ETFs
Like Nvidia? These 3 ETFs have what you want.
Find out which funds give you the most exposure to the king of AI chips.
Nvidia (NVDA 6.76%) has become one of the most popular stocks on the market, and for good reason. Its artificial intelligence semiconductor chips are flying off the shelves as companies around the world do whatever it takes to keep up in the rush to develop cutting-edge AI applications. Its sales and profits soared, and its stock price followed, making Nvidia one of only three stocks to ever have a market capitalization above the $3 trillion mark.
Many investors liked to use exchange traded funds in order to obtain some diversity in their portfolios. Yet what many ETF investors have discovered recently is that the more Nvidia stock their funds hold, the better their returns. If Nvidia is your favorite stock — or you just want to invest in a fund with an oversized amount of the tech giant’s stock — then these three ETFs might have just what you’re looking for in an investment.
1. VanEck Semiconductor ETF
Nvidia is the largest semiconductor stock in the market, making it the largest stock in the market. VanEck Semiconductor ETF (SMH 2.34%). The VanEck Fund follows a fairly standard methodology for choosing its holdings, selecting companies in the semiconductor space, and then weighting its positions in each company based on its market capitalization.
You’ll find more than two dozen semiconductor stocks among the VanEck ETF’s holdings. But Nvidia dominates the list, accounting for more than 20% of assets at the end of June. Semiconductor manufacturing in Taiwan (NYSE:TSM) and Broadcom (NASDAQ: AVGO) are also big holdings, and the fund’s top 10 stocks account for more than 70% of its total value. An expense ratio of 0.35% isn’t cheap, but it’s not an unreasonable amount to pay for a fund targeting a particular industry group, and a total return of 68% over the past year is not to be disdained.
2. Vanguard Information Technology ETF
By far the most important entry on this list is the Vanguard Information Technology ETF (VGT 1.43%). This fund has a broader scope than the VanEck Semiconductor ETF, including not only semiconductor stocks, but also a broader share of the technology sector. You’ll find companies specializing in software, hardware, and cloud on the list, alongside chipmakers.
The Vanguard ETF has more than 300 stocks in its portfolio, but Nvidia represents 14% of the fund’s $80 billion in assets. That doesn’t even make Nvidia the top holding in the fund, as both Apple (NASDAQ: AAPL) and Microsoft (NASDAQ:MSFT) weigh in with even higher allocations. These three stocks alone represent half of the ETF’s assets, making the highly concentrated fundYet, with a 29% return over the past year and an expense ratio of just 0.10%, Vanguard’s product has delivered impressive results for investors.
3. GraniteShares 2x Long NVDA Daily ETF
Nvidia’s strong performance has given rise to numerous leveraged ETFs seeking to profit from its success, and GraniteShares 2x Long NVDA Daily ETF (NVDL 13.75%) is the largest. With about $4 billion in assets, GraniteShares holds two assets: cash and swap contracts tied to Nvidia shares that give it outsized exposure to the chipmaker’s stock price movements.
If Nvidia’s stock rises 5% on a given day, GraniteShares ETF investments are designed to target a 10% gain for that day. However, the same is true on the downside: if Nvidia’s falls 5% in one day, investors can expect a 10% drop for the GraniteShares fund.
This exposure doesn’t come cheap, since the fund’s net operating expense ratio stands at 1.15% per year. However, with the stock price more than quadrupling over the past year, bold investors have defied odds by holding these short-term focused leveraged ETFs for the long term.
The best way to invest in Nvidia
If Nvidia exposure is what you want, the easiest way to get it is to simply buy the stock. The fact that even some of the largest exchange-traded funds on the market have this much exposure to Nvidia is a testament not to their expertise in selecting investments, but rather to the flaws in their respective methodologies. If you’re looking for an ETF that offers true diversification, you need to make sure you’re not actually getting concentrated exposure to high-flying chip stocks.
Dan Caplinger holds positions in Apple, Microsoft and Vanguard World Fund-Vanguard Information Technology ETF. The Motley Fool holds positions and recommends Apple, Microsoft, Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Mad Motley has a disclosure policy.