The advent of 5G technology and its rollout within the next year could give investors something to cheer about when it comes to exchange-traded fund (ETFs) that focus on the technology that is expected to gain widespread adoption.
With such as groundbreaking technology at the ready, it could spark its own form of industrial revolution.
“New technologies have led to a series of industrial revolutions,” wrote Benchmark Investments founder Kevin Kelly in an email. “The fourth revolution, which Benchmark Investments calls the “Intelligence Revolution,” has just begun. The intelligence revolution will be predicated on complex data flows for artificial intelligence, augmented reality/virtual reality, blockchain, and the internet of things.”
However, the technology will require the necessary infrastructure in order to ease implementation. This is where investment opportunities in 5G infrastructure like the Pacer Benchmark Data & Infrastructure Real Estate SCTR Strategy (NYSEArca: SRVR) come into play.
“For the revolution to take hold, there will need to be an unprecedented buildout of mission critical technology infrastructure,” he added. “Trillions of dollars will need to be spent in the next several years as technology solutions will rely on an increasingly sophisticated foundation of data centers, wireless towers, and fiber optic networks. Investors need to position their portfolios to capitalize on the buildout of 5G and cloud infrastructure.”
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.
Other factors that will affect the growth of 5G:
- 75 billion Internet of Things Devices by 2025 –Gartner
- 95% of workloads and compute instances estimated will be processed by cloud data centers by 2021 –Cisco Global Cloud Index
- 11X Growth -65% CAGR –Estimated total IoT traffic between 2018 –2023 –AV & Co. Research and Analysis
- 71.5% of global data center traffic within the data center itself
For an in-depth look at 5G, read this whitepaper and for more information on SRVR, you can view the fact sheet here.
For more market trends, visit ETF Trends.