The choice to kill off FONE comes after the fund failed to attract more than $13 million in assets after more than 8 years. FONE was widely criticised for its poor tracking, 0.70% fee, wide spreads and concentration in semiconductor producers.
The First Trust Indxx NextG ETF (NXTG) will aim to invest in companies that research and develop the next wave of cellular technology.
Subject to basic size and liquidity requirements, NXTG will invest in companies exposed to 5G in two ways: those producing the infrastructure and hardware, which will get 80% of the index weight; and telecoms companies, which will get 20%.
Infrastructure and hardware companies are mostly REITs, but also software companies and mobile phone manufacturers. Telecomms companies are those that give access to 5G networks.
Securities in the index are equally weighted. The fund charges 0.70%.