In order to power today’s digital world, fuel in the form of data is a necessity. Given that, infrastructure must be built to support the increased demand for data, opening investment opportunities in thematic exchange traded funds (ETFs).
“Applications and other digital services are only as good as the data that fuels them, and data’s ability to fuel applications depends on the infrastructure that helps shuttle it across networks,” a Forbes article said. “Data is also growing at unprecedented rates—doubling from 2022 to 2026 according to IDC estimates—thanks to the arrival of 5G networks and connected devices,” the article added. “This data proliferation poses some logistical challenges for enterprise networks.”
Government subsidies are also helping to support this need to build out the infrastructure to support these data centers. As the world becomes increasingly more digital, this will only increase the demand for more of these projects.
“Accordingly, applications that fuel enterprise systems must be closer to the data, which means organizations must move compute capabilities closer to where that data is generated,” the article added. “To make this happen, organizations are building out infrastructure that supports data needs both within and outside the organization—from data centers and colos to public clouds and the edge. As a result, IT infrastructure is becoming more decentralized.”
A Digital Infrastructure ETF Opportunity
As mentioned, this opens up growth opportunities for investors looking to add something apart from the run-of-the-mill real estate investment trust (REIT) or real estate ETF. This is where the Global X Data Center REITs & Digital Infrastructure ETF (VPN) comes into play.
The fund seeks to provide investment results that correspond to the Solactive Data Center REITs & Digital Infrastructure Index. Overall, the fund seeks to invest in companies that operate data center REITs and other digital infrastructure supporting the growth of communication networks.
VPN investors can get access to:
- High growth potential: Global data center investments are expected to increase from $245 billion in 2019 to $432 billion in 2025 to support the growth of 5G, smart grids, and other forms of tech-based infrastructure.
- Global tailwinds: The shift to 5G-enabled devices is well underway. 5G subscriptions worldwide are expected to surpass one billion in 2022 and over three billion by 2026. Accelerated development of digital infrastructure is necessary to support this growth.
- REIT exposure: VPN invests in REITs, among other holdings, an asset class that has historically provided high income potential.
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