We’re coming toward the end of InvestorPlace’s best ETFs for 2019 contest and my pick, the Pacer Benchmark Data & Infrastructure Real Estate ETF (NYSEARCA:SRVR), remains at the top of the pack, only slightly behind Vince Martin’s pick, iShares U.S. Home Construction ETF (BATS:ITB), in terms of year-to-date performance (SRVR is up 40% YTD; ITB is up 42% YTD).
Although I don’t think investors should expect the 5G exchange-traded fund to climb significantly higher by the end of the year, I do believe it can win the contest, and possibly gain a few more percentage points along the way. Since my last update in July, the ETF has climbed 13%, maintaining its No. 2 ranking among the best ETFs.
What to Expect From SRVR at the End of 2019
At the start of the year, I mentioned the yield curve inverting and the trade war between the U.S. and China as reasons for investors to have concern. But, broadly speaking, it hasn’t necessarily been all doom and gloom for stocks in 2019.
In fact, as InvestorPlace contributor Luke Lango points out in his recent article on high-performing S&P 500 stocks:
“Through the first half of the year, the S&P 500 was on track for its best year in over two decades. To be sure, gains have been muted in the third quarter despite major indices flirting with all-time highs. But with the S&P 500 up 20% year-to-date, stocks are still having one of their best years this century.”
True as this may be, I still maintain my long-term case for SRVR, as its holdings present unique opportunities — a combination of dividend-boosted stability and continual growth potential — in a questionable time, where the trade war has no clear end in sight.
Even if you share the optimism of investors like Luke Lango, SRVR is one of the best ETFs you could buy this year. Because regardless of trade war concerns or a recession, the holdings in this real estate investment trust (REIT) ETF mainly focus on infrastructure that’s essential to the daily operations of our technologically connected world.
And much of this infrastructure is based in the U.S., dodging the influence of trade war peril.
Consider top holding Crown Castle (NYSE:CCI) as example of this dual strength. According to Yahoo Fiance’s description for CCI: “Crown Castle owns, operates and leases more than 40,000 cell towers and approximately 75,000 route miles of fiber supporting small cells and fiber solutions across every major U.S. market.” This is a U.S.-based holding that will be at the forefront of the inevitable 5G future, which will be the catalyst for countless other technological advancements. And SRVR is packed with holdings with similar attributes to CCI.
Ultimately, SRVR should remain a strong contender among the best ETFs this year. And it will likely be one of the best ETFs to buy for years to come, as the 5G catalyst, which many of its holdings stand to benefit from, is only getting heated up.
The SRVR ETF has an expense ratio of 0.6%, or $60 annually per $10,000 invested.
Robert Waldo is an assistant editor at InvestorPlace. As of this writing, he did not hold a position in any of the aforementioned securities.