The VanEck Semiconductor ETF has delivered average annual returns of nearly 31% over the past decade, outperforming the Nasdaq-100’s average of just over 19% in the same period. Investors benefit from a 31.0% yield based on the most recent annual dividend of $1.1047 per share. While the fund experienced a 34% drawdown in 2022, it has had more winning years than losing ones, including a 49% gain in 2025, underscoring the potential for market-beating returns over a multi-year holding period.

Since its 2011 inception, the ETF has invested nearly all of its capital in 26 semiconductor companies, with top weightings of approximately 20% in Nvidia and just under 11% in Taiwan Semiconductor Manufacturing. Other leading holdings include Broadcom, ASML, Micron and AMD, each representing under 10% of assets. The fund’s expense ratio of 0.35% stands below the industry average of 0.44% for actively managed peers, translating into $35 of annual fees per $10,000 invested.

In the third quarter, Geneos Wealth Management reduced its position by 55.4%, selling 3,460 shares and retaining 2,786 shares valued at $909,000. Allspring Global Investments increased its stake by 13.0% to 3,469 shares worth $967,000, while Farther Finance Advisors boosted holdings by 136.2% to 10,450 shares valued at $3.407 million. AE Wealth Management expanded its position by 168.8% to 49,509 shares ($13.807 million), and both Advyzon Investment Management and Carter Financial Group established new stakes of $2.745 million and $1.072 million, respectively.

Although the ETF offers higher return potential than broad market funds, it carries increased volatility due to its sector concentration. Investors should be prepared for significant short-term fluctuations and maintain a long-term perspective to smooth out periods of negative performance. Historical data suggest that multi-year commitment increases the likelihood of outperforming broader benchmarks despite occasional down cycles.