Alternative Investments/Real Estate: The Global X Data Center REITs & Digital Infrastructure ETF (VPN)

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Global X ETFs launched the new ETF for investors seeking real estate exposure such as data centers and cellular towers.

“The common denominator for game-changing technologies like 5G, the Internet of Things, and artificial intelligence is the physical digital infrastructure that enables the seamless transfer, computation, and storage of data,” says Global X. “With surging demand and physical capacity constraints, data centers and cellular towers are real estate assets that could offer investors the potential for both growth and income generation.” (Intrado GlobeNewsWire)

Data and internet connectivity driving demand for specialized real estate

Sophisticated AI, the new 5G networks, the rise and rise of cloud, and innumerable IoT devices are all helping to stoke demand for digital infrastructure.

The Global X Data Center REITs & Digital Infrastructure ETF (NASDAQ: VPN) seeks to address this impactful and disruptive trend.

There is also a likelihood of strong growth because of the changing economic landscape due to the pandemic.

Global X says: “Accelerated by the COVID-19 pandemic, consumers are increasingly opting to shop online, work from home, and socialize via video and gaming apps. These changing patterns are shifting real estate demand from large public areas and towards our private residences. Occurring in parallel with this shift is increasing demand for the digital infrastructure that powers this remote connectivity.”

VPN can therefore be best be described as an ETF that focuses on REITs with a technological skew.

The ETF is listed on the Nasdaq and charges 0.50% annually. It tracks the Solactive Data Center REITs & Digital Infrastructure Index.

As of October 31, the ETF’s holding sectors were as follows:

  • Real estate – 66.6%
  • IT – 25.4%
  • Communication Services – 7%
  • Other / Cash – 1%

According to Global X, the ETF is relevant during the current environment of near-zero interest rates amidst a depressing economic scenario.

It offers meaningful yield and scope for upside for those investors looking for a substitute for fixed income.

Related Story: New Global Real Estate ETF From Cambria

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