For ETF investors, the more interesting question is not whether semiconductors are a strong long-term theme, but how much of that theme is being delivered through one name, one factor, or one part of the supply chain. Intelโs presence across chip funds is a useful reminder that even โbroadโ sector ETFs can behave very differently once weighting rules take over. A modified-cap approach, a pure market-cap approach, and an equal-weight approach can each produce a different outcome when a large holding becomes volatile.
That matters because index design can quietly change the risk profile. In a concentrated industry, the top holdings often drive most of the return and most of the drawdown. Investors using semiconductor ETFs as a long-term allocation tool should look beyond the label and check whether the fund is tilted toward the biggest design leaders, the widest platform companies, or a more balanced basket that may dilute single-stock dependence.
There is also a valuation layer that index exposure does not remove. If one major constituent trades at a rich multiple relative to its history, the ETF may still carry that embedded sensitivity even when the fund itself looks diversified. Earnings season can therefore affect semiconductor ETFs in two ways: by changing the outlook for the company in focus and by resetting expectations for the broader group that shares the same narrative.
For portfolio construction, the key decision is role, not just return. Semiconductor ETFs can serve as a tactical growth sleeve, but they also need monitoring for concentration, rebalancing drift and how closely they track the industryโs most crowded trade. For long-term investors, that makes methodology and holding weights just as important as the sector call itself.
Key Takeaways:
- Semiconductor ETFs have surged this year ahead of Intelโs earnings report today.
- Intelโs stock has soared but slid about 28% this month on valuation worries.
- Fund exposure to Intel ranges from about 4% to 6% across the four ETFs.
Semiconductor ETF Performance Diverges by Strategy
Four semiconductor ETFs carry exposure to Intel alongside other chipmakers riding the same AI-driven demand. Each fund has climbed this year, though by different margins. The iShares Semiconductor ETF (SOXX) leads with a year-to-date gain of 84.7% through July 22, according to VettaFi. The VanEck Semiconductor ETF (SMH) follows at 63%, trailed by the Invesco AI and Next Gen Software ETF (IGPT) at 56.7% and the State Street SPDR NYSE Technology ETF (XNTK) at 26.5%. All four funds have also fallen over the past month, according to VettaFi. SOXX dropped 15.2%, SMH shed 12.2%, IGPT lost 13% and XNTK fell 9.8% through July 22. SOXX invests in a modified-cap-weighted basket of 30 U.S.-listed semiconductor companies, according to VettaFi. The fund holds $45.8 billion in assets with a 0.34% expense ratio. SMH instead weights its portfolio by market capitalization across 25 of the largest U.S.-listed semiconductor companies, according to VettaFi. The fund carries $70.4 billion in assets and a 0.35% expense ratio. XNTK spreads exposure evenly across 35 U.S.-listed technology-related stocks, according to VettaFi. The fund holds $2.2 billion in assets at a 0.35% expense ratio. IGPT holds global companies deriving most revenue from software and next-generation technology, according to VettaFi. The fund is the smallest of the group at $1.2 billion in assets, charging 0.56%. Intel carries different weightings across the four funds. XNTK holds Intel at 6.14%, its largest weighting in the group, according to VettaFi. SOXX holds Intel at 5.37% and IGPT at 4.06%. SMH does not count Intel among its top 10 holdings. That dilutes the chipmakerโs influence within a portfolio led by Nvidia at 20.78%, according to VettaFi.Enjoyed this article? Sign up for our newsletter to receive regular insights and stay connected.