NEW YORK, July 28, 2026, 14:00 EDT — U.S. markets open
- At 1:44 p.m. EDT, SMH dropped 3.5% and SOXX declined 4.8%.
- Issuer data through Monday indicated SMH had risen 52.2% so far this year, while SOXX was up 71.5%.
The VanEck Semiconductor ETF NASDAQ:SMH declined to $529.23 on Tuesday. However, its concentrated holdings helped cushion the wider downturn in chip stocks. The iShares Semiconductor ETF NASDAQ:SOXX slid an additional 1.26 percentage points.
The difference is important as the return ranking for 2026 reverses direction. SMH lagged behind SOXX by 19.3 percentage points as of Monday.
Investors are deciding which segment of the cycle should be at the forefront, rather than selecting between similar groups of chips.
| Measure | SMH | SOXX |
|---|---|---|
| Intraday percentage change | -3.5% | -4.8% |
| Issuer-stated year-to-date performance through July 27 | +52.2% | +71.5% |
| Nvidia NASDAQ:NVDA portfolio share | 20.62% | 8.56% |
| Advanced Micro Devices NASDAQ:AMD portfolio share | 5.75% | 8.84% |
| Micron Technology NASDAQ:MU portfolio share | 5.31% | 8.29% |
| Total securities in fund | 26 | 30 |
| Annual expense fee | 0.35% | 0.34% |
Live updates were logged at about 1:44 p.m. EDT. SMH positions reflected data from July 27, while SOXX positions reflected July 24.
Nvidia gained 0.4%, offering one of the few areas of support. Shares of AMD declined 7.4%, with Micron losing 9.5%. Applied Materials NASDAQ:AMAT was down 8.4%.
A preliminary estimate of contributions shows the impact of the construction. Differences in the weights of Nvidia, AMD, and Micron accounted for around 0.56 percentage point of SMH’s relative outperformance, making up nearly half of Tuesday’s gap.
The method applies portfolio weights from the previous close alongside real-time share price changes. It does not factor in trading expenses or shifts in weights during the trading session.
Previous advances had extended past Nvidia, according to analysis distributed by Yahoo. The documented returns indicate SOXX reflected a greater share of that expansion.
SMH’s guidelines allow for high concentration. MarketVector imposes a 20% cap on major holdings at each rebalance. Between those quarterly adjustments, weights may fluctuate. As of Monday, Nvidia’s weighting was 20.62%.
The fund’s largest five holdings made up 47.4% of total assets, with its top 10 holdings comprising 71% precisely.
The decline also brought SMH down to a key technical level, hitting $518.40 and moving into the $510-$520 support zone noted by Seeking Alpha. The ETF then rebounded to trade above $529.
The ETF stayed roughly 21% under its 52-week peak of $671.83, further extending the pullback noted in the Trefis analysis on Monday.
History provides evidence, though not reassurance. According to Trefis, SMH has fallen by 10% or more on 15 occasions since 2005. Thirteen of those instances were followed by gains within the next year. The median return posted was 21%.
Purchasers continued to face a median further drop of 12%. In these periods, the median peak advance was 32%.
Global chip markets continued their decline on Tuesday. Concerns surfaced among investors regarding Chinese rivals and the funding of artificial-intelligence expansion. South Korea’s Kospi slipped 10.8%.
Dorian Carrell, head of multi-asset income at Schroders LON:SDR, said: “It’s healthy that the market’s questioning these things.” Reuters
Risks persist in both directions. A decisive fall beneath $510 may intensify the downward move. Losses in Nvidia could eliminate support for SMH, while a recovery in memory may shift momentum back towards SOXX.
The range of investor options is more limited than the fund titles imply. SMH provides greater weight to a single main leader, while SOXX distributes more investment among the other parts of the cycle.
