According to a statement released on Wednesday, the fund holds 25 positions and physically replicates the MarketVector China Semiconductor 10 Percent Capped Screened Index. It only includes companies that generate at least 50 percent of their revenue from semiconductors or semiconductor equipment.

The annual total expense ratio is 0.65 percent. The ETF trades under the ticker SMHC and is denominated in U.S. dollars. Income is reinvested.

China invests in its own chip industry

The launch comes against the backdrop of China’s efforts to build an independent semiconductor industry. The country is one of the world’s largest buyers of chips, but it remains heavily dependent on foreign suppliers for the production of technologically advanced semiconductors. Tighter U.S. export restrictions are increasing pressure on China to develop its own alternatives. According to VanEck, beneficiaries include chipmaker Cambricon and equipment maker NAURA, which could partially replace foreign suppliers in the Chinese market.

Political risks remain high

However, investments in Chinese semiconductor companies are associated with significant political and regulatory risks. Trade restrictions, state intervention and concentration on a single industrial sector can lead to sharp price swings. VanEck manages around $244 billion worldwide. Its existing product range includes an internationally focused semiconductor ETF, which, according to the company, has reached assets of more than $8 billion.