Document Type

Article

Publication Date

8-11-2025

Comments

This article is the author’s final published version in Journal of Risk and Financial Management, Volume 18, Issue 8, 2025, Article number 449.

The published version is available at https://doi.org/10.3390/jrfm18080449. Copyright © 2025 by the authors.

Abstract

This study evaluates the performance of U.S. data center Exchange-Traded Funds (ETFs) relative to major equity and technology benchmarks, using monthly returns from January 2000 through December 2024, with particular emphasis on the COVID-19 period and the subsequent post-vaccine era. Data center ETFs have not provided better risk-adjusted returns even though they are often advertised as access points to the digital economy. Digital infrastructure demand increased through the pandemic but did not improve the performance of these funds which stayed weak across both traditional and conditional multi-factor asset pricing models. These ETFs struggle with asset selection and market timing proficiency, which leads to relatively poor performance results during volatile market conditions. The downside risks linked to these funds tend to match or exceed the downside risks of broader indices like the S&P 1500 Information Technology Index. Although these investments are based on strong thematic narratives, they do not achieve returns that align with investor expectations.

Creative Commons License

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 License.

Language

English

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