The Best Semiconductor ETFs in Canada for February 2025
Key takeaways
Semiconductors Drive Innovation – These ETFs offer exposure to the backbone of modern technology, from AI to 5G and cloud computing.
Different Investment Approaches – While CHPS provides global semiconductor exposure, SOXX and XSD focus on the U.S. market with different weighting strategies.
Volatility and Growth Potential – The semiconductor sector is cyclical, with high volatility but strong long-term growth prospects.
One ETF I like way better than the ones on this list.Semiconductor stocks and Canadian ETFs with semiconductor companies have skyrocketed in demand, particularly post-pandemic.
In this article, I’m going to dive into one of the best ETFs in Canada when it comes to semiconductors. However, there is a key issue here in Canada when it comes to semiconductor funds, and I’m going to address that first.
If you want exposure to semiconductors, there are limited ETF options in Canada
On the Toronto Stock Exchange, we only have a single ETF from Horizons ETF Management that tracks the semiconductor industry. For that reason, you’ll need to head south of the border and buy US-based ETFs if you want to explore other options outside of the single Canadian one.
I will mention the Canadian semiconductor ETF, but will then explore some US options for those willing to exchange their Canadian dollars and invest in US ETFs, because ultimately they have a much broader selection.
Lets get started.
What are the top semiconductor ETFs in Canada?
Global exposure to semiconductor leaders
Horizons Global Semiconductor Index ETF (TSE:CHPS)
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CHPS tracks the Solactive Capped Global Semiconductor Index, offering exposure to a diversified mix of top semiconductor companies worldwide. It includes major players from the U.S., Taiwan, and other key semiconductor markets.
Heavyweight U.S. semiconductor index ETF
iShares Semiconductor ETF (SOXX)
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SOXX tracks the ICE Semiconductor Index, providing exposure to the largest U.S. semiconductor firms. It is market-cap weighted, meaning larger companies like NVIDIA and Broadcom dominate the fund.
Equal-weighted semiconductor ETF
SPDR S&P Semiconductor ETF (XSD)
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XSD follows the S&P Semiconductor Select Industry Index and uses an equal-weight strategy, giving smaller semiconductor companies as much influence as giants like NVIDIA and AMD.
Overall, the market for semiconductor ETFs is limited, but there are some robust options
Because this is such a niche industry, there isn’t a need for many ETFs. These three options listed above will give you more than enough exposure to the industry.
If you’re a stickler for keeping your investments in CAD, Horizon’s CHPS is worth a look. You just need to keep in mind that the smaller ETF does come with higher fees, about $2 extra per year for every $1000 you invest relative to the other funds.
If you’re willing to convert your capital to USD, it opens up a few more doors for you as you could look to the iShares fund or SPDR fund. They have lower fees, lower concentration when it comes to their top holdings, and overall larger AUM.
Keep in mind, however, that when you convert to USD, you are not only exposing yourself to these companies, but also the fluctuations in currency.
Investing in the development of semiconductors, semiconductor equipment, the supply of semiconductors, or other various technology ETFs is a bet that technological advancements will continue to be made in the future and at a rapid pace. In my opinion, that is a bet that will likely pay off.
What are the best-performing semiconductor stocks?
When we think of the best-performing semiconductor stocks over the last few years, we think of companies like Nvidia (NVDA), Taiwan Semiconductor Manufacturing Co (TSM), Advanced Micro Devices (AMD), and Qualcomm (QCOM).
Of these companies, the lowest return over the last half decade has been Qualcomm, with a 16% annualized return. This outperforms any major North American stock market index over that same timeframe. The largest returns? NVIDIA, by a large marin.
$10,000 invested in NVIDIA just 5 years ago would now be worth over $170,000 today!
Remember, past performance is not a guarantee of future results. However, there is no doubt there is still potential here.
Are semiconductor ETFs a good investment for my portfolio?
There is no doubt that the semiconductor industry will continue to grow as technological advancements are made at a rapid pace. Generally, semiconductor ETFs are thought of as solid investments.
Picking individual stocks is complex, and many investors fear they may pick the wrong “horse in the race.” A prime example would be the explanation above. Although Qualcomm would have gotten you 16% annualized returns, you would have missed out on some life-changing returns from NVIDIA.
Therefore, semiconductor ETFs may be wise investments for those who want exposure to the sector but don’t want to pick individual holdings.