Huawei Decision Could Pave the Way for Gains in 5G ETFs

Amid the trade war turmoil, reports surfaced that Chinese telecommunications equipment giant Huawei could potentially hinder the buildup of 5G infrastructure. U.S. President Donald Trump’s further actions on Huawei conducting business in the U.S. could pave the way for gains in exchange-traded funds (ETFs) that focus on 5G technology.

China’s state media argued that banning Huawei would reduce competition and drive up the cost of implementing 5G technology, but according to experts, that claim doesn’t hold weight. In addition, there is the threat of Huawei using the technology as a means to deploy spy technology, but apparently, that may also be nothing more than fear mongering.

“I’m not in a position to say whether they are a threat or not, but I think the onus is on Huawei to be able to say … ‘No we’re not a threat to security,’” said Crawford Del Prete, president at IDC.

Furthermore, after U.S. President Donald Trump met with Chinese President Xi Jinping at the G-20 summit earlier this summer, both leaders agreed cease fire on the trade war and begin new negotiations. Additionally, Trump said he would allow U.S. companies to keep selling products to Huawei.

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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