Broadcom Blow Shakes VanEck Chip ETF as Fund Manager Draws Clearer Line Between Chips and Infrastructure

Broadcom's disappointing quarterly report triggered a 5.4% drop in the VanEck Semiconductor UCITS ETF, exposing its concentration risk as top ten holdings account for 79.8% of net asset value.

The VanEck Semiconductor UCITS ETF had barely finished touching a fresh 52-week high when the roof caved in. A disappointing quarterly report from Broadcom sent the fund tumbling 5.4% on Thursday to €97.02, wiping out weeks of gains in a single session and exposing how tightly the portfolio is tied to a handful of bellwethers.

Broadcom’s second-quarter revenue fell short of analyst estimates, triggering an after-hours plunge of nearly 14% in the stock. The company projected current-quarter sales of $29.4 billion and an adjusted EBITDA margin of 68%, while flagging that its AI semiconductor revenue would surge 200% to $16 billion. But the forward-looking optimism failed to mask the immediate disappointment, and the selloff quickly infected the wider chip complex. Arm Holdings, Micron Technology and Marvell Technology each lost about 6%, while AMD gave up nearly 3%, with Qualcomm and Intel following in lockstep.

The concentrated portfolio structure magnified the impact. Micron Technology is the ETF’s largest holding at 14.33% of assets, followed by Advanced Micro Devices at 12.22%. Broadcom itself accounts for 8.33%, Intel for 8.02%, and Taiwan Semiconductor Manufacturing for 7.51%. When a double-digit haircut hits the fifth-largest position, the fund takes the full force. The top ten names together represent 79.80% of the fund’s net asset value, leaving little room for diversification to cushion a sector-wide rout.

The episode comes just days after VanEck launched a new US-listed ETF focused on the data center supply chain, widening its product suite in a way that sharpens the semiconductor fund’s identity. The new vehicle tracks the MarketVector Data Center Supply Chain Index, which requires companies to generate at least half their revenue from AI infrastructure or data centers — spanning chip design, cooling technology, nuclear power and electrical equipment. The European UCITS ETF, by contrast, sticks to the MarketVector US Listed Semiconductor 10% Capped Screened Index, a pure play on chipmakers and their suppliers. “The new US fund doesn’t shift the narrative against the semiconductor ETF,” VanEck said. “It separates them more cleanly — chips and equipment on one side, power, cooling and networks on the other.”

That distinction matters because the chip ETF’s portfolio remains overwhelmingly dependent on the classic semiconductor cycle. Beyond Micron and AMD, ASML accounts for 7.40% and Nvidia for 7.23%. The country breakdown underlines the US tilt: the United States represents 81.18% of assets, the Netherlands 8.31%, the Taiwan region 7.51%, Bermuda 2.18%, and Switzerland 0.81%. The fund holds 25 positions with cash virtually at zero, fully replicating its benchmark.

The rally that preceded Thursday’s selloff had been extraordinary. On a net asset value basis, the ETF gained 23.05% in the past month, 54.69% over three months, and 79.67% year-to-date. The underlying index tracked almost in lockstep, rising 22.82%, 54.48% and 79.52% respectively. The fund’s net assets swelled to $8.322 billion by the end of May, according to VanEck, up sharply from earlier levels. The total expense ratio stands at 0.35%, and the fund is accumulating, reinvesting all income.

The retreat is playing out against a backdrop that extends well beyond Broadcom. Rising tensions in the Middle East — including cross-strikes between the US and Iran, and targeted attacks on Gulf states — have pushed oil prices and bond yields higher. A strong ADP employment report and an ISM services index showing the highest price barometer in nearly four years have reinforced expectations that the Federal Reserve will keep monetary policy tight. For a sector that had rallied 160% over the past twelve months and more than 20% in the last month alone, the combination of geopolitical and macro pressure provided a ready excuse for profit-taking.

The 52-week low of €37.21, set exactly one year ago, underscores just how far the fund has come. Whether this setback turns into a deeper correction or remains a consolidation depends heavily on the next wave of chip earnings, particularly Nvidia, whose results traditionally serve as the sentiment barometer for the entire AI semiconductor market.