Wednesday, July 6, 2011

First Trust Launches Cloud Computing ETF (SKYY)

It is always interesting to see if new ETFs, in a very highly saturated marketplace, catch any attention or more importantly a sizable amount of assets.  First Trust is trying to catch the cloud computing angle, with a new ETF: First Trust ISE Cloud Computing Index Fund (SKYY).  As long time readers know, a lot of companies we've been interested have seen a premium attached to them over the past 24 months or so once they become 'cloud' plays.  [Feb 11, 2010: WSJ - What the Heck is this Cloud Computing Thing?]  But they do tend to move in a group once heralded as a 'cloud' company.  More importantly, one wonders in a market with ADD if cloud matters anymore, as the lemmings have moved on to 'social media' as the new hot thing.

Anyhow here is a link to the ETF's webpage, and some description below.  Looks to be 40 companies, with no one-two positions dominating the holdings as many top heavy ETFs have.  A 0.6% expense ratio. I also have a video below with one of the salesmen from First Trust on the launch and product.

  • The index is a modified equal dollar weighted index designed to track the performance of companies actively involved in the cloud computing industry. To be included in the index, a security must be engaged in a business activity supporting or utilizing the cloud computing space, listed on an index-eligible global stock exchange and have a market capitalization of at least $100 million.

  • All securities are then classified according to the following three business segments:
    • Pure Play Cloud Computing Companies: Companies that are direct service providers for “the cloud” (network hardware/software, storage, cloud computing services) or companies that deliver goods and services that utilize cloud computing technology.
    • Non Pure Play Cloud Computing Companies: Companies that focus outside the cloud computing space but provide goods and services in support of the cloud computing space.
    • Technology Conglomerate Cloud Computing Companies: Large broad-based companies that indirectly utilize or support the use of cloud computing technology. 
    Here are the positions over 1% exposure.
    Aruba Networks, Inc. ARUN 3.78 %
    TIBCO Software Inc. TIBX 3.77 %
    Teradata Corporation TDC 3.67 %, Inc. AMZN 3.62 %
    Informatica Corporation INFA 3.54 %
    Netflix Inc. NFLX 3.53 %
    Blackboard Inc. BBBB 3.49 %, Inc. CRM 3.47 %
    NetApp Inc. NTAP 3.47 %
    Open Text Corporation OTEX 3.47 %
    Rackspace Hosting, Inc. RAX 3.46 %
    Acme Packet, Inc. APKT 3.46 %
    VMware, Inc. VMW 3.43 %
    F5 Networks, Inc. FFIV 3.40 %
    Oracle Corporation ORCL 3.35 %
    Equinix, Inc. EQIX 3.35 %
    EMC Corporation EMC 3.34 %
    Akamai Technologies, Inc. AKAM 3.34 %
    Rightnow Technologies, Inc. RNOW 3.31 %
    Cisco Systems, Inc. CSCO 3.27 %
    Google Inc. GOOG 3.27 %
    Juniper Networks, Inc. JNPR 3.26 %
    SAP AG (ADR) SAP 3.22 %
    Microsoft Corporation MSFT 2.54 %
    International Business Machines Corporation IBM 2.49 %
    Apple Inc. AAPL 2.46 %
    Hewlett-Packard Company HPQ 2.39 %

    4 minute video

    No position

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