Technology is always evolving, and smart investors can take advantage of the changes. But if you’ve already been through the dot-com bust and the 2008/2009 economic collapse, it’s understandable that you might be wary of “new” technology, like 5G, explains Nancy Zambell, editor of Financial Freedom Federation.
But there’s more to it than just hype. One easy way to invest in 5G and limit that “new tech” risks to put your money into the best 5G ETF.
Sure, some technological advances may not appear to be a worthy investment at face value. (Google Glass, anyone? Or the Segway?) That’s not always the case, though, especially if the way we use the technology is easy to understand.
This is the case with 5G. This next-generation technology isn’t entirely new because its predecessors have been around for a while. People already know about 4G, and the hype around 5G has been around for a time. However, investors may only now be looking for investments in the best 5G ETF or stocks.
Understanding why 5G is a worthy investment
One might think that the differences between 4G and 5G are insignificant. After all, it is only an increase of one number. However, 5G is ultimately 100 times faster than 4G, so it is a fairly significant upgrade.
This increase in speed means that many internet-based activities can happen quicker. Beyond higher speeds, there is also a decrease in latency for 5G users, so network delays may be hard to even notice.
The 5G network can have more connected devices on it, and can do so with less interference and greater efficiency. As one final demonstration, the average speed of 5G is 200-400 megabytes per second (Mbps), whereas 4G’s average speed is 25 Mbps.
These changes leading to quicker load times and better network capabilities will allow people and businesses to do more online with greater ease and efficiency. Those changes can lead to a good place to invest your money.
Characteristics of the best 5G ETF
One reason to look for the best 5G ETF over individual 5G stocks is diversification. For instance, an investor could buy stock in Qualcomm (QCOM), which is an individual 5G option. Or an investor could buy Defiance Next Gen Connectivity ETF (FIVG), which has around 75 holdings in the 5G industry.
This ETF has about 20% of its holdings focused on the leading 5G companies, including Qualcomm. Investing in whatever you deem to be the best 5G ETF will provide you with more holdings than an individual stock, so you have a better chance of profiting over time.
Looking for the right characteristics
When it comes to the 5G ETF options in the market, consider the types of companies the ETF holds. The 5G market is slightly different from some others, where speculation and stock promotions are the norm.
The difference in 5G is that many of the available investments are from reputable companies. This makes it easier to get involved since some of these companies already have market share, brand recognition, and profits.
Next, consider where you want to focus your investment in 5G. It’s not just cellular infrastructure and mobile devices that benefit from 5G access. There are also applications for 5G in healthcare and automotive. Perhaps those areas are a better option for your portfolio?
Vanguard Communication Services ETF (VOX) and Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF (SRVR) are two of the biggest 5G ETFs available in regards to assets under management.
Overall, investing in the best 5G ETF should allow you to save on fees because traditional ETFs inherently have lower management expense ratios. Investing in 5G ETFs over individual stocks will help you keep costs down while also providing less risk than an individual stock.
