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Cloud Computing ETF Debuts

Today Global X added another ETF to its growing thematic ETF lineup—this one focuses on cloud computing technology. The Global X Cloud Computing ETF (CLOU) targets companies that are likely to benefit from the growing adoption and proliferation of cloud computing technology.

The fund charges an expense ratio of 0.68% and lists on the Nasdaq stock exchange.

Companies included in the index must have a cloud computing-connected primary business based on the provision of software, platform services or infrastructure via the cloud-based subscription; providing server storage space and data centers as a real estate investment trust; or providing software and hardware that supports cloud computing.

Eligibility

Generally to be eligible, a company must generate at least half of their revenue from these activities, but companies that generate at least $500 million in revenue from the provision of public cloud infrastructure can also be included in the index with a 2% weighting cap, the prospectus says.

The underlying index draws its components from nearly 50 countries. Companies must meet minimum size and liquidity requirements, and are ultimately weighted in the index based on modified market capitalization, with rebalancing and reconstitutions scheduled every six months. The index included 36 securities as of the start of March, according to the document.

The largest U.S.-listed ETF targeting cloud computing specifically is the First Trust Cloud Computing ETF (SKYY), which launched in 2011 and has $2.2 billion in assets under management. However, SKYY comes with an expense ratio of just 0.60%.

Contact Heather Bell at [email protected]

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