5G ETF ..Good investment or another hype?

5G has the world a bit divided but its fair to say there is a good amount of interest on the potential for 5G. There is a lot of interest from retail investors  on the best way  they can invest in those companies focused on 5G.

After some digging came across this ETF focused primarily on a portfolio which will benefit from 5G investments i.e The key holdings consist of companies whose products or services are predominantly tied to the development of 5G networking and communication technologies.

FIVG has 6 kinds of companies in the portfolio :

1. Chip manufacturers who may benefit from the devices involcing new 5G chipsets ( Xilinx, Broadcom, Qualcomm etc)
2. Core cellular networking and satellites related companies ( e.g Ericsson, Nokia etc)
3. Mobile Operators running the potential 5G ( Orange , China Mobile , Verizon etc)
4. Tower companies /Data Centre players supporting the infrastructure of these organizations. ( e.g — ATC, Crown Castle etc.)
5. Hardware and software companies focussed on OSS/BSS /QoS/ Network testing and optimization (Amdocs, Corning etc )
6. Security companies — who will benefit from the Cybersecurity spend for enterprises on 5G ( e.g Akamai , F5 etc)

If anyone is interested in the Detailed portfolio by companies , please see the major portfolio companies. I have only listed companies where the Fund has at least 1% of the investment ).

Performance so far : The ETF has only been around for less than  a year  so its still too early to rate its previous performance.

My personal opinion :

The fund has picked a good mix of telecom infrastructure /services companies based on segments ( many of them are good standalone on their own merit ) .

But many of the companies in the holdings may not be pure 5G companies or 5G may not be significant portion of their revenues . But these will be companies who are most likely to have an upshot of 5G goes close to the hype.

So if you are convinced 5G is going to be big then as a retail investor this does see to be a good proxy ETF for those retail investors looking at a 5G upshot to their portfolio .

However i still feel a smaller portfolio with some focused companies may be a better bet on 5G.

Disclaimer :This is my personal opinion on a new ETF . I am not a certified Financial Advisor and am not advocating this investment. This piece should be treated as an independent , Informational piece and not construed as an Investment advice. Please do your own Due diligence or talk to your Investment adviser before you make any financial decision.

Reference :

1.) https://www.defianceetfs.com/fivg

2.) https://medium.com/@ajaysunder/5g-investment-opportunity-for-retail-investor-a-5g-etf-exchange-traded-fund-30b46335b2f4

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