This 5G ETF Got Big In A Hurry

June 25, 2019: 07:52 AM ET

Leave it to First Trust to resuscitate an exchange traded fund that seemingly was on life support, reconfigure that fund and, more importantly, find a way of driving assets into that ETF.

Just weeks after re-configuring a smartphone ETF into a 5G fund, the First Trust Indxx NextG ETF (NASDAQ: NXTG) is already the largest ETF dedicated to the 5G communications theme. NXTG debuted on May 29.

As of June, the new 5G ETF had $131.5 million in assets under management, according to issuer data, a stunning turn of events for the fund formerly known as the First Trust Nasdaq Smartphone Index Fund.

The First Trust Nasdaq Smartphone Index Fund was more than eight years old before Illinois-based First Trust cast that idea aside in favor of NXTG and it appears investors like the new idea. Based on where the First Trust Nasdaq Smartphone Index Fund was at in terms of assets on its last day of trading where NXTG is at today, investors have added more than $110 million to the new 5G ETF in just three weeks.

NXTG tracks the Indxx 5G & NextG Thematic Index and competes directly with the Defiance Next Gen Connectivity ETF's (NYSE: FIVG). Obviously, FIVG is the older of the two 5G ETFs, having debuted in March.

NXTG's 99 holdings, none of which exceed weights of 1.72%, including semiconductor makers, telecom gear manufacturers, real estate investment trusts and mobile telecom providers.

Here is where the competition between FIVG and NXTG gets interesting and it speaks to just how stunning it is that the First Trust fund has over $131 million in assets under management.

First Trust's 5G ETF charges 0.70% per year, or $70 on a $10,000 investment. That might not seem bad for a thematic ETF, but it's more than double the 0.30% charged by the rival FIVG. That's a wide gap between two ETFs providing exposure to similar investment concepts.

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