Best Semiconductor ETFs for 2025
Written by
Daria Uhlig
Edited by
Elizabeth Constantineau
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Semiconductor stocks can deliver big long-term gains, but they come with a “boom or bust” reputation. When the economy grows, demand for chips soars — but during slowdowns, it can drop sharply. This volatility was on display earlier this year when the iShares Semiconductor Index ETF (SOXX) fell 30% before rebounding with tech leaders like Nvidia. If you can handle the ups and downs, semiconductor exchange-traded funds (ETFs) may offer a way to invest in this important industry. Here’s a look at the best options to consider.
6 Best Semiconductor ETFs in 2025
Here are the top semiconductor ETFs to watch for 2025:
| ETF | Expense Ratio | YTD Return | 5-Year Return |
|---|---|---|---|
| Invesco PHLX Semiconductor ETF (SOXQ) | 0.19% | 22.2% | N/A |
| Invesco Semiconductors ETF (PSI) | 0.56% | 18.22% | 22.67% |
| iShares Semiconductor ETF (SOXX) | 0.34% | 20.64% | 22.08% |
| VanEck Semiconductor ETF (SMH) | 0.35% | 26.05% | 29.83% |
| SPDR S&P Semiconductor ETF (XSD) | 0.35% | 24.38% | 20.37% |
| ProShares Ultra Semiconductors (USD) | 0.95% | 34.47% | 58.88% |
What Is a Semiconductor ETF?
A semiconductor ETF is an exchange-traded fund that invests in stocks of companies in the semiconductor industry. Semiconductor ETFs typically track an index, such as the Dow Jones U.S. Semiconductor Index.
1. Invesco PHLX Semiconductor ETF (SOXQ)
- Index tracked: PHLX/Semiconductor
- Top holdings: Nvidia Corp., Broadcom Inc., Taiwan Semiconductor Manufacturing Co. Ltd., Micron Technology Inc., Lam Research Corp.
- Best for: Exposure to industry’s largest companies
| Pros | Cons |
|---|---|
| Low fees | ETF is market-cap weighted, meaning it can be top-heavy |
| Offers exposure to the names most well-known to investors |
2. Invesco Semiconductors ETF (PSI)
- Index tracked: Dynamic Semiconductor Intellidex Index
- Top holdings: Micron Technology Inc., Broadcom Inc., Lam Research Corp., KLA Corp., Qualcomm Inc.
- Best for: Investors who want an ETF that invests only in domestic stocks
| Pros | Cons |
|---|---|
| Balanced exposure to top names | Relatively high expense ratio |
| Strong historical performance during semiconductor upcycles |
3. iShares Semiconductor ETF (SOXX)
- Index tracked: ICE Semiconductor Sector Index
- Top holdings: Broadcom Inc., Advanced Microdevices Inc., Qualcomm Inc., Micron Technology Inc.
- Best for: Investing as a beginner, due to the fund’s balanced exposure to growth and income semiconductor stocks
| Pros | Cons |
|---|---|
| One of the most liquid and balanced ETFs | Morningstar ranks the risk of fund as “high” |
| 4-star rating from Morningstar |
4. VanEck Semiconductor ETF (SMH)
- Index tracked: MVIS U.S.-Listed Semiconductor 25
- Top holdings: Nvidia Corp., Taiwan Semiconductor Manufacturing Co. Ltd., Broadcom Inc., Advanced Micro Devices Inc., Micron Technology Inc.
- Best for: Investors comfortable with a fund heavily weighted toward a few semiconductor companies
| Pros | Cons |
|---|---|
| Offers a different stock balance than the NYSE semiconductor trackers | Very concentrated portfolio |
| Higher expense ratio compared to other funds |
5. SPDR S&P Semiconductor ETF (XSD)
- Index tracked: S&P Semiconductor Select Industry Index
- Top holdings: Astera Labs Inc., Credo Technology Group Holding Ltd., Iminj Inc., Rambus Inc., Rigetti Computing Inc.
- Best for: Diversifying portfolio with a small and medium-cap funds
| Pros | Cons |
|---|---|
| Exposure to a broader base of smaller semiconductor names | May come with more risk by owning less-proven names |
| Less exposure to top sector performers |
6. ProShares Ultra Semiconductors (USD)
- Index tracked: Dow Jones U.S. Semiconductors Index
- Top holdings: U.S. dollar, Nvidia Corp., Broadcom Inc., U.S. Treasuries, Advanced Micro Devices Inc.
- Best for: Experienced short-term investors with high risk tolerance
| Pros | Cons |
|---|---|
| Potentially high returns | Leveraged fund that risks high losses |
| Holdings not confided to those found in index | High expense ratio |
Semiconductor ETFs vs. Other Investment Options
Before you invest in semiconductor ETFs, you should compare their pros and cons with those of other investments. Here’s a look:
| Investment | Pros | Cons |
|---|---|---|
| Semiconductor ETFs | -High growth -Some level of diversification within the industry |
-Diversification is limited, as industry stocks tend to trade in tandem -ETFs have annual fees, although typically quite low |
| Individual semiconductor stocks | -Direct exposure to a specific company’s growth -No expense ratio |
-No fees or expenses, if traded through a zero-commission broker -Lack of diversification could lead to big losses |
| Tech ETFs | -High growth potential -Diversification across tech industries and sectors |
-Can include high-risk growth stocks |
| Broad index funds | -Can defend against falling prices in any one industry -Professional investment management |
-Typically have lower returns than individual stocks |
Key Factors To Consider Before Investing
Semiconductor stocks are booming as demand for their chips rises rapidly. These chips power everything from smartphones and gaming consoles to cryptocurrency and automobiles.
Investors can earn sizable returns, but individual semiconductor stocks are notoriously volatile.
If you want high growth in your portfolio, consider allocating at least some funds to the sector. Semiconductor ETFs offer a way to invest without relying on a single company’s performance.
Even so, semiconductor ETFs are not risk-free. The sector experiences high day-to-day volatility and is especially vulnerable to market cycles. Regulatory concerns also remain a constant risk for the industry.
Trends Shaping the Semiconductor Industry in 2025
Chip stocks boomed in 2023 and 2024 on the back of the AI revolution, but they fell sharply in early 2025. Tariffs from the Trump administration hit big tech hard — semiconductors in particular — since many components are made in China.
Recently, investor optimism has returned as AI growth continues and tariff concerns ease. Semiconductor ETFs have been climbing for months. Still, volatility remains high, so investors should proceed with caution.
Trend Recap
AI hype sent chip stocks soaring, tariffs dragged them down, and now a resilient market is fueling a comeback — but risk remains high.
Risks of Investing in Semiconductor ETFs
Semiconductor ETFs are generally less volatile than individual stocks. They hold many companies in the same industry, so their performance doesn’t always move in lockstep.
However, many funds have large positions in stocks like Nvidia. That means you can’t escape volatility entirely. And in any ETF, some companies may end up as long-term losers, dragging down overall returns.
In general, three main risk categories apply to semiconductor ETFs:
- Industry-specific risks: A drop in chip demand — such as during a recession — will hit the entire sector. The same is true if new regulations cut into profits.
- Market risks: Economic conditions, such as inflation and rising interest rates, that affect the overall stock market can also drag down semiconductors.
- Company-specific issues: Problems that affect individual companies can also hurt the value of a semiconductor ETF.
How To Buy Semiconductor ETFs
To purchase a semiconductor ETF, you’ll need an account at a brokerage firm. As ETFs trade on an exchange like a regular stock, they’re easy to buy and sell, and most firms these days won’t even charge you any commission to do so.
Here are the steps you’ll need to take in a nutshell:
- Choose a brokerage platform
- Search for the ETF name or ticker
- Research the ETF to ensure it is an appropriate investment
- Decide how much to invest
- Enter your order
The Bottom Line
The semiconductor sector is a volatile one, subject to several types of risk. Investing in a semiconductor ETF instead of individual stocks helps to mitigate some of that risk by providing exposure to many different companies.
Semiconductor ETF FAQ
Got questions about investing in semiconductor ETFs? Here are the quick, clear answers you need before adding them to your portfolio.- Can I hold semiconductor ETFs in a retirement account?
- Yes, if your plan or account offers them as an option. Chances are better with an IRA than a 401(k).
- What is the best performing semiconductor ETF?
- According to VettaFi, Defiance Daily Target 2X Long AVGO ETF, a leveraged fund, is the best performing YTD, with gains of 63.29%.
- Are semiconductor ETFs still a good investment?
- Yes. Demand should remain strong for the products that use semiconductors. But be prepared to hold your ETFs long-term to ride out volatility.
- How do I choose the right semiconductor ETF?
- Look for a solid performer that suits your budget, risk tolerance and investment goals.
John Csiszar contributed to the reporting for this article.
Information is accurate as of Sept. 18, 2025, and subject to change.
Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.
- Fidelity. 2025. "IRA vs. 401(k): What's the difference?"
- VettaFi. "Semiconductors ETF List."
