Analyst Report
The Defiance Next Gen Connectivity ETF (FIVG) invests in companies involved in research, development and commercialization of new infrastructure that supports connective technology.
The ETF tracks the BlueStarGlobal 5G Communications Index, which identified about 60 U.S.-listed stocks from around the world that are involved in the development of 5G networks, such as carrier equipment manufacturing like cell phone antennas and routers, enhanced mobile broadband chips, new radio technology, cloud computing equipment, satellite communications and mobile networks.
Maximum weights are imposed on sub-sectors of the 5G industry to keep the largest firms from dominating the portfolio. Top holdings include Ericsson, Qualcom, Analog Devices, as well as familiar U.S. telecom like Verizon and AT&T.
While other funds own some of the same stocks as FIVG, none offer the same targeted exposure. At 30 basis points, FIVG is a bit pricey for passive but on the lower end for niche thematic products.
The closest competitor might be the First Trust Indxx NextG ETF (NXTG, formerly FONE prior to May 2019), which targets the same industry but owns a very different portfolio. Both funds were launched or reconstituted in the first half of 2019, so there’s no long-term track record to compare, but FIVG costs half as much as NXTG, has garnered more assets, and trades with tighter spreads.
