The Global X Cloud Computing ETF (CLOU) was launched on 04/12/2019, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Cloud Computing segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options 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 8, placing it in top 50%.
Index Details
The fund is sponsored by Global X Management. It has amassed assets over $342.37 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
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
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 5.84% of total assets, followed by Digital Realty Trust Inc (DLR) and Sps Commerce Inc (SPSC).
The top 10 holdings account for about 44.60% of total assets under management.
Performance and Risk
The ETF has lost about -11.74% and is up roughly 2.41% so far this year and in the past one year (as of 09/18/2024), respectively. CLOU has traded between $17.46 and $23.47 during this last 52-week period.
The ETF has a beta of 1.04 and standard deviation of 31.71% for the trailing three-year period. With about 37 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 $402.61 million in assets, First Trust Cloud Computing ETF has $2.91 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.
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Get it free >>Global X Cloud Computing ETF (CLOU): ETF Research Reports
Digital Realty Trust, Inc. (DLR) : Free Stock Analysis Report
SPS Commerce, Inc. (SPSC) : 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.
