Amplifying SMH Exposure: REX Shares Debuts SMHU & SMHD

On August 4, REX Shares launched the Microsectors 3X Long Semiconductor ETN (SMHU) and the Microsectors -3X Short Semiconductor ETN (SMHD) on the Cboe BZX exchange. These ETNs provide leveraged exposure to the popular and strong performing VanEck Semiconductor ETF (SMH B) by tracking the daily performance of the VettaFi Semiconductor Fund-Tracking Index (SEMIS). These ETNs are issued as a result of business partnership with Rex Shares and BMO.Key Takeaways REX Shares has launched the Microsectors 3X Long Semiconductor ETN (SMHU) and the Microsectors -3X Short Semiconductor ETN (SMHD). Both provide exposure to the VanEck Semiconductor ETF (SMH). Leveraged ETNs are tactical tools for active traders to capture daily volatility. These products launch amid a rapidly growing leveraged ETF market that now manages approximately $200 billion in assets. The new ETNs offer a cost-effective alternative to existing leveraged semiconductor ETF products. They feature a 70 basis point expense ratio and a full fee waiver for the first six months of trading. Decoding Semiconductor ExposureSMH offers exposure to the largest U.S. listed semiconductor producers. Tracking the MVIS US Listed Semiconductor 25 Index, the fund has climbed 50.1% so far this year. SMH uses a modified market-cap weighting methodology, capping individual holdings to 20% of total assets at each rebalance. This approach creates a highly concentrated portfolio with returns heavily dictated by the performance of top holdings. Constituents such as Nvidia (NVDA) and Taiwan Semiconductor (TSM) account for a large amount of SMH’s assets, sitting at 20.83% and 9.57% weights respectively. In contrast, the iShares Semiconductor ETF (SOXX B) tracks the ICE Semiconductor Sector Index and has returned 67.8% in 2026. The index enforces an 8% cap on the top five holdings and 4% on all others at quarterly rebalances. As a result, the fund spreads its exposure more evenly across approximately 30 constituents. This allows for broader exposure to the semiconductor sector, keeping weight in single mega-cap holdings like Nvidia significantly lower than SMH. The fund’s top two holdings, Nvidia and Advanced Micro Devices (AMD), account for 8.69% and 8.43% weightings in SOXX respectively.Shifting Dynamics in Semiconductor LeverageThe Direxion Daily Semiconductor Bull 3X ETF (SOXL B) and the inverse counterpart the Direxion Daily Semiconductor Bear 3X ETF (SOXS B) are widely used leveraged products for investors looking to amplify their exposure to SOXX. SOXL comes with an expense ratio of 75 basis points, while SOXS features a higher 100 basis point expense ratio. The launch of SMHU and SMHD changes the leveraged semiconductor playing field in both underlying strategy and cost. The two ETNs will operate with a full expense ratio waiver for the first six months of trading. Following the initial six-month period, the fee structure will reset to a standard 70 basis point expense ratio for both products. The lower fee structure offers investors a cheaper way to gain leveraged exposure to the semiconductor market compared to SOXX-based alternatives.Growing Demand for Leveraged ProductsInvestor demand for leveraged products is growing at a rapid pace. The leveraged ETF market now manages approximately $200 billion in investor assets, with more than 400 of 700 U.S. leveraged ETFs launched in the last two years, according to Baird Strategas. Leveraged funds use derivatives to amplify the returns of underlying assets, but they can also increase the severity of drawdowns. These products are meant to be used as tactical tools for active traders looking to capture significant daily price volatility. The launch of SMHU and SMHD expands REX Shares leveraged ETN lineup more broadly into the semiconductor sector. VettaFi is also the index provider for the MicroSectors Gold Miners 3X Leverage ETN (GDXU B) and the MicroSectors Gold Miners -3X Inverse Leveraged ETN (GDXD ). These strategies track the S-Network MicroSectors Gold Miners Index, providing leveraged exposure to a market-cap weighted index made up of the VanEck Gold Miners ETF (GDX B+) and the VanEck Junior Gold Miners ETF (GDXJ B+). For more news, information, and analysis, visit the Thematic Investing Content Hub. vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for SMHU, SMHD, GDXD, and GDXU for which it receives an index licensing fee. However, SMHU, SMHD, GDXD, and GDXU are not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of SMHU, SMHD, GDXD, or GDXU.