THE fifth generation (5G) aims to reduce latency and increase download speeds as it uses a higher frequency band versus the 4G technology, resulting in faster transmission of data. Thus, 5G networks are the perfect backbone for Internet of Things (IoT).
Despite the COVID-19 pandemic, the global 5G network deployment has accelerated in 2020. In fact, the deployment of 5G started in some locations in 2019. Driven by stronger demand and better connectivity, 5G trends will enter an accelerated growth phase in 2021.
To-recap, countries like China, the US, South Korea and Germany have joined the UK by spending billions since 2015 to get the 5G infrastructure in place. Based on Ericsson’s Mobility Report for 4Q 2019, there were more than 13 million 5G subscriptions globally at end-2019, signalling the start of a new era.
According to Allied Market Research, the global 5G market is projected to reach US$668 bil by 2026, implying compound annual growth (CAGR) of 122%. In addition, IHS Markit’s report in 2018 stated that 5G will enable US$12.3 tril of global economic output.
McKinsey stated that 5G will likely speed up the mainstream adoption of the IoT across multiple industries. 5G is the future and its prospect is undeniable which is why business, industries and even fund manager are adopting the usage of 5G.
Principal Asset Management Bhd is the latest to jump onto the 5g bandwagon with the unveiling of its Principal Next-G Connectivity Fund to the market yesterday.
This new fund aims to help investors achieve capital appreciation through exposure in portfolio of global equity holdings, focusing on companies that are involved or derive benefit from next generation connectivity. The fund will be initially distributed exclusively through Standard Chartered Bank branches nationwide.
“I believe technology will continue to be a dominant and central theme in the market. Globally, connectivity in technology has allowed approximately six billion people to connect with one another,” Principal Asset Management CEO Munirah Khairuddin pointed out.
“With the rise of 5G networks and the IoT, we are looking at exponential growth potential.”
The fund will invest at least 95% of its net asset value in a portfolio of best-in-class companies with sustainable advantages around the world, and which have at least 50% of their future earnings growth driven by 5G.
Key enablers and beneficiaries in 5G network infrastructure, IoT devices, and applications and services will be in focus. Leveraging on the strong industry expertise of Neuberger Berman Europe Ltd, the Fund seeks to identify hidden gems of 5G using a research-intensive, bottom-up approach.
Investors who seek medium to long-term capital appreciation would be able to benefit through this fund, in line with the progress in the technology sector.
Munirah noted that Principal Asset Management is committed to leading the way for consumers to achieve their financial goals through a Fund that provides the potential for long-term gains.”
Principal Asset Management Bhd established in 1994 is a joint venture between Principal Financial Group (a member of the FORTUNE 500 and a Nasdaq-listed global financial services) and CIMB Group Holdings Bhd. – Jan 20, 2021
