Launched on 09/06/2019, the WisdomTree Cloud Computing ETF (WCLD) is a smart beta exchange traded fund offering broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
WCLD is managed by Wisdomtree, and this fund has amassed over $491.80 million, which makes it one of the average sized ETFs in the Technology ETFs. This particular fund 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.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.45% for WCLD, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
WCLD's heaviest allocation is in the Information Technology sector, which is about 86.80% of the portfolio. Its Financials and Telecom round out the top three.
When you look at individual holdings, Twilio Inc - A (TWLO) accounts for about 2.34% of the fund's total assets, followed by Bill Holdings Inc (BILL) and Atlassian Corp -Class A (TEAM).
The top 10 holdings account for about 20.11% of total assets under management.
Performance and Risk
The ETF has added roughly 8.16% so far this year and is up about 17.28% in the last one year (as of 02/03/2025). In the past 52-week period, it has traded between $28.88 and $41.58.
The ETF has a beta of 1.14 and standard deviation of 38.39% for the trailing three-year period. With about 65 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Cloud Computing ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which 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 $372.41 million in assets, First Trust Cloud Computing ETF has $3.91 billion. CLOU has an expense ratio of 0.68% and SKYY charges 0.60%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs.
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 >>WisdomTree Cloud Computing ETF (WCLD): ETF Research Reports
Atlassian Corporation PLC (TEAM) : Free Stock Analysis Report
Twilio Inc. (TWLO) : Free Stock Analysis Report
First Trust Cloud Computing ETF (SKYY): ETF Research Reports
Global X Cloud Computing ETF (CLOU): ETF Research Reports
BILL Holdings, Inc. (BILL) : Free Stock Analysis Report
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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.
