MW Here's an easy way to expand your AI investment exposure
By Philip van Doorn
No matter which hyperscalers make the best use of artificial intelligence, you as an investor can benefit from a focus on data connectivity
These are three of the top holdings of the Defiance Connective Technologies ETF.
Since early 2023, Nvidia has been the most obvious play on generative artificial intelligence because it has dominated the market for graphics processing units being installed by data centers. This spending has been funded by the hyperscalers, including Microsoft, Alphabet, Amazon and Meta, which are on different paths toward achieving AI-driven profits.
But investors might choose to focus on another aspect of the AI build-out - communications and data-transmission capacity.
Sylvia Jablonski, the chief investment officer at Defiance ETFs, explained how the Defiance Connective Technologies ETF SIXG had expanded its approach to tracking what might be the broadest AI-driven trend. This exchange-traded fund was formerly called the Defiance Next Gen Connectivity ETF, and its former ticker symbol was "FIVG." It was renamed in July 2024.
As SIXG, it holds 60 stocks to track the BlueStar Connective Technologies Index, which is maintained by MarketVector. The index is designed to include companies involved with the continuing rollout of 5G networks, the development of 6G and other data-transmission technology. The holdings include manufacturers of semiconductors used to handle AI data and companies involved with launching satellites and managing orbital communications.
Jablonski told MarketWatch that SIXG and its underlying index were continuing to evolve, most recently with the addition of space-related names to the fund.
'[T]he demand for AI, energy and infrastructure is so high, and supply is so low, that the runway is untapped.'Sylvia Jablonski, Defiance ETFs
SIXG had returned 29.4% for 2026 through Friday. All returns in this article include reinvested dividends and for funds are net of expenses.
Jablonski credited AI with the fund's strong performance, and it is worth noting that, for the same period, Nvidia's (NVDA) stock returned 11.7%.
Jablonski said the timing was right for the fund's strategy. "All of these disruptive themes depend on low latency, moving data and the speed of moving data," she said. This includes semiconductors needed for connectivity, she said, but also encompasses traditional telecommunications hardware makers and service providers, along with real-estate investment trusts that own communications facilities and equipment.
She said that the fund was investing in "beta growth names," which means more speculative growth-oriented companies whose stocks might be volatile, but that it "has a good mix, with companies that have strong cash positions and balance sheets, such as Nvidia, Oracle $(ORCL)$ and Broadcom $(AVGO)$.
"This mix and the demand for AI, energy and infrastructure is so high, and supply is so low, that the runway is untapped," she said.
Top holdings of SIXG
The Defiance Connective Technologies ETF follows a modified weighting strategy. Its underlying index is weighted by market capitalization, with caps of 5% on individual stock holdings and 1.5% for real-estate investment trusts and mobile network operators when it is rebalanced every March and September.
The index is also separated into two tiers, so that 80% of the portfolio is made up of companies involved with connective technology and 20% dedicated to companies involved with the space industry or satellite communications.
One interesting aspect of SIXG is that its portfolio has a weighted forward price/earnings ratio of 24. That is relatively low, considering the fund's industry allocations, when compared with a weighted forward P/E of 20.8 for the S&P 500 SPX. A stock's forward P/E is its price divided by the consensus 12-month earnings-per-share estimate among analysts polled by LSEG.
These are the largest 15 holdings of the Defiance Connective Technologies ETF:
Company name % of SIXG portfolio Broadcom 5.15% Nvidia 4.66% Rocket Lab 4.61% Apple 4.33% Maxlinear 3.67% AST SpaceMobile 3.61% Cisco Systems 3.06% Oracle 2.90% Marvell Technology 2.53% Arista Networks 2.36% EchoStar 2.36% Arm Holdings 2.20% Planet Labs 2.17% Qualcomm 1.94% Credo Technology 1.92% Source: Defiance ETFs
Click on the ticker symbols for more about any company, ETF or index in this article.
Read: Tomi Kilgore's detailed guide to the information available on the MarketWatch quote page
Expenses and peer performance
The Defiance Connective Technologies ETF (under its former name) was launched in March 2019. It has annual expenses of 0.30% of assets under management, which Jablonski said was very low for a thematic ETF. That makes for $30 in annual fees on a $10,000 investment.
LSEG lists competing exchange-traded funds with annualized returns calculated through the most recent month end. For SIXG, there were 12 peer funds listed that had been launched at least three years earlier. Here they are, with SIXG listed first and then all of the others, sorted by three-year average annual returns:
Asset name 3-year avg. return 5-year avg. return 10-year avg. return Expense ratio Defiance Connective Technologies ETF 28.8% 15.5% N/A 0.30% State Street SPDR S&P Telecom ETF 33.6% 16.1% 14.0% 0.35% State Street Communication Services Select Sector SPDR ETF 25.5% 9.7% N/A 0.08% Fidelity MSCI Communication Services Index ETF 24.2% 7.7% 10.6% 0.08% iShares Global Comm Services ETF 23.8% 9.4% 8.8% 0.40% iShares U.S. Telecommunications ETF 21.9% 6.3% 5.0% 0.38% Fidelity Disruptive Communications ETF 21.8% 7.1% N/A 0.50% First Trust Indxx NextG ETF 19.3% 11.1% 13.3% 0.70% First Trust S-Network Streaming & Gaming ETF 13.7% N/A N/A 0.70% Invesco S&P 500 Equal Weight Communication Services ETF 12.3% 1.4% N/A 0.40% iShares U.S. Digital Infrastructure and Real Estate ETF 12.3% 8.7% 11.1% 0.39% Global X Video Games & Esports ETF 9.2% -3.1% N/A 0.50% Source: LSEG
SIXG has been the second-best performer among these ETFs for the three- and five-year periods.
The State Street SPDR S&P Telecom ETF XTL has been the best performer for all three periods. It tracks the S&P Telecom Select Industry Index, which is a subset of the S&P Total Market Index.
The third-best performer on the list for the three-year period has been the State Street Communication Services Select Sector SPDR ETF XLC, which tracks the S&P 500 telecommunications sector XX:SP500.50.
Don't miss: Apple will soon deliver billions more in cash to investors. Here's how it stacks up to the rest of Big Tech.
-Philip van Doorn
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 27, 2026 11:21 ET (15:21 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments