For REIT investors looking to invest in a potential growth market, Pacer ETFs last year launched the Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF (SRVR), which invests in companies that stand to benefit from the rise of 5G, the next generation of cellular mobile communications. Its three biggest holdings are Crown Castle (CCI), American Tower (AMT) and Equinix (EQIX).
“5G is important because it is going to spur a buildup in the number of cell phone towers,” says Sean O’Hara, president of Pacer ETFs. “As more and more Americans ‘cut the cord,’ there will be a need for faster service to enable streamed video and content, which is made in part by 5G. Secondarily, the movement towards autonomous vehicles cannot truly be expanded under the current 4G infrastructure. Finally, the growth in e-commerce will require better connectivity and faster speeds.”
“As a result, there will be increased revenue opportunity for the major publicly traded cell tower providers in the form of upgrades to 5G, and a necessary increase in the number of towers,” O’Hara says. Additionally, “there must be increased computing power, and that growing need will be served by companies like Equinix, the largest operator of data centers in the U.S.”