In every corner of the world, people are using handheld devices for communication. In the next few years, internet connection will be available everywhere, and the world will become a global village. 5G networks have set the stage for the whole globe to be connected.
To become a part of the current and projected telecommunications boom, you don't have to buy stocks of all industrial companies. All you need is a 5G exchange-traded fund that has all your telecommunications interest combined in one basket, and this is where we come in. Our guide highlights the best 5G ETFs in 2021 with detailed reasons why anyone closely following the telecommunications industry should take a look at them.
What is a 5G ETF?
An ETF, an exchange-traded fund, is a basket of tradable securities. It might be made up of stocks, commodities, 5Gs, or a mix that cuts across the board. ETFs track an index of the underlying asset, but their price depends on the market supply and demand. Therefore, it is not uncommon for the ETF prices and the index prices to vary.
5G ETF refers to an exchange-traded fund made up of companies in the telecommunications industry offering 5G-related services. 5G, 5th generation mobile network, is the most advanced global wireless standard offering a better user experience, higher data speed, more reliability, broader network capacity, ultra-low latency, and increased availability. It can connect devices, equipment, and objects under one wireless network without compromising performance or efficiency.
The global community is driving on the fast lane towards a reality where every aspect of life will be accommodated by the internet connection. Many of our household devices and equipment are currently internet-enabled and can carry out even the most mundane tasks. As we demand more from our devices and equipment, the 5G network's negligible latency, high speed, expanded connectivity capacity, and reliability will give access to previously uncharted realms of the mobile ecosystem, impacting every aspect of our lives.
To be a part of this journey, not only as an observer but as an investor, you need to focus on the telecommunications industry. The most inexpensive way to diversify your portfolio while keeping the risks low is through 5G ETFs rather than individual stocks. You can invest in the 5G ETFs by taking ownership or trading in 5G contracts of differences, speculating on price variances.
Invest in 5G ETFs in 3 Steps
Open a Trading Account
Open a trading account with a broker that offers 5G ETFs, activate your new account and fund it.
Choose 5G ETFs
Choose whether to invest in 5G ETFs or trade them via CFDs. You can also do both.
Screen the available 5G ETFs and place trades in line with your investment goals.
Where can I trade 5G ETFs?
There is only one hustle-free way to be a part of the 5G ETF market, and it’s through online brokerage firms. Online brokers offer various 5G ETFs under one trading platform coupled with other investment instruments. As long as you have an internet connection, you’ll be able to access your trading account 24/7.
We chose these 3 brokers because they provide the most up-to-date fundamentals, the most extensive information on market research, and technical data to facilitate 5G ETFs screening. A trading platform with great choices in 5G ETFs and other tradable instruments coupled with a seamless trading experience. Their trading platform is also relatively inexpensive.
Below is our list of the top brokers for 5G ETFs:
Best 5G ETFs to buy now
These are the best 5G ETFs to buy in 2021. They have the potential to become megatrends and will diversify your portfolio.
The Top 10 5G ETFs for 2021 are:
- Vanguard Communications Services ETF [VOX ]
- First Trust Indxx NextG ETF [NXTG]
- Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF [SRVR]
- Global X Internet of Things [SNSR]
- VanEck Vectors Semiconductor ETF [SMH]
- iShares US Telecommunications ETF [IYZ]
- Defiance Next Gen Connectivity ETF [FIVG]
- VanEck Vectors Video Gaming and eSports ETF [ESPO]
- The Communications Services Select Sector SPDR Fund [XLC]
- iShares Global Comm. Services ETF [IXP]
Vanguard Communications Services ETF [VOX ]
If you believe that people are heavily reliant on data and this is only going to worsen, VOX ETF is your best bet. It gives you access to the big players in the telecommunications and technology industries. It boasts $3.7 billion in assets under management and an expense ratio of 0.1%. The VOX is ranked 1st in the US best communications ETFs list and is one of the most liquid 5G ETFs.
First Trust Indxx NextG ETF [NXTG]
Boasting members such as Qualcomm and Chinese electronics firm Xiaomi Corp, this small ETF goes toe to toe with the industry big boys by focusing on companies that produce hardware for the telecom industry. It has $700 million in assets under management with an expense ratio of 0.7%. It is an excellent ETF for those who want to be part of the 5G craze in a diversified manner without investing in established telecom companies.
Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF [SRVR]
The SRVR tracks the Benchmark Data & Infrastructure Real Estate. It is a non-diversified fund made of companies that provide firms and data real estate companies with cloud equipment and telecom towers. It boasts $1.1 billion in assets under management with an expense ratio of 0.6%.
Global X Internet of Things [SNSR]
The SNSR is positioned to take advantage of the "Internet of Things," as it contains companies that bring equipment and "things" to connect to the 5G network. It tracks the performance of the Indxx Global Internet of Things Thematic Index. SNSR assets under management are to the tune of $411.7 million with an expense ratio of 0.7%.
VanEck Vectors Semiconductor ETF [SMH]
The SMH concentrates on companies in the chip-making business for consumer electronics products and 5G technology. The market for both of these products is insatiable, and it's only going to get better as the need for more advanced technology picks up pace. It is ranked 13th in the best managed long-term funds. It has slightly over $5 billion in assets under management with an expense ratio of 0.4%.
iShares US Telecommunications ETF [IYZ]
IYZ ETF concentrates on the less competitive telecom service sector with approximately 40% of its contributors coming from two industry bigwigs, AT&T and Verizon. It boasts $413.9 million in assets under management with an expense ratio of 0.4%. Its focus on the service industry resulted in 1-year returns of almost 9%.
Defiance Next Gen Connectivity ETF [FIVG]
The FIVG is an ETF with a global presence skewed towards technological firms providing 5G technology hardware (75%). It boasts biggies of the technology hardware sector such as Ericsson, a German Electronics giant, and Nvidia Corp, a US chipmaker. It tracks the performance of the Bluestar 5G Communications index and has $1.1 billion in assets under management with an expense ratio of 0.3%.
VanEck Vectors Video Gaming and eSports ETF [ESPO]
The ESPO is a non-diversified global fund that tracks the Global Video Gaming & eSports Index. With the reduced latency, solid reliability, and expanded connectivity provided by 5G technology, the global eSports and gaming industry has no option but to provide seamless and highly interactive gaming. It has $937.1 million in assets under management with an expense ratio of 0.55%.
The Communications Services Select Sector SPDR Fund [XLC]
The XLC is a more heterogeneous 5G ETF with contributors from the entertainment industry, media, diversified telecommunications, interactive media and services, and wireless telecommunications services. It is ranked 2nd in the communications ETFs list. It has slightly over $12.7 billion in assets under management with an expense ratio of 0.12%.
iShares Global Comm. Services ETF [IXP]
IXP ETF leaves the 70% lion's share for home-grown corporations, but it also has a global presence in Tencent Holdings, an internet giant in Asia. It tracks the performance of global communication services' equities and is ranked 5th in the communications ETFs list. It boasts $329.3 million in assets under management with an expense ratio of 0.5%. It is very popular because of its diversification.
Expert tip on investing in 5G ETFs
With 5G technology adoption expanding, all ETFs in this industry have growth potential. Screen the ETFs using the expense ratio and settle on the inexpensive ones, which meet your investment goals.
Why trade 5G ETFs?
Like the 5G market, emerging markets can provide investors with excellent returns, especially since the world is moving towards internet-driven technology.
Frequently Asked Questions
All of the 5G ETFs discussed above can potentially become megatrends in 2021.
Yes. As G5 technology evolves and its adoption expands, 5G ETFs will be the safest bet for megatrends.
Anyone can invest in 5G ETFs.
ETFs are a basket of tradable fixed securities, while shares refer to stocks of a single company.
5G ETFs are ideal for beginner investors because they can potentially become megatrends offering a relatively low expense ratio.
The size of global 5G-related devices is approximately $106 billion, with research showing that it is growing at an annual rate of almost 40%.