Semiconductors ETF: What SOXX, XSD and SMH Actually Hold

What each fund tracks

A chip fund is only as broad as its index. All three funds here are index funds, and each index draws the line around "semiconductor company" in its own way.

SOXX "seeks to track the investment results of an index composed of U.S.-listed equities in the semiconductor sector," according to its summary prospectus. That index is the NYSE Semiconductor Index, which measures the 30 largest U.S.-listed semiconductor companies.

XSD tracks the S&P Semiconductor Select Industry Index. As of July 31, 2026, that index held 47 stocks, per the fund's summary prospectus.

SMH tracks the MVIS US Listed Semiconductor 25 Index. To qualify, "companies must generate at least 50% of their revenues from semiconductors," per the fund's summary prospectus dated February 1, 2024. That is the most recent SMH filing we reviewed for this post, so its figures are older than the other two. Check the current prospectus before relying on them.

So the three funds hold 30, 47 and 25 stocks. The count matters less than how much money goes into each one, which is where the funds split apart.

How the weighting works

XSD's prospectus has one short sentence that explains most of how the fund behaves: "The Index is modified equal weighted."

In an equal-weight index, a mid-size chip maker starts each rebalance at close to the same weight as the largest company in the industry. Here is an illustrative bit of math: if 47 stocks were weighted perfectly equally, each would get about 2% of the fund. The word "modified" means the real weights differ from that even split, and they drift between rebalances as prices move.

SMH sits at the other end. As of December 31, 2023, its index held 25 securities with market caps running from about $9.0 billion to $1,223.1 billion, per the 2024 prospectus. The weighted average market cap was $405.4 billion.

Look at that average next to the low end of the range. A weighted average that far above the smallest holding tells you the largest companies carried most of the weight on that date.

SOXX's index is defined by size too. It takes the 30 largest U.S.-listed chip companies, so smaller names that make it into XSD's 47 may not appear in SOXX at all.

Fees and turnover

The fee tables are close to a tie. SOXX lists total annual fund operating expenses of 0.33% (July 31, 2026 prospectus). XSD lists 0.35% (October 30, 2026 prospectus). SMH listed 0.35% in its February 1, 2024 prospectus.

An illustrative example: on a $10,000 position held for a year, 0.33% works out to about $33 and 0.35% to about $35. The $2 gap is small next to how much a sector fund can move in a single day.

Turnover shows a wider spread. In its most recent fiscal year, XSD's turnover rate was 48% of the average value of its portfolio. SOXX's was 33%. SMH's was 18%, per its 2024 filing.

Turnover measures how much of the portfolio the fund bought and sold during the year. Trading has costs, such as commissions and bid-ask spreads, and those costs don't show up in the expense ratio. They come out of the fund's returns.

XSD having the highest turnover fits its design. An equal-weight fund has to sell some of what went up and buy some of what went down to get back to its target weights, and that takes more trading than letting winners grow.

Concentration is the point, and the risk

A broad market fund spreads money across many industries. A chip fund does the opposite on purpose, and the filings say so in plain terms.

SOXX's prospectus says the fund will concentrate, meaning it will hold 25% or more of its total assets, in a particular industry. SMH's prospectus says "The Fund is classified as a non-diversified fund under the Investment Company Act of 1940." A non-diversified fund is allowed to put a larger share of its assets into fewer companies than a diversified fund can.

Investors considering a chip fund often already own a lot of the same companies through a broad index fund. Checking the overlap between the two is a useful step before adding more. Browse the semiconductors tag on MarketPlays to see which symbols other investors group together.

The industry behind the funds

The Federal Reserve tracks how much the U.S. chip industry makes. Its industrial production index for semiconductors and other electronic components read about 198.6 in September 2026, with 2017 set to 100 (FRED series IPG3344S).

Put simply, U.S. output in this category was roughly double its 2017 level.

That number needs a caveat. It measures physical output from U.S. plants. It says nothing about stock prices, and many chip companies listed in the U.S. design their products here and have them made overseas. A fund's return depends on what investors pay for its holdings' profits, and that can rise or fall while factory output moves the other way.

Key takeaways

• SOXX, XSD and SMH charge nearly the same fee: 0.33%, 0.35% and 0.35% in the prospectuses cited above.
• XSD's index is modified equal weighted across 47 stocks (as of July 31, 2026), so smaller chip companies count for more than they do in a size-based fund.
• SMH's index held 25 securities with a weighted average market cap of $405.4 billion as of December 31, 2023, which points to heavy weight in the largest names.
• Turnover ranged from 18% (SMH, 2024 filing) to 48% (XSD), and trading costs are not part of the expense ratio.
• SMH is classified as non-diversified, and SOXX states it will hold 25% or more of assets in one industry.

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