While there is plenty more rollout to come, the 5G phenomenon is receiving plenty of attention this year. One way of tapping the 5G theme is by gain exposure to the Internet of Things. The Global X Internet of Things Thematic ETF (SNSR), the first exchange traded fund dedicated to the Internet of Things (IoT) investment theme, is surging this year with a gain of more than 14%.
SNSR is considered a thematic ETF. Thematic strategies tend to be alpha-seeking, have a long time horizon and are growth oriented. The thematic investments also transcend classic sector, industry and geographic classifications as many overlap.
SNSR, which is two years old, targets the Indxx Global Internet of Things Thematic Index. IoT “includes the development and manufacturing of semiconductors and sensors, integrated products and solutions, and applications serving smart grids, smart homes, connected cars, and the industrial internet,” according to Global X.
“Given mounting excitement around this leap in wireless technology, there is growing interest in identifying the companies best positioned to benefit from the rise of 5G,” said Global X in a recent note. “Yet while 5G’s impact will be felt across multiple segments, helping to reinforce the disruptive nature of this theme, it also muddies the picture for which companies are the most sensitive to its rise.”
Evolve And Adapt
SNSR, which debuted in September 2016, is a global ETF with exposure to 10 countries with the U.S. accounting for about two-thirds of the geographic weight. The ETF holds 46 stocks, most of which hail from the technology sector.
Given rapid advancements in communications technology and the subsequent expectations for quick evolution in 5G technologies, SNSR could benefit investors looking to capture opportunities in continuously evolving market segment.
“Indeed, the connected devices and applications that will make up the IoT, which sits at the center of many disruptive technologies, are perhaps the closest analogues to social media in the 4G era,” said Global X. “Such nascent technologies include: AR/VR, robotics, autonomous vehicles (AVs), industrial IoT and smart home devices, just to name a few. These are the new ‘things’ or end-user devices enabled by 5G that are being added to the network.”
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