Interest rates reside around historic lows, but, broadly speaking, real estate investment trusts (REITs) are struggling. For example, the widely followed MSCI US Investable Market Real Estate 25/50 Index is lower by 21.60%.
However, not all REIT ETFs are lost causes this year. Just look at the Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF (SRVR). That focused real estate fund is higher by about 3% and could enjoy more upside as the 5G rollout continues over the course of this year.
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.
SRVR is proving to be one of 2020’s best REIT ETFs “because two areas of growth for real estate investment trusts, or REITs, are data centers that are benefiting from cloud-based collaboration and the work-from-home trend, and the rollout of 5G networks,” according to MarketWatch.
SRVR 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. It relies on dividends and REIT income and invests in a variety of tech infrastructure companies.
“As office leases expire, corporate management teams will have an incentive and opportunity to save a bundle. Not only can they trim their physical office footprints, but they may also be able to do so at a significantly reduced cost per square foot, with lower overall demand,” reports MarketWatch.
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.
Adding the near-term case for SRVR is the 5G boom. 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.
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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.