Designed to provide broad exposure to the Technology - Cloud Computing segment of the equity market, the Global X Cloud Computing ETF (CLOU) is a passively managed exchange traded fund launched on 04/12/2019.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Cloud Computing is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 6, placing it in top 38%.
Index Details
The fund is sponsored by Global X Management. It has amassed assets over $416.78 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Cloud Computing segment of the equity market. CLOU seeks to match the performance of the INDXX GLOBAL CLOUD COMPUTING INDEX before fees and expenses.
The Indxx Global Cloud Computing Index provides exposure to exchange-listed companies in developed and emerging markets that are positioned to benefit from the increased adoption of cloud computing technology.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.68%, making it on par with most peer products in the space.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Wix.com Ltd (WIX) accounts for about 6.04% of total assets, followed by C3.ai Inc-A (AI) and Digital Realty Trust Inc (DLR).
The top 10 holdings account for about 43.78% of total assets under management.
Performance and Risk
So far this year, CLOU has lost about -11.21%, and is down about -2.85% in the last one year (as of 07/16/2024). During this past 52-week period, the fund has traded between $17.46 and $23.47.
The ETF has a beta of 1.04 and standard deviation of 31.37% for the trailing three-year period. With about 38 holdings, it has more concentrated exposure than peers.
Alternatives
Global X Cloud Computing ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, CLOU is an outstanding option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
WisdomTree Cloud Computing ETF (WCLD) tracks BVP NASDAQ EMERGING CLOUD INDEX and the First Trust Cloud Computing ETF (SKYY) tracks ISE Cloud Computing Index. WisdomTree Cloud Computing ETF has $473.16 million in assets, First Trust Cloud Computing ETF has $2.99 billion. WCLD has an expense ratio of 0.45% and SKYY charges 0.60%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Global X Cloud Computing ETF (CLOU): ETF Research Reports
Digital Realty Trust, Inc. (DLR) : Free Stock Analysis Report
C3.ai, Inc. (AI) : Free Stock Analysis Report
Wix.com Ltd. (WIX) : Free Stock Analysis Report
First Trust Cloud Computing ETF (SKYY): ETF Research Reports
WisdomTree Cloud Computing ETF (WCLD): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
