The third segment (15 percent weight) is hardware and software companies that will make sure the 5G service runs smoothly, while the fourth segment (10 percent weight) includes chipmakers and producers of fiber optic cables whose products enable mobile networks and the 5G cloud.
At rebalancing, no company will have a portfolio weight greater than 5 percent. “We wanted to make sure the bigger names don’t drive the performance of the portfolio, and that we have more exposure to the higher-growth names with potential for greater rates of return,” Dellaquila says.
He adds that the FIVG fund has both growth and income aspects—the latter thanks to its holdings in REITs and traditional dividend-paying telecom companies. He posits the fund can be used as an alpha-generating satellite position within an investment portfolio’s core equity component.
FIVG is the third ETF from Defiance, a firm whose M.O. is to create products that give investors precise exposure to transformative industries. Last August it debuted the Defiance Future Tech ETF (AUGR), which is focused on augmented reality and virtual reality technologies.
A month later it launched the Defiance Quantum ETF (QTUM) that invests in companies involved with developing and monetizing quantum computer technology.
As with FIVG, those two ETFs are based on BlueStar indexes.