6 Cloud ETFs that are delivering outstanding returns

Cloud ETFs

Cloud computing is the concept of borrowing computing power from data centers and paying a monthly bill like a utility service. There are many advantages to this business model both for the clients and the cloud providers. The move to the cloud has been the number one priority for most of the organizations including the government. To benefit from this explosion of the market, Cloud ETFs were created where investors can invest in a basket of cloud companies. ETFs are part of a passive investment strategy.

Advantages for Organizations moving to the cloud

The advantage for the organizations is they can now have a lean IT force on ground and offshore all the infrastructure maintenance and data center responsibilities to the cloud providers. No more waiting around for approvals to purchase servers, personnel to employ to maintain them. Backup strategies so their data remains secure in case of outages etc. For startups, this is a real blessing because they now do not have to worry about having their servers and networking. At the click of a button, they borrow resources and can focus on their core business idea.

Advantages for the cloud providers

For the cloud providers, the advantage is the economies of scale. Multiple organizations share space on the servers and databases. Using the advances in data center technology, they can keep the operating costs down and lock the clients for the long term. 

Performance of the Cloud ETFs

This trend has caused the stocks of the cloud providers to heat up. All the Cloud ETFs have had a great performance in the past year. The following is the comparison of the Cloud ETFs.

CLOU (Global X Cloud Computing ETF)

Assets Under Management: $1.087B
Expense Ratio: 0.68%
Price / Earnings Ratio: -334.13
Price / Book Ratio: 11.37
Number of Holdings: 37
Total Top 10 Weighting: 49.82%

1. Twilio, Inc. Class A
2. Zoom Video Communications, Inc. Class A
3. Zscaler, Inc.
4. Coupa Software, Inc.
5. Shopify, Inc. Class A
6. Salesforce.com, Inc
7. Anaplan, Inc.
8. Xero Limited
9. Workday, Inc. Class A
10. Netflix, Inc.

ARKW (ARK Next Generation Internet ETF)

Assets Under Management: $2.22B
Expense Ratio: 0.76%
Price / Earnings Ratio: -170.57
Price / Book Ratio: 8.59
Number of Holdings: 54
Total Top 10 Weighting: 43.71%

1. Tesla Inc.
2. Square, Inc. Class A
3. Roku, Inc. Class A
4. HUYA, Inc. Sponsored ADR Class A
5. Facebook, Inc. Class A
6. Sea Ltd. (Singapore) Sponsored ADR Class A
7. 2U, Inc.
8. Spotify Technology SA
9. Zillow Group, Inc. Class C
10. Xilinx, Inc.

DTEC (ALPS Disruptive Technologies ETF)

Assets Under Management: $109.38M
Expense Ratio: 0.50%
Price / Earnings Ratio: 45.55
Price / Book Ratio: 5.35
Number of Holdings: 101
Total Top 10 Weighting: 13.17%

1. Square, Inc. Class A
2. Siemens Gamesa Renewable Energy, S.A
3. First Solar, Inc.
4. Salesforce.com, Inc.
5. Spotify Technology SA
6. SolarEdge Technologies, Inc.
7. Vestas Wind Systems A/S
8. StoneCo Ltd. Class A
9. ADT, Inc.
10. Tecan Group AG

IVES (Wedbush ETFMG Global Cloud Technology ETF)

Assets Under Management: $46.18M
Expense Ratio: 0.68%
Price / Earnings Ratio: 640.39
Price / Book Ratio: 6.64
Number of Holdings: 57
Total Top 10 Weighting: 41.87%

1. Elastic NV
2. GDS Holdings Ltd. Sponsored ADR Class A
3. Kingsoft Cloud Holdings Ltd Sponsored ADR
4. NICE Ltd
5. Coupa Software, Inc.
6. Open Text Corporation
7. Itochu Techno-Solutions Corporation
8. SCSK Corporation
9. Sinch AB
10. MongoDB, Inc. Class A

SKYY (First Trust Cloud Computing ETF)

Assets Under Management: $4.96B
Expense Ratio: 0.60%
Price / Earnings Ratio: 79.22
Price / Book Ratio: 6.48
Number of Holdings: 65
Total Top 10 Weighting: 36.92%

1. Amazon.com, Inc.
2. Alibaba Group Holding Ltd. Sponsored ADR
3. Microsoft Corporation
4. Alphabet Inc. Class A
5. Oracle Corporation
6. Fastly, Inc. Class A
7. CenturyLink, Inc.
8. VMware, Inc. Class A
9. MongoDB, Inc. Class A
10. Arista Networks, Inc.

WCLD (WisdomTree Cloud Computing Fund)

Assets Under Management: $638.30M
Expense Ratio: 0.45%
Price / Earnings Ratio: -73.42
Price / Book Ratio: 19.59
Number of Holdings: 55
Total Top 10 Weighting: 19.73%

1. Salesforce.com, Inc.
2. Anaplan, Inc.
3. Zuora, Inc. Class A
4. Adobe Inc.
5. Workday, Inc. Class A
6. Atlassian Corp. Plc Class A
7. Coupa Software, Inc.
8. ServiceNow, Inc.
9. Smartsheet, Inc. Class A
10. New Relic, Inc.