Should You Invest in the WisdomTree Cloud Computing ETF (WCLD)?
The WisdomTree Cloud Computing ETF (WCLD) was launched on 09/06/2019, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Cloud Computing segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 5, placing it in top 31%.
Index Details
The fund is sponsored by Wisdomtree. It has amassed assets over $593.95 million, making it one of the larger ETFs attempting to match the performance of the Technology - Cloud Computing segment of the equity market. WCLD seeks to match the performance of the BVP NASDAQ EMERGING CLOUD INDEX before fees and expenses.
The BVP Nasdaq Emerging Cloud Index is an equally weighted Index, designed to measure the performance of emerging public companies focused on delivering cloud-based software to customers.
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 0.45%, making it one of the cheaper products in the space.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 86.60% of the portfolio. Financials and Telecom round out the top three.
Looking at individual holdings, Elastic Nv (ESTC) accounts for about 1.91% of total assets, followed by Zscaler Inc (ZS) and Crowdstrike Holdings Inc - A (CRWD).
The top 10 holdings account for about 17.07% of total assets under management.
Performance and Risk
So far this year, WCLD has added about 13.84%, and it's up approximately 14.34% in the last one year (as of 11/06/2023). During this past 52-week period, the fund has traded between $22.93 and $34.49.
The ETF has a beta of 1.10 and standard deviation of 41.56% for the trailing three-year period. With about 71 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree 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, WCLD is a great 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.
Global X Cloud Computing ETF (CLOU) tracks INDXX GLOBAL CLOUD COMPUTING INDEX and the First Trust Cloud Computing ETF (SKYY) tracks ISE Cloud Computing Index. Global X Cloud Computing ETF has $502.16 million in assets, First Trust Cloud Computing ETF has $2.49 billion. CLOU has an expense ratio of 0.68% 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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Free: See Our Top Stock and 4 Runners Up >>WisdomTree Cloud Computing ETF (WCLD): ETF Research Reports
First Trust Cloud Computing ETF (SKYY): ETF Research Reports
Zscaler, Inc. (ZS) : Free Stock Analysis Report
Elastic N.V. (ESTC) : Free Stock Analysis Report
Global X Cloud Computing ETF (CLOU): ETF Research Reports
CrowdStrike (CRWD) : Free Stock Analysis Report
