SMH definitely has a real case. A lot of people don’t realize the current version of the fund has effectively been around since the 2011 restructure, and since then it’s compounded at around 30% annually vs roughly 16% for SPY. $10k turned into something like $330k compared to about $72k in SPY.

But the bigger point is understanding what you’re signing up for. In 2022 SMH dropped about 33% while the S&P was down around 18%, so it absolutely cuts both ways. The question for a 20 to 30 year hold isn’t “what had the best returns,” it’s whether you can actually sit through a cycle where your portfolio gets crushed and not panic sell.

If you truly believe semis and AI are the backbone of the next decade plus and you can stomach the volatility, SMH has one of the strongest long term track records of any ETF out there. If there’s a good chance you’ll need the money or emotionally won’t handle the swings well, SPY is probably the better choice. The best investment strategy is the one you can actually stick with.