A variety of technological themes are becoming increasingly relevant in the real estate industry. However, many of the traditional exchange traded fund’s addressing this sector lack the necessary exposure to this trend. The Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF (SRVR) solves that problem.
The Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF is a strategy-driven ETF that aims to offer investors exposure to U.S. companies that generate the majority of their revenue from real estate operations in the data and infrastructure sector. There are significant real estate demands associated with the 5G rollout, enhancing the 5G ETF status of the Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF.
While SRVR is often viewed as a tech real estate play and rightfully so, it has leverage to changing retail landscape as does its stablemate, the Pacer Benchmark Industrial Real Estate SCTR ETF (NYSEArca: INDS).
The “surge in online activity will require more servers and storage gear, and that means more data centers. The pandemic has accelerated broad secular shifts that favor e-commerce, and it’s a trend that will require lots of digital infrastructure,” reports Rich Miller for Data Frontier Center.
Tech Tenacity Plus Retail Relevance
While some analysts are speculating that industrial REITs could be confounded by weakening consumer confidence on par with retail ETFs, other data points suggest SRVR is positioned to endure retail weakness. In fact, thanks to the e-commerce boom, the ETF is poised to thrive as shoppers move online.
The COVID-19 pandemic is forcing a slew of malls and retail store closures across the world. In the U.S., many non-essential retailers are temporarily closed and while traditional grocery stores remain open, many shoppers are opting to order from home and not risk contracting the coronavirus by venturing outside.
As more retailers scale up online operations, they need warehouse space – a theme INDS is levered to. Those companies also technology infrastructure and data centers, which SRVR provides exposure to. Good news for those considering SRVR: The technology upgrade cycle for retailers is still in its formative stages.
“The appetite for upgrades is being driven by customers who previously made heavy use of smartphones for home data consumption, but now require beefier wired connections. Data from Dell’Oro is cited, indicating that network investment has been stable, meaning the extra demand will likely require fresh investment in additional capacity,” according to Data Frontier Center.
For more alternative investing ideas, visit our Alternatives Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.