Neuberger Berman Next Generation Connectivity Fund: A High-Yield Play on the 5G Revolution

The 5G and next-generation connectivity sector is poised to redefine global infrastructure, with the potential to unlock $13.1 trillion in economic value by 2030 [1]. For income-focused investors, the Neuberger Berman Next Generation Connectivity Fund (NBXG) offers a compelling closed-end fund (CEF) vehicle to capitalize on this megatrend while generating a robust monthly yield. With a forward dividend yield of 8.10% as of August 2025 [3], NBXG stands out in a market where traditional fixed-income assets struggle to keep pace with inflation.

Strategic Alignment with 5G Growth

NBXG’s investment thesis is built on a narrow but high-conviction focus: companies whose future earnings growth is driven by 5G enablement or adoption. The fund’s portfolio typically holds 40–60 stocks, emphasizing network infrastructure, IoT devices, and applications [4]. While specific 5G sector allocations for 2025 are not disclosed, the fund’s top holdings—such as Meta Platforms Inc. and Amazon.com Inc.—reflect exposure to firms leveraging 5G for cloud computing, edge computing, and AI-driven services [1]. The Information Technology sector alone accounts for 37.5% of the portfolio, underscoring its alignment with the technological backbone of next-gen connectivity [2].

Dividend Sustainability and Cost Efficiency

NBXG’s dividend consistency is a cornerstone of its appeal. Over the past five years, it has maintained a monthly payout of $0.10 per share, translating to an annualized $1.20 dividend [4]. This track record, combined with a trailing 12-month yield of 8.1% [2], suggests a resilient income stream. The fund’s expense ratio of 1.37% [3] is notably low for an actively managed CEF, reducing drag on returns and enhancing net yield.

Risk Considerations and Portfolio Context

While NBXG’s high yield is attractive, its non-diversified structure and sector concentration pose risks. The Communication Services sector, at 27.0% of holdings [2], is vulnerable to regulatory shifts or technological obsolescence. Additionally, the fund’s 13.4% allocation to private or restricted stocks [2] introduces liquidity constraints. Investors should view NBXG as a satellite holding in a diversified portfolio, complementing broader equity or bond allocations.

Conclusion

For investors seeking a high-yield, actively managed exposure to the 5G revolution, NBXG offers a unique combination of thematic focus, cost efficiency, and dividend consistency. However, its niche strategy demands careful due diligence. The fund’s ability to sustain its 8.10% yield will depend on the continued adoption of 5G infrastructure and the performance of its concentrated holdings. Those willing to accept sector-specific risk may find NBXG a compelling addition to their income portfolios.

Source:
[1] Neuberger Berman Next Generation Connectivity Fund, https://www.nb.com/en/us/products/closed-end-funds/neuberger-berman-next-generation-connectivity-fund
[2] NBXG Still Looks Like A Good Way To Get Technology Exposure, https://seekingalpha.com/article/4790055-nbxg-still-looks-like-a-good-way-to-get-technology-exposure
[3] NBXG Dividend Information, https://stockanalysis.com/stocks/nbxg/dividend/
[4] Neuberger Berman Dividend Update: Insights for Investors, https://www.ainvest.com/news/neuberger-berman-dividend-update-insights-investors-aug-15-2025-2508/