While they are still in the early stage of implementation, 5G networks will help power a meteoric rise in Internet of Things technology, providing the infrastructure required to carry massive amounts of data, allowing for a smarter and more connected world.
The concept is that 5G will be ubiquitous, and someday gadgets like your vacuum cleaner or lawn mower might use 5G. It’s often claimed to be one of the most important milestones in technology and, with companies like Verizon creating ads that suggest, it offers “unprecedented power” for consumers. 5G will be more reliable, faster and pervasive.
Investors interested in investing in 5G technology can look at these 3 ETFs:
Defiance Next Gen Connectivity ETF (FIVG)
FIVG offers investors liquid, transparent and low-cost access to companies engaged in the research & development or commercialization of systems and materials used in 5G communications.The underlying BlueStarGlobal 5G Communications Index tracks approximately 60 globally-listed stocks across all market capitalizations, with special weighting given to large caps (71%.) It uses a tiered weighting system that divides up holdings. The ETF has been around since March of 2019, and has an expense ratio of 0.30%.
The BlueStar 5G Communications Index is a rules based index that tracks the performance of a group of US-listed stocks, of global companies that are involved in the development of, or are otherwise instrumental in the rollout of 5G networks. These securities are part of the following categories: core carrier grade networking equipment including cellular antennas and routers, mobile network operators, satellite-based communications, enhanced mobile broadband chips, new radio technology, wireless network test and optimization equipment, cloud computing equipment, software defined networking or network functions virtualization, fiber optic cables, or cell tower and/or data center real estate investment trusts.
First Trust Indxx NextG ETF (NXTG)
The First Trust Indxx NextG ETF, formerly First Trust Nasdaq Smartphone Index Fund, seeks investment results that correspond generally to the price and yield (before the Fund’s fees and expenses) of an equity index called the Indxx 5G & NextG Thematic Index SM. The Fund will normally invest at least 90% of its net assets (including investment borrowings) in the common stocks and depositary receipts that comprise the Index.
The index is designed to track the performance of companies that have devoted, or have committed to devote, material resources to the research, development and application of fifth generation (“5G”) and next generation digital cellular technologies as they emerge.
Eligible securities must have a minimum market capitalization of $500 million, six-month average daily trading volume of at least $2 million ($1 million for emerging market companies), traded for at least 90% of the total trading days in the last six months or for a security recently issued in an initial public offering over the prior three months, a minimum free float of 10% of shares outstanding and a share price of less than $10,000 for new index constituents.
Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF (SRVR)
The Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF is a strategy-driven exchange traded fund (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 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.
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