If I Could Only Add 1 ETF to My Portfolio This Year, Here's Exactly What I'd Buy
2026-09-26 01:15
•Jeremy Bowman •The Motley Fool
••••• •••••••• Axe Cap view
Why the Semiconductor Boom Deserves a Spot on Your Radar
The AI-driven chip surge is real, but South African investors must weigh growth against local currency risks.
Semiconductors power the AI revolution, and ETFs like VanEck's SMH pack exposure to giants like Nvidia and TSMC, which are growing revenues at staggering rates. While these names aren't listed on the JSE, the USD/ZAR exchange rate plays a big role in returns for South African investors. A weaker rand can boost USD-denominated gains but also increases import costs and inflation pressures locally. Domestic big banks like Standard Bank and FirstRand might indirectly benefit from stronger trade flow and investment demand supporting tech pipelines, but they don't capture the global AI growth directly. The main risk is the global chip cycle peaking or any sudden rand strength that undermines dollar returns. Still, for those with room for growth exposure beyond local stocks, a carefully timed entry into semiconductor ETFs via offshore platforms makes sense. this is just our opinion and not financial advice
Add offshore exposure to SMH to gain from AI-driven semiconductor growth but hedge or monitor rand fluctuations closely. Meanwhile, hold a core position in defensive JSE names to anchor your portfolio against currency volatility.
- SMH
- USD/ZAR
- Standard Bank
- Rand strength undermining offshore returns
- Global semiconductor demand slowdown
6/10
The author recommends the VanEck Semiconductor ETF (SMH) as the single best ETF to add to a portfolio, citing the continued runway of the AI boom and strong growth prospects of its top holdings. Despite a high P/E ratio of 41, the ETF's major components like Nvidia and TSMC are expected to deliver substantial revenue growth, making it an attractive high-growth investment opportunity.
Our take is based on reporting first published by The Motley Fool.