Investing in S&P 500 ETFs like Vanguard or SPDR can bring long-term gains, historically averaging 9% annually and outperforming many hedge funds. However, in 2025, the VanEck Semiconductor ETF (SMH) has surged 39.5%, doubling the S&P 500’s gains. Top holdings include Nvidia, TSM, and Broadcom, driving strong growth.

The VanEck Semiconductor ETF tracks the MVIS U.S. Listed Semiconductor 25 Index, with top holdings seeing rapid revenue growth. With the AI boom continuing, semiconductor stocks like Nvidia are thriving, leading to the SMH outperforming the S&P 500. Despite trading at a premium, the ETF presents an attractive risk/reward opportunity.

VanEck Semiconductor ETF’s success hinges on the AI boom and demand for semiconductors. The buildout of AI data centers and increasing semiconductor use across industries suggest continued growth. While vulnerable to a bubble, current trends indicate potential outperformance against the S&P 500 in the future. Consider other top stock picks for significant returns.

Read more at Nasdaq: This ETF Trounced the S&P 500 in 2025. Here’s Why It Could Do It Again Next Year