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Introduction
The VanEck Semiconductor ETF (NASDAQ:SMH) is a concentrated ETF tracking 26 of the largest semiconductor firms in the world. The ETF is essentially a bet on the secular growth of the chip industry, a
VanEck Semiconductor ETF: In A Holding Pattern
Summary
- I rate the VanEck Semiconductor ETF (SMH) as a Hold due to concentration risk, high valuation, and technical analysis suggesting near-term downside momentum.
- SMH has a high P/E ratio of 60x, indicating stretched valuations, making it a poor capital allocation choice at this time.
- Geopolitical risks, including potential tariffs and tighter controls on semiconductor exports, could negatively impact SMH's holdings and profitability.
Professional equity portfolio manager for a boutique buy-side asset manager.My focus is on finding high-quality companies, applying a disciplined approach to valuation and identifying underappreciated opportunities. My goal is to identify opportunities in cash-rich companies with strong balance sheets and shareholder friendly policies. I endeavour to incorporate a mix of quantitative and qualitative measures to identify opportunities in stocks. Long-only approach with a long-term investment focus.
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