Many investors are familiar with the 4G mobile internet network, but soon 5G networks will trump the status quo as the next generation of mobile internet connectivity, offering faster speeds and more reliable connections on smartphones and other devices than ever before.
Unifying cutting-edge network technology and groundbreaking research, 5G should offer consumers connections that are dramatically faster than current connections, with average download speeds of around 1GBps expected to soon be the norm.
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.
Investors interested in investing in 5G technology can look at these 2 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. 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.
For more investing ideas, visit our Thematic Investing Channel.