What is the primary difference in investment focus between FTEC and SMH?

FTEC (Fidelity MSCI Information Tech ETF) provides broad exposure to the information technology sector, including software, consumer electronics, and hardware. In contrast, SMH (VanEck Semiconductor ETF) focuses specifically on the semiconductor industry, targeting companies involved in chip design, manufacturing, and equipment. This means FTEC covers a wider array of technology sub-sectors, while SMH concentrates heavily on the supply chain and technology behind digital processing.

How do the inception dates of these funds compare?

SMH was established earlier, with an inception date of December 20, 2011, offering a longer historical track record for investors to analyse. FTEC is a more recent addition, launched on October 21, 2013. When evaluating these ETFs, the additional two years of history for SMH might provide more data points regarding performance through different market cycles, although both funds have been active for over a decade.

Which fund offers greater scale and liquidity?

SMH manages significantly more assets, with net assets of $74.1 billion, compared to FTEC's $21.3 billion. Larger asset bases often correlate with higher liquidity, meaning it may be easier to buy or sell shares without impacting the price substantially. However, FTEC’s $21.3 billion is still a substantial amount, ensuring it remains a viable option for most retail investors who need reliable execution in the technology sector.

What are the key differences in the top holdings?

FTEC's largest holdings include Apple (16.69%) and Microsoft (11.22%), reflecting its broad tech focus. SMH lacks these consumer electronics giants but holds substantial positions in Taiwan Semiconductor Manufacturing Co. (9.82%) and ASML (4.83%), which are critical semiconductor manufacturers and equipment makers. Both funds share Nvidia (NVDA) as a major holding, but the exposure differs significantly in SMH, where Nvidia comprises 22.52% of the portfolio, creating a more concentrated position.

How much do the expense ratios differ and why does it matter?

FTEC has a low expense ratio of 0.08%, whereas SMH charges 0.35%. This represents a difference of 0.27 percentage points annually. Over time, lower fees can enhance net returns, assuming all other factors remain equal. For example, on a $10,000 investment, the annual fee difference is $27. Investors should weigh these costs against the specific exposure each fund offers, as higher fees are often justified if the fund provides unique access to a targeted sector like semiconductors.

Which ETF provides higher dividend income?

FTEC offers a dividend yield of 0.37%, which is more than double the 0.18% yield of SMH. While both yields are relatively low compared to other sectors like utilities or real estate, FTEC generates slightly more income for investors holding the shares. Dividend yields can fluctuate based on market prices and corporate payouts, so it is important to view these figures as indicative of current conditions rather than guaranteed future income streams.

What concentration risks exist in these funds?

Both funds exhibit concentration risk, but in different ways. SMH is highly concentrated in semiconductors, with Nvidia accounting for 22.52% of the portfolio, making performance heavily dependent on this single stock. FTEC, while broader, still has significant top-heavy exposure with Nvidia at 17.49% and Apple at 16.69%. This means the top five positions in each fund drive a large portion of the overall return, exposing investors to the specific risks of those individual companies.

Which sectors are represented in each ETF?

FTEC covers the entire information technology sector, including software, hardware, communications equipment, and consumer electronics. SMH is strictly limited to the semiconductor industry, which acts as the foundational infrastructure for modern computing. By investing in SMH, you gain direct exposure to chip designers and manufacturers. FTEC, however, provides a more diversified basket across various sub-industries within the broader tech landscape, potentially balancing the volatility inherent in pure-play semiconductor stocks.

How does the transparency of index tracking compare?

According to the provided data, the specific indexes tracked by both FTEC and SMH are listed as 'not available'. This means investors cannot directly review the exact methodology or constituent selection criteria from the summary provided. Without this information, it is challenging to know precisely how rebalancing occurs or which specific criteria define inclusion in these funds. Investors relying on these ETFs should assume standard index-tracking behaviours but be aware that precise rule-based details are not disclosed here.

How should a beginner interpret the fee difference?

The fee difference is 0.27%. This means if you invested $10,000, SMH would cost $35 a year to manage, while FTEC costs only $8. Over ten years, assuming no growth, that is a $270 difference in costs. While not huge, fees reduce compounding potential. Beginners must consider if the unique semiconductor exposure of SMH justifies the higher cost compared to the broad, lower-cost tech exposure of FTEC. Fees are a certainty; returns are not.

What is the educational disclaimer for this comparison?

This content is for educational purposes only and does not constitute financial advice. All figures are based on data fetched on September 22, 2026, and are subject to change. Investors should conduct their own due diligence, consider their personal financial situation, risk tolerance, and investment goals, and consult a qualified financial advisor before making any investment decisions. Past performance of FTEC or SMH is not indicative of future results.

FTEC vs SMH

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

Compare Fidelity MSCI Information Tech ETF (FTEC) and VanEck Semiconductor ETF (SMH). Review their expense ratios of 0.08% and 0.35%, dividend yields, top holdings and how each tracks its respective market. Understand the differences in fees, holdings and performance factors. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

FTEC

Metric

SMH

0.08%

Expense Ratio

0.35%

0.37%

Dividend Yield

0.18%

$21.25B

Net Assets

$74.06B

298

Holdings

Oct 21, 2013

Inception Date

Dec 20, 2011

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Index Tracked

–

Technology

Fund Category

Technology

FTEC costs about $27.00 less per year for every $10,000 invested.

Shared Top Holdings

Holding	FTEC	SMH
NVDANVIDIA Corporation	17.49%	22.52%
MUMicron Technology, Inc.	4.25%	5.64%
AVGOBroadcom Inc.	4.21%	5.68%
AMDAdvanced Micro Devices, Inc.	3.41%	6.20%
INTCIntel Corporation	1.87%	4.71%

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Investment Analysis

FTEC

Pros

FTEC offers a low 0.08% expense ratio, making it a cost-efficient option for broad technology exposure.
The fund manages $21.3 billion in net assets, indicating substantial scale and likely high liquidity for traders.
With a 0.37% dividend yield, FTEC provides slightly higher income potential compared to the semiconductor-specific fund.

Considerations

Holding 17.49% in NVDA and 16.69% in AAPL introduces significant concentration risk within the top positions.
The specific index tracked is not available, limiting transparency regarding the exact methodology used for selection.
Top holdings include consumer electronics and software, potentially diluting pure semiconductor exposure for focused investors.

SMH

Pros

SMH provides targeted exposure to the semiconductor sector with a substantial $74.1 billion in net assets.
The fund is older, established in 2011, offering a longer historical track record than the Fidelity IT fund.
Major holdings like TSM and ASML offer distinct exposure to chip manufacturing and equipment unavailable in FTEC.

Considerations

The 0.35% expense ratio is significantly higher than the 0.08% cost of the broader technology ETF.
Extremely high concentration in NVDA at 22.52% increases sensitivity to the performance of this single company.
A low 0.18% dividend yield offers minimal income generation compared to other technology-focused investment options.

About FTEC and SMH

FTEC (FTEC)

The Fidelity MSCI Information Tech ETF offers investors a cost-effective way to gain exposure to the U.S. technology sector. With an expense ratio of just 0.08%, this fund tracks a broad index of American companies involved in software, hardware, and services. Holding 298 different stocks, it provides diversified access to the sector's largest players as well as smaller emerging firms. Since its inception in October 2013, the fund has amassed substantial assets, currently exceeding USD 21 billion. Investors should note that while the fund offers low fees and wide coverage, its performance is directly tied to the technology sector's cyclical nature and growth prospects. Like all investments, values can rise and fall.

SMH (SMH)

The VanEck Semiconductor ETF (SMH) offers investors a way to access the technology sector, specifically focusing on semiconductor companies. Launched in December 2011, this fund has grown significantly, managing over USD 74 billion in net assets as of its most recent report. It holds a concentrated portfolio of 26 companies, providing targeted exposure to key players in the chip manufacturing industry. With an expense ratio of 0.35%, it is positioned as a cost-effective option for those seeking sector-specific diversification. While the dividend yield is modest at 0.18%, the primary appeal of SMH lies in its potential to capitalise on technological advancements and digital demand. However, it is essential for investors to recognise that technology sector performance can fluctuate, and values may rise and fall. This ETF serves as an educational tool for understanding semiconductor market dynamics rather than a guaranteed return vehicle.

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FTEC vs SMH

Fund Snapshot