VanEck has launched a new exchange-traded fund focused exclusively on China's semiconductor industry, which is now trading on the SIX Swiss Exchange. According to the asset manager, it is the first UCITS ETF in Europe to concentrate solely on the Chinese semiconductor sector.
Announced on Wednesday, the fund includes 25 positions and physically replicates the MarketVector China Semiconductor 10 Percent Capped Screened Index. The fund includes only companies that generate at least 50 percent of their revenue from semiconductors or semiconductor equipment. The total expense ratio is 0.65 percent annually. The ETF trades under the ticker symbol SMHC, is denominated in US dollars, and reinvests its earnings.
The launch comes against the backdrop of China's efforts to build an independent semiconductor industry. While the country is one of the world's largest buyers of chips, it remains heavily dependent on foreign sources for the production of technologically advanced semiconductors. Stricter US export restrictions have increased pressure on China to develop domestic alternatives. According to VanEck, companies such as chip manufacturer Cambricon and equipment maker NAURA are benefiting from this environment by partially replacing foreign suppliers on the Chinese market.
At the same time, investments in Chinese semiconductor companies carry substantial political and regulatory risks. Trade restrictions, state intervention, and concentration on a single industry sector can lead to high price volatility.
Globally, VanEck manages approximately $244 billion. The firm's existing product lineup includes an internationally focused semiconductor ETF that has reached a volume of more than $8 billion, according to the company.
