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Best ETFs to Invest in 5G Theme

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The fifth generation wireless technology or 5G is ready to take off and will be a game changer when it is fully implemented. There is a lot of excitement over the technology, given its transformative potential.  

The International Telecommunication Union (ITU), a UN body, has a set of requirements for the technology. It should offer download speeds of at least 20 gigabits per second, response times or “latency” of less than 1 millisecond and the ability to connect at least 1 million devices in one square kilometer.

With much faster speeds, 5G could change the way we live, work, travel and communicate. The technology will provide a big boost to the Internet of Things, self-driving cars, and virtual/augmented reality technologies

Major telecom companies have just started rolling out 5G service in very limited areas. Verizon (VZ - Free Report) enabled the service last month in parts of Chicago and Minneapolis. AT&T (T - Free Report) has started 5G service trials in parts of 19 cities. Sprint (S - Free Report) plans to launch the service in nine cities by the end of this quarter.

Samsung (SSNLF) was among the first phone makers to introduce a 5G smartphone. Apple (AAPL - Free Report) settled its multiyear legal dispute with Qualcomm (QCOM) recently, so we could see a 5G iPhone next year.

The Defiance Next Gen Connectivity ETF (FIVG - Free Report) is the first ETF focused exclusively on companies involved in research, development and usage of 5G technology. Its top holdings include CommScope (COMM) , Xilinx (XLNX ) and Skyworks (SWKS ) .

The First Trust Indxx NextG ETF (NXTG - Free Report) changed its focus last month to track an index of companies involved in 5G and next-generation cellular technologies. AMD (AMD - Free Report) , Equinix (EQIX - Free Report) and Cisco (CSCO - Free Report) are among its top holdings.

To learn more about these ETFs, please watch the short video above.

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