VanEck Semiconductor UCITS ETF (SMH) Holdings and Performance Recap
19 September 2023
Read Time 4 MIN
Review the top contributors and detractors that lead to the SMH ETF’s strong performance in Q2 2023.
SMH Performance overview for Q2 2023
VanEck Semiconductor UCITS ETF has had strong performance in Q2 of 2023, up 14.87% over that time period. Performance was largely due to exposure to NVIDIA Corp. ($NVDA) and their exposure to the growing GPU demand for Artificial Intelligence models. Semiconductors continue to be a primary driver of technological innovation globally, whether its complex systems on a chip or basic memory and components, we believe the sector is a long term trend that investors should consider.
SMH Top Holdings as of 30 June 2023
| Ticker | Holding Name | % of Net Assets |
| NVDA US | Nvidia Corp | 10.8 |
| AVGO US | Broadcom Inc | 10.4 |
| ASML US | Asml Holding Nv | 9.7 |
| TSM US | TAIWAN SEMICONDUCTOR MANUFACTURING CO L | 9.6 |
| AMD US | Advanced Micro Devices Inc | 7.7 |
| TXN US | Texas Instruments Inc | 6.7 |
| INTC US | Intel Corp | 5.8 |
| QCOM US | Qualcomm Inc | 5.5 |
| AMAT US | Applied Materials Inc | 4.6 |
| ADI US | Analog Devices Inc | 4.0 |
These are not recommendations to buy or to sell any security. Securities and holdings may vary.
Top two contributors for SMH in Q2 2023
NVIDIA Corp. (NVDA) – 11.9% Average Weight | 5.81% Contribution to return
In the second quarter, Nvidia exceeded expectations, achieving an EPS of $2.70 (surpassing predictions by 62 cents) and recording total sales of $13.51 billion, significantly surpassing anticipated figures. This notable success was driven by robust sales in data centers, which outperformed expert estimates by almost 30%, alongside elevated sales in the Gaming and ProViz sectors.
Their forthcoming quarter forecasts appear promising, with anticipated sales reflecting a 27% increase, augmented profitability per sale, and prudent operational spending. Market analysts responded favorably to these outcomes, revising their forward expectations for Nvidia upwards. Acknowledging Nvidia's adept performance in data centers and enhancing the gaming domain, they highlighted the company's strategic efforts to meet escalating demand by diversifying its product portfolio. However, a degree of caution was expressed due to potential challenges related to chip sales in China and subdued performance in the automotive sector.
Broadcom Inc. (AVGO) – 10.01% Weight | 3.37% Contribution to return
In Q2, Broadcom exceeded expectations with revenue up 3.5% and earnings per share (EPS) beating forecasts by 2.0% or $0.30. Analysts were upbeat about strong Networking growth driven by AI demand, boosting the Semi business before the iPhone refresh. Positive factors include an Apple deal, projected AI revenue increase, and optimism about deal closures. This led to raised estimates and a higher average price target of $847.31.
Top two detractors for SMH in Q2
QUALCOMM Inc. (QCOM) – 5.75% Average Weight | -0.56% Contribution to return
Following Qualcomm's Q3 report, shares fell broadly. The company's revenue of $8.44 billion was 0.8% below expectations, while EPS of $1.87 exceeded predictions by $0.06. Across its segments, QCT's (technology business) revenue was below target but EBT (earnings before taxes) was in line, while QTL (licensing business) missed on both revenue and EBT. The management's Q4 guidance indicates that the midpoint of their revenue and EPS goals is below the previous consensus. Analysts have generally labeled the Q3 results and outlook as disappointing, citing challenges from China, Huawei, and inventory adjustments that had a greater impact than anticipated. Despite this, some analysts find the valuation favorable and remain optimistic about the company's longer-term prospects.
Texas Instruments (TXN) – 6.92% Average Weight | -0.3% Contribution to return
Texas Instruments suffered a relatively bad quarter at -2.5% after a weak earnings forecast. The company communicated that they expect EPS in the range between $1.68 to $1.92 per share in Q3, compared to an analyst prediction of $1.90. The analog chip company faced less orders across all of its business lines, except the automotive industry, with the customers turning to existing stockpiles. The company’s inventory is meanwhile on the rise and the trend is predicted to continue into Q3 and Q4 2023. Revenue in Q2 amounted $4.53 billion, 13% lower than the Q1, but outperformed the average analyst estimate of $4.35 billion. The company posted a $1.87 EPS, down 23.7% YoY.
Standardized Performance
| Performance in % (30 June 2023) | YTD | 1 Year | 3 Years* | 5 Years* | Since Inception* | Expense Ratio |
| VanEck Semiconductor UCITS ETF (NAV) | 49 | 48.47 | -- | -- | 15.29 | 0.35% |
| MVSMCTR (Index) | 49.17 | 48.75 | 25.63 | 27.43 | 15.51 |
Past performance does not predict future returns.
*Periods greater than one year are annualised.
Investing is subject to risk, including the possible loss of principal. You must read the Prospectus and KID before investing, which are available at the Document section of the fund on www.vaneck.com.
ETF performance: Current performance may be lower or higher than average annual returns shown. Discrete performance shows 12-month performance for each of the last 10 years where available. E.g. '1st year' shows the most recent of these 12-month periods and '2nd year' shows the previous 12 month period and so on.
Performance data for the Irish domiciled ETFs is displayed on a Net Asset Value basis, in Base Currency terms, with net income reinvested, net of fees. Brokerage or transaction fees will apply.
Returns may increase or decrease as a result of currency fluctuations.
Index performance: Performance quoted represents past performance of the underlying Index. An index performance is not illustrative of the Product's performance. It is not possible to invest directly in an index: indices are not securities in which investments can be made.
For more information on the Index performance, please consult the Index Provider´s website.
MVIS® US Listed Semiconductor 10% Capped ESG Index is the exclusive property of MarketVector Indexes GmbH (a wholly owned subsidiary of Van Eck Associates Corporation), which has contracted with Solactive AG to maintain and calculate the Index. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards MarketVector Indexes GmbH (“MarketVector”), Solactive AG has no obligation to point out errors in the Index to third parties. The VanEck Semiconductor UCITS ETF is not sponsored, endorsed, sold or promoted by MarketVector and MarketVector makes no representation regarding the advisability of investing in the Fund.
Important Disclosure
This is a marketing communication. Please refer to the prospectus of the UCITS and to the KID before making any final investment decisions.
This information originates from VanEck Switzerland AG which has been appointed as distributor of VanEck products in Switzerland by the Management Company VanEck Asset Management B.V., incorporated under Dutch law and registered with the Dutch Authority for the Financial Markets (AFM). VanEck Switzerland AG’s registered address is at Genferstrasse 21, 8002 Zürich, Switzerland.
The information is intended only to provide general and preliminary information to investors and shall not be construed as investment, legal or tax advice. VanEck Switzerland AG and its associated and affiliated companies (together “VanEck”) assume no liability with regards to any investment, divestment or retention decision taken by the investor on the basis of this information. The views and opinions expressed are those of the author(s) but not necessarily those of VanEck. Opinions are current as of the publication date and are subject to change with market conditions. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results. Information provided by third party sources is believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. Brokerage or transaction fees may apply. A copy of the latest prospectus, the Articles, the Key Information Document, the annual report and semi-annual report can be found on our website www.vaneck.com or can be obtained free of charge from the representative in Switzerland: First Independent Fund Services Ltd, Feldeggstrasse 12, 8008 Zurich, Switzerland. Swiss paying agent: Helvetische Bank AG, Seefeldstrasse 215, CH-8008 Zürich.
All performance information is based on historical data and does not predict future returns. Investing is subject to risk, including the possible loss of principal.
No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck.
© VanEck Switzerland AG
