A 5G-themed ETF is the latest to try and tap into a hot trend, even as scores of thematic funds ‘flame out’

The first exchange traded fund to invest in 5G - the next generation of wireless technology - launched Tuesday.

5G - the next generation of wireless technology - is set to supercharge smartphones and underpin innovations, including self-driving cars., Defiance, a startup exchange traded fund provider, is betting that the businesses related to 5G will take off as the technology evolves. On Tuesday, the New York-based company launched the Defiance Next Gen Connectivity ETF, which trades on the New York Stock Exchange as FIVG, the first ETF to invest specifically in 5G.

"For some investors, thematic ETFs have taken the place of stocks that offer long-term growth potential," Todd Rosenbluth, the head of ETF and mutual fund research for CFRA, told Business Insider."Investors benefit from the diversification at the security level but can play the broader theme.

Defiance's 5G fund goes beyond the major telecommunications companies, such as Verizon and AT&T, to invest in 5G's supply chain. Half of its holdings are in companies that provide core equipment, such as routers and antennas. It also invests in real estate investment trusts, which own cellular towers, and enhanced mobile broadband companies, among other parts of the 5G ecosystem. No company accounts for more than 5% of the ETF's holdings.

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