SMH vs. MSFT

Last updated Jun 30, 2026

SMH (VanEck Semiconductor ETF) is Semiconductors fund tracking the MVIS US Listed Semiconductor 25 Index, while MSFT (Microsoft Corporation) is a stock. Over the past 10 years, SMH returned 37.70%/yr vs 23.34%/yr for MSFT. A 0.58 correlation means they provide meaningful diversification when combined.

Performance

SMH vs. MSFT - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in VanEck Semiconductor ETF (SMH) and Microsoft Corporation (MSFT). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, SMH achieves a 75.49% return, which is significantly higher than MSFT's -23.45% return. Over the past 10 years, SMH has outperformed MSFT with an annualized return of 37.70%, while MSFT has yielded a comparatively lower 23.34% annualized return.

SMH

• 1D: 3.33%
• 1M: 5.52%
• YTD: 75.49%
• 6M: 73.52%
• 1Y: 127.69%
• 3Y*: 61.44%
• 5Y*: 37.79%
• 10Y*: 37.70%

MSFT

• 1D: -1.18%
• 1M: -18.14%
• YTD: -23.45%
• 6M: -24.00%
• 1Y: -25.09%
• 3Y*: 3.48%
• 5Y*: 7.23%
• 10Y*: 23.34%

*Multi-year figures are annualized to reflect compound growth (CAGR)

SMH vs. MSFT - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
SMH VanEck Semiconductor ETF	75.49%	49.17%	39.10%	73.38%	-33.53%	42.13%	55.53%	64.45%	-9.05%	38.48%
MSFT Microsoft Corporation	-23.45%	15.58%	12.93%	58.19%	-28.02%	52.48%	42.53%	57.56%	20.80%	40.73%

Correlation

The correlation between SMH and MSFT is 0.20, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.20
Correlation (3Y) Calculated over the trailing 3-year period	0.46
Correlation (5Y) Calculated over the trailing 5-year period	0.59
Correlation (10Y) Calculated over the trailing 10-year period	0.61
Correlation (All Time) Calculated using the full available price history since Jun 5, 2000	0.58

Over the past year, the correlation between SMH and MSFT has dropped to 0.20 - well below their long-term average of 0.58, suggesting their price drivers have been diverging.

Return for Risk

SMH vs. MSFT — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

SMH

SMH Risk / Return Rank: 95
SMH Sharpe Ratio Rank: 97
SMH Sortino Ratio Rank: 92
SMH Omega Ratio Rank: 92
SMH Calmar Ratio Rank: 97
SMH Martin Ratio Rank: 96

MSFT

MSFT Risk / Return Rank: 10
MSFT Sharpe Ratio Rank: 7
MSFT Sortino Ratio Rank: 10
MSFT Omega Ratio Rank: 10
MSFT Calmar Ratio Rank: 16
MSFT Martin Ratio Rank: 8

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

SMH vs. MSFT - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for VanEck Semiconductor ETF (SMH) and Microsoft Corporation (MSFT). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	SMH	MSFT	Difference
Sharpe ratio: Return per unit of total volatility	3.65	-0.94	+4.59
Sortino ratio: Return per unit of downside risk	3.80	-1.23	+5.04
Omega ratio: Gain probability vs. loss probability	1.54	0.84	+0.69
Calmar ratio: Return relative to maximum drawdown	8.60	-0.73	+9.33
Martin ratio: Return relative to average drawdown	30.63	-1.43	+32.07

SMH vs. MSFT - Sharpe Ratio Comparison

The current SMH Sharpe Ratio is 3.65, which is higher than the MSFT Sharpe Ratio of -0.94. The chart below compares the historical Sharpe Ratios of SMH and MSFT, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

SMH vs. MSFT - Drawdown Comparison

The maximum SMH drawdown since its inception was -84.96%, which is greater than MSFT's maximum drawdown of -69.38%. Use the drawdown chart below to compare losses from any high point for SMH and MSFT.

Drawdown Indicators

	SMH	MSFT	Difference
Max Drawdown Largest peak-to-trough decline	-84.96%	-69.38%	-15.58%
Max Drawdown (1Y) Largest decline over 1 year	-14.93%	-34.50%	+19.57%
Max Drawdown (3Y) Largest decline over 3 years	-35.74%	-34.50%	-1.24%
Max Drawdown (5Y) Largest decline over 5 years	-45.30%	-37.15%	-8.15%
Max Drawdown (10Y) Largest decline over 10 years	-45.30%	-37.15%	-8.15%
Current Drawdown Current decline from peak	-5.52%	-31.58%	+26.06%
Average Drawdown Average peak-to-trough decline	-40.99%	-21.79%	-19.20%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.18%	17.56%	-13.38%

Volatility

SMH vs. MSFT - Volatility Comparison

VanEck Semiconductor ETF (SMH) has a higher volatility of 19.49% compared to Microsoft Corporation (MSFT) at 12.78%. This indicates that SMH's price experiences larger fluctuations and is considered to be riskier than MSFT based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	SMH	MSFT	Difference
Volatility (1M) Calculated over the trailing 1-month period	19.49%	12.78%	+6.71%
Volatility (6M) Calculated over the trailing 6-month period	29.69%	23.98%	+5.71%
Volatility (1Y) Calculated over the trailing 1-year period	35.27%	26.93%	+8.34%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	35.90%	26.97%	+8.93%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	32.99%	27.15%	+5.84%

Dividends

SMH vs. MSFT - Dividend Comparison

SMH's dividend yield for the trailing twelve months is around 0.17%, less than MSFT's 0.97% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
MSFT Microsoft Corporation	0.97%	0.70%	0.73%	0.74%	1.06%	0.68%	0.94%	1.20%	1.69%	1.86%	2.37%	2.33%
SMH VanEck Semiconductor ETF	0.17%	0.31%	0.44%	0.60%	1.18%	0.51%	0.69%	1.50%	1.88%	1.43%	0.80%	2.14%

Frequently Asked Questions

Can I hold both SMH and MSFT in my portfolio?

SMH and MSFT have a correlation of 0.20, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, SMH or MSFT?

SMH has higher volatility (19.49%) compared to MSFT (12.78%). In terms of maximum drawdown, SMH dropped -84.96% vs MSFT's -69.38%.

Which has better risk-adjusted returns?

SMH currently has the higher Sharpe Ratio (3.65 vs -0.94), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.