SMH Notches a Fresh 52-Week High Amid AI-Driven Demand and Supply Chain Reshuffling

ETF Overview and Capital Flows

The VanEck Semiconductor ETF (SMH.O) tracks a market-cap-weighted index of 25 of the largest U.S.-listed semiconductor companies. It offers direct exposure to the tech-heavy sector, which has seen renewed interest amid AI-driven demand and supply chain reshuffling. Recent fund flows show a mixed picture: a $7.1 million inflow from extra-large orders contrasted with a $1.9 million outflow in regular trading sessions on December 31, 2025. The fund’s 0.35% expense ratio positions it as a mid-tier option in leveraged semiconductor ETFs.

Peer ETF Snapshot

• BNDP.O charges 0.05% with $101M assets under management (AUM) and 1.0x leverage.
• AGGH.P has 0.3% expenses, $303M AUM, and 1.0x leverage.
• ACVT.P carries higher costs at 0.65% but manages just $27M.
• AGGS.P matches SMH.O’s 0.35% expense ratio but with smaller $37M AUM.
• AGG.P, the cheapest at 0.03%, dominates with $136 billion AUM but focuses on broader fixed income.

Opportunities and Structural Constraints

SMH.O’s 52-week high reflects its concentrated bet on semiconductors, a sector benefiting from AI infrastructure spending and geopolitical tailwinds. Its 1.0x leverage ratio amplifies both gains and losses relative to the underlying index. While the fund’s 0.35% expense ratio is competitive among sector-specific leveraged ETFs, larger peers like AGG.P offer lower costs at the expense of thematic focus. In practice, SMH.O suits investors seeking targeted exposure but demands close monitoring given its leverage and sector concentration. At the end of the day, its performance hinges on semiconductor cyclicality and macroeconomic risks like interest rate shifts.