The 5G ETF (FIVG), which debuted in March, already has $81.73 million in assets under management, making it one of this year’s most successful new exchange traded funds. FIVG’s rapid success underscores the viability of the 5G investment theme.
The Defiance Next Gen Connectivity ETF is the first ETF to emphasize securities whose products and services are predominantly tied to the development of 5G networking and communication technologies. FIVG does this by tracking The BlueStar 5G Communications Index, and FIVG attempts to invest all, or substantially all, of its assets in the component securities that make up the Index.
“5G is significant because it brings three compelling benefits: faster data speeds, lower latency, and increased connectivity,” said IHS Markit in a recent note. “And what couldn’t be done with older technology will now be possible as 5G enables altogether new use cases; examples include driverless cars, immersive entertainment and virtual reality with zero delay, uninterrupted video, and gaming with practically no latency. On the industrial front, 5G will be key to expanding and realizing the full promise of the Internet of Things (IoT), with the technology’s impact to be felt in smart homes, smart cities, and smart industries.”
5G: The Next Big Thing
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.
The possible applications of 5G technologies are only in the exploration stages, and the possibility of returns is uncertain and may not be realized soon. Nonetheless, it presents an opportunity that could see early adopters reap the benefits, especially if the technology is utilized to its fullest capabilities.
“Even so, the full range of planned 5G capabilities will not be available during initial launches,” according to Markit. “In fact, many key features most frequently associated with 5G—such as ultra-reliable low-latency communications (URLLC)—won’t be ready within the next 18 months. Instead, the wider range of 5G capabilities will unfold in a phased approach over the next few years.”
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The possible applications of quantum computing and 5G technologies are only in the exploration stages, and the possible returns are uncertain and may not be realized in the near future.
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References to other funds should not be considered an offer to buy or sell these securities.
The Defiance Next Gen Connectivity ETF is the first ETF to emphasize securities whose products and services are predominantly tied to the development of 5G networking and communication technologies. The fund does this by tracking The BlueStar 5G Communications Index. The Fund attempts to invest all, or substantially all, of its assets in the component securities that make up the Index.
Diversification does not ensure a profit nor protect against loss in a declining market.
It is not possible to invest directly in an index.
The SPAK Fund invests in companies that have recently completed an IPO or are derived from a SPAC. These companies may be unseasoned and lack a trading history, a track record of reporting to investors, and widely available research coverage. IPOs are thus often subject to extreme price volatility and speculative trading. These stocks may have above-average price appreciation in connection with the IPO prior to inclusion in the Index. The price of stocks included in the Index may not continue to appreciate and the performance of these stocks may not replicate the performance exhibited in the past. In addition, IPOs may share similar illiquidity risks of private equity and venture capital. The free float shares held by the public in an IPO are typically a small percentage of the market capitalization. The ownership of many IPOs often includes large holdings by venture capital and private equity investors who seek to sell their shares in the public market in the months following an IPO when shares restricted by lock-up are released, causing greater volatility and possible downward pressure during the time that locked-up shares are released.
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