Not Much Nvidia? It's No Problem for This Semiconductor ETF

How blistery are semiconductor stocks this year? In a word, scorching. Exchange-traded funds (ETFs) marque it casual to quantify the sizzling temperatures associated with spot stocks successful 2026.

There are much than 5,200 exchange-traded products (ETPs), including ETFs, trading successful the U.S., but conscionable 120 are trading up astatine slightest 50% twelvemonth to date. Of that group, 10 are "plain vanilla" semiconductor ETFs, meaning they're not leveraged funds. Ten doesn't dependable similar a lot, but it is erstwhile noting that the beingness of mean spot ETFs isn't densely populated.

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One of the 2026 leaders successful the spot ETF clubhouse is the State Street SPDR S&P Semiconductor ETF (NYSEMKT: XSD), though that presumption is arguably overlooked. That's surprising, due to the fact that this is simply a $3 cardinal tech ETF that turned 20 successful January, meaning it's neither tiny nor young. Those are superficial statistics, truthful it's worthy examining its different metrics to spot whether this ETF has existent nutrient connected the bone.

The accustomed fishy isn't important successful this ETF

To small fanfare, this SPDR ETF is outperforming the biggest funds successful the class twelvemonth to date. Alone, that's impressive, but hold until you perceive the following.

This semiconductor ETF is topping its larger rivals, with a alternatively diminutive 2% value to Nvidia (NASDAQ: NVDA). That's saying something, due to the fact that of the 25 ETFs with the largest weights to that stock, 3 are dedicated spot funds. In fact, the largest semiconductor ETF allocates 17.6% of its portfolio to Nvidia.

In the lawsuit of the SPDR S&P Semiconductor ETF, 27 of its 44 holdings bid larger weights than Nvidia. That whitethorn dependable similar a usurpation of the semiconductor ETF "code," but it's easy explainable. Most run-of-the-mill ETFs focused connected spot stocks value holdings by marketplace capitalization, truthful it stands to crushed that Nvidia volition beryllium the largest holding successful those funds. But this SPDR ETF tracks the S&P Semiconductor Select Industry Index, which is arsenic weighted.

One of the purported advantages (and critiques) of equally weighting stocks is that the methodology leans into the size factor, placing much accent connected smaller stocks. To beryllium sure, the SPDR S&P Semiconductor ETF is not littered with small-cap stocks. The weighted mean marketplace worth of its holdings is $270.7 billion. That's mega-cap territory, but it's besides good beneath the weighted-average marketplace headdress of $1.4 trillion for the holdings successful the largest spot ETF.