SMHETF

The First Trust NASDAQ Semiconductor ETF (FTXL) is a smart beta ETF with $1.35 billion in assets that tracks the Nasdaq US Smart Semiconductor Index. With a 0.60% expense ratio and strong year-to-date performance of 91.89%, it offers concentrated exposure to semiconductor companies but carries higher volatility (beta of 1.75) compared to alternatives like SOXX and SMH, which have lower expense ratios and significantly larger asset bases.

The VanEck Semiconductor ETF (SMH) returned approximately 69% in 2026, significantly outperforming its largest holding Nvidia, which gained only 23%. The outperformance was driven by smaller positions like Micron (up 276%), Intel (up 223%), and AMD (up 181%), which together accounted for about half the fund's gains despite representing only 14% of assets. The fund's 20% position cap on any single stock and exposure to the broader semiconductor industry, including cyclical memory chip makers, enabled it to beat Nvidia's returns.

The article recommends two ETFs for monthly investment of $500: the VanEck Semiconductor ETF (SMH), which has benefited from the AI boom with 89% returns over the past year and is expected to continue growing due to massive capex spending from hyperscalers; and the Avantis U.S. Small Cap Value ETF (AVUV), which trades at attractive valuations and is positioned to benefit from accelerating small-cap earnings growth expected around 20% in 2026.