniversary and has also surpassed $100 million in assets.

SMHX is unique among ETFs targeting the semiconductor space and broader AI-driven investment opportunities in that it focuses on “fabless” chip companies, i.e., those focused on designing and marketing chips while outsourcing high-cost manufacturing efforts.

The fabless model allows these companies to focus on innovation and remain agile, a particularly important factor as AI continues to evolve rapidly.

“Fabless companies are critical to AI innovation as architectures become more complex and require faster design cycles. Until the introduction of SMHX, however, investors were not able to access a targeted portfolio of fabless semiconductor firms and too often found themselves underexposed to this key category,” said Nicholas Frasse, Product Manager at VanEck. “We’ve been very pleased with the response SMHX has generated in its first year on the market and with the range of use cases that have emerged, including as a concentrated entry point for those allocating new capital to AI, as a diversification tool for holders of our SMH ETF, and as a solution for those looking to reduce concentration risks from outsized positions in other AI-focused investments.”

The SMHX portfolio is designed to include leaders from across the AI hardware spectrum. Astera Labs, for example, provides high-speed interconnect solutions that are essential for AI data centers, while Arm designs CPU architectures optimized for AI processing at the edge. This type of differentiated, targeted approach allows SMHX to capture both the near-term AI infrastructure build-out and the longer adoption curve as AI continues to expand into devices, vehicles, and industrial systems.

“For all of the attention AI has generated recently, it is important to note that we remain in the early days of its growth and application,” continues Frasse. “Fabless chip companies are poised to play a major role as this story continues to unfold, and with SMHX, investors have a powerful tool for building a diversified portfolio of AI-related exposures.”

As mentioned above, VanEck also offers the VanEck Semiconductor ETF (SMH), by far the largest semiconductor ETF on the market with approximately $26.5 billion in assets.

VanEck regularly publishes research and updates focused on developments in AI and the semiconductor space, and on August 28^th, will be hosting a webinar recapping Nvidia’s most recent earnings announcement and relevant trends and developments. Registration for this event can be found here.

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Disclosures

This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities, financial instruments or digital assets mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, tax advice, or any call to action. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results, are for illustrative purposes only, are valid as of the date of this communication, and are subject to change without notice. Actual future performance of any assets or industries mentioned are unknown. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. The information herein represents the opinion of the author(s), but not necessarily those of VanEck or its other employees.

An investment in the VanEck Semiconductor ETF (SMH) and VanEck Fabless Semiconductor ETF (SMHX) may be subject to risks which include, among others, risks related to investing in the semiconductor industry, special risk considerations of investing in Taiwanese issuers, information technology sector, equity securities, small-, medium and large-capitalization companies, foreign securities, emerging market issuers, foreign currency, depositary receipts, issuer-specific changes, market, operational, index tracking, authorized participant concentration, new fund, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount and liquidity of fund shares, non-diversified, and index-related concentration risks, all of which may adversely affect the Fund. Small, medium and large-capitalization companies may be subject to elevated risks. Emerging market issuers and foreign securities may be subject to securities markets, political and economic, investment and repatriation restrictions, different rules and regulations, less publicly available financial information, foreign currency and exchange rates, operational and settlement, and corporate and securities laws risks.

Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of a Fund carefully before investing. To obtain a prospectus and summary prospectus, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.

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“Fabless chip companies are poised to play a major role as (the AI) story continues to unfold, and with SMHX, investors have a powerful tool for building a diversified portfolio of AI-related exposures,” Nicholas Frasse, Product Manager at VanEck.