As China looks to become less reliant on the U.S. for resources like technology, its looking to build up its 5G mobile network. As such, exchange-traded fund (ETF) investors should take note of funds that focus on 5G technology.
Per a Reuters report, “Two of China’s big three state telecom companies, China Telecom and China Unicom, are working together to build a 5G mobile network in a cost-cutting venture that could crimp orders for vendors such as Huawei Technologies.”
As it currently stands, China represents the biggest market for smartphones so building out the country’s infrastructure to accommodate the forthcoming 5G technology will be a major undertaking, especially from a financial perspective. Nonetheless, with major telecom companies combining their resources, this could hopefully lessen the financial blow of such a buildout.
The U.S. and South Korea are already in the midst of implementing 5G services and so China is in a mad scramble to catch up to its global competitors. China itself plans to roll out the service in more than 50 cities by the end of 2019.
With such am ambitious undertaking, ETF investors can look to funds that hone in on 5G technology.
With 5G technology expected to revolutionize the transmission of data, it could lead to smart cities that thrive on digital applications. However, before the deployment of 5G takes place, however, the buildup of its infrastructure is necessary, which is where investors can take advantage of ETFs like the Pacer Benchmark Data & Infrastructure Real Estate SCTR Strategy (NYSEArca: SRVR) and the Pacer Benchmark Industrial Real Estate SCTR Strategy (NYSEArca: INDS).
Investors who missed out on the serendipitous run of FAANG (Facebook, Amazon, Apple, Netflix, Google) stocks in the last bull run can look to capitalize on disruptive tech options like 5G technology. 5G technology will use a higher frequency band versus the current 4G technology standard, resulting in faster transmission of data.
Being able to transmit copious amounts of data at a faster rate is certainly of benefit for wireless companies and their users, but 5G could be a major disruptor in various industries. Before this occurs, however, the infrastructure to accommodate this enhanced technology must be in place.
With a buildup necessary in cell towers and distribution warehouses, a demand for public real estate could follow.
As such, investors can look at SRVR, which seeks to track the total return performance of the Benchmark Data & Infrastructure Real Estate SCTR Index. The index is generally composed of the U.S.-listed equity securities of companies that derive at least 85% of their earnings or revenues from real estate operations in the data and infrastructure real estate sectors.
Additionally, investors can look to INDS, which seeks to track the total return performance of the Benchmark Industrial Real Estate SCTR Index. The index measures the performance of the industrial real estate sector of the U.S. equity market, which includes warehouse and self-storage real estate sub-sectors.
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