Why This REIT ETF Will Continue Impressing | ETF Trends

Some real estate investment trusts (REITs) and the related ETFs are disappointing income-starved investors, but the opposite is true of the Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF (SRVR).

Up more than 7% this year and closing in on new highs, 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.

Data centers and the 5G rollout continue bolstering the case for SRVR.

“Data centres are a vital cog in today’s digital world, vast warehouses that contain servers that host and distribute the cloud-based applications we rely on to work, learn and socialise.  Whenever we click on a photo stored on the cloud, we are accessing a data centre based who knows where,” according to Morningstar.

Serving up SRVR

SRVR is home to cell tower REITs, data center REITs, and similar facilities – these cell towers and data processing centers store the information and handle the orders that start the e-commerce process, making the fund a diverse play on some of the most important emerging technological themes.

“Nowadays, there is a lot of choice in terms of data centre companies. From an investment perspective they can vary widely and investors should understand the sectors and the companies they invest in before making rushed investments,” notes Morningstar.

Data and infrastructure real estate investment trusts (REITs) are pivotal pieces of the 5G puzzle and SRVR is the only fund explicitly dedicated to those REITs. With an expense ratio of 60 basis points, the ETF also offers dividends as a source of income to investors. Additionally, there’s an element of environmentally responsible investing with data centers.

“Google, for example uses highly efficient cooling systems and high-performance servers which are custom-designed to use as little energy as possible. We see this as a positive impact on the environment and carbon neutrality,” said Anjali Bastianpillai, product specialist at Pictet Asset Management, in an interview with Morningstar.

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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.