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For investors that are paying attention to the communication services and technology sectors, theres a good chance youre hearing plenty about 5G, the next generation of wireless communication systems.

Wide deployment of 5G started in some locations last year, but the rollout should gain significant momentum this year. At its core, 5G aims to reduce latency and increase download speeds. For those that are confused by all this tech jargon, Verizon (NYSE:VZ) has a straightforward definition.

That means quicker downloads, much lower lag and a significant impact on how we live, work and play, the telecom giant writes. The connectivity benefits of 5G are expected to make businesses more efficient and give consumers access to more information faster than ever before.

As the 5G theme unfolds, there will be both winning and losing ideas. And beyond some obvious, large-capitalization names, stock picking in the 5G landscape is likely to prove difficult. For many investors tapping 5G via exchange-traded funds will prove to be a sensible option. With that in mind, here are some of the top ideas among 5G ETFs to consider.

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Expense ratio: 0.30% per year, or $30 on a $10,000 investment

A couple weeks shy of its first birthday, the Defiance Next Gen Connectivity ETF (NYSEARCA:FIVG) isnt just a success story among 5G ETFs. Its confirmation that some thematic funds can captivate investors. A few weeks ago, FIVG vaulted to $200 million and now has over $235 million in assets.

FIVG follows the BlueStar 5G Communications Index and for a thematic ETF, its roster is fairly deep. It touches a wide array of segments applicable to 5G, including semiconductor names, telecom gear makers, satellite companies, cloud computing firms and many more.

FIVGs deep bench is important because the 5G ETF allocates about 10% of its combined weight to Nokia (NYSE:NOK) and Ericsson (NASDAQ:ERIC). These are both credible 5G plays, but also two of the themes most obvious laggards.

FIVG is only modestly higher to start 2020, but it popped 3.5% last week. That indicates it could be starting to accrue some momentum.

Expense ratio: 0.70%

The First Trust Indxx NextG ETF (NASDAQ:NXTG) was once a smartphone ETF. Nine months ago, First Trust threw in the towel on that concept and converted the smartphone fund into a 5G ETF. The difference has been meaningful as NXTG now has north of $315 million in assets under management.

Although they are both 5G ETFs, investors should not expect similar performances from FIVG and NXTG. While the First Trust fund has more holdings, its reach isnt as deep. It relies heavily on chip and computer services stocks to drive performance.

Another marquee difference between the two dedicated 5G ETFs and an important one is the fee. NXTG charges 0.70% per year, or 40 basis points more than the rival FIVG. For long-term investors, thats a trait that cannot be overlooked.

Expense ratio: 0.35%

Some semiconductor makers, including Qualcomm (NASDAQ:QCOM), have significant 5G exposure, putting the spotlight on chip funds such as the VanEck Vectors Semiconductor ETF (NYSEARCA:SMH).

Looking at the recent uptick in demand for Taiwan Semiconductor (NYSE:TSM) services, its evident that 5G is a legitimate catalyst for some chipmakers. Taiwan Semiconductor is SMHs largest holding at a weight of 12.7%.

TSM expects the penetration rate of 5G smartphones globally to reach midteens next year [2020] more optimistic than its single-digit forecast six months ago, reports the Wall Street Journal.

IHS Markit confirms that 5G is meaningful for semiconductor makers.

5Gs impact will spread far beyond the confines of the tech industry, impacting every aspect of society and driving new economic activity that will spur rising demand for microchips, according to the research firm.

Expense ratio: 0.68%

The Internet of Things (IoT), like 5G, is a standalone theme. But due to the intersection between the two, the latter brings opportunity for the former, and thats potentially rewarding for the Global X Internet of Things ETF (NASDAQ:SNSR). SNSR, the first ETF dedicated to the IoT space, tracks the Indxx Global Internet of Things Thematic Index.

One of the primary reasons that 5G and IoT belong in the same conversation is that both themes revolve around enhanced connectivity. Thats how they play off each other and thats why SNSR is a practical, if not under-appreciated, 5G ETF.

IoT vendors are working closely with manufacturing enterprises to provide more secure solutions tailored to their clients operations and digital transformation strategy, according to KPMG. With the help of 5G networks, IoT platforms will be able to connect solutions and sensors to monitor entire processes.

SNSR holds 50 stocks, over 41% of which are semiconductor names, another trait confirming its potency as a 5G ETF.

Expense ratio: 0.60%

There cant be 5G without 5G infrastructure. And many ETFs arent adequately inclusive of the real estate names dominating this infrastructure. For that matter, many traditional real estate funds sorely lack 5G exposure. Enter the Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF (NYSEARCA:SRVR).

SRVR is a coming off a year in which it obliterated standard real estate ETFs. And its off to a strong start in 2020. Its outpacing the widely followed MSCI US Investable Market Real Estate 25/50 Index by 120 basis points.

SRVR isnt just a run-of-the-mill cap-weighted fund. It screens components based on property, revenue and tenant type. The real estate companies in SRVR count firms such as AT&T (NYSE:T) and Verizon as their tenants.

Theres more to the SRVR story. In addition to being a realistic 5G ETF, the fund touches another booming theme: cloud computing. All those data centers that are powered by high-flying semiconductor makers require space, and lots of it. Rising demand for data consumption and cloud storage are two of the most pivotal factor seen driving members of SRVRs underlying index.

Expense ratio: 0.35%

The SPDR S&P Telecom ETF (NYSEARCA:XTL) is one of the last remaining traditional telecom ETFs,but as an equal-weight fund, its not excessively exposed to AT&T and Verizon.

XTLs underlying index provides exposure to alternative carriers, communications equipment, integrated telecommunication services, and wireless telecommunication, according to State Street.

XTL lacks the 5G glamour associated with some of the other funds mentioned here, but its a decent avenue for conservative investors. Just dont expect the big returns of FIVG, SNSR or SRVR.

Expense ratio: 0.65%

This list wouldnt be complete without some mention of China, because the worlds second-largest economy was one of the swiftest deployers of 5G last year. It is also sure to wind up with one of the most expansive 5G networks. For tactical investors, the Global X MSCI China Communication Services ETF (NYSEARCA:CHIC) is one of the best avenues for accessing Chinas 5G prowess.

China Mobile (NYSE:CHL), China Telecom(NYSE:CHA)and China Unicom(NYSE:CHU) the first two of which are among CHICs holdings have already been deploying 5G on a broad scale. Their cooperation means investors dont have to worry about competition adversely affecting these companies.

The three operators were expecting to operate nearly 130,000 5G base stations by the end of 2019. China Mobile announced plans to install 50,000 5G sites by end-2019, while China Unicom and China Telecom each target about 40,000, according to RCR Wireless.

Heres another reason to consider CHIC. China is obviously devoted to the 5G cause as it has outspent the U.S. on this front by more than $24 billion.

As of this writing, Todd Shriber did not own any of the aforementioned securities.

Read more:
7 Great ETFs to Buy for the Rise of 5G - Investorplace.com