New Technology Focused ETF Playing in the Cloud

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. 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.

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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. (NASDAQ:ARUN) 3.78 %
TIBCO Software Inc. (NASDAQ:TIBX) 3.77 %
Teradata Corporation (NYSE:TDC) 3.67 %, Inc. (NASDAQ:AMZN) 3.62 %
Informatica Corporation (NASDAQ:INFA) 3.54 %
Netflix Inc. (NASDAQ:NFLX) 3.53 %
Blackboard Inc. (NASDAQ:BBBB) 3.49 %, Inc. (NYSE:CRM) 3.47 %
NetApp Inc. (NASDAQ:NTAP) 3.47 %
Open Text Corporation (NASDAQ:OTEX) 3.47 %
Rackspace Hosting, Inc. (NYSE:RAX) 3.46 %
Acme Packet, Inc. (NASDAQ:APKT) 3.46 %
VMware, Inc. (NYSE:VMW) 3.43 %
F5 Networks, Inc. (NASDAQ:FFIV) 3.40 %
Oracle Corporation (NASDAQ:ORCL) 3.35 %
Equinix, Inc. (NASDAQ:EQIX) 3.35 %
EMC Corporation (NYSE:EMC) 3.34 %
Akamai Technologies, Inc. (NASDAQ:AKAM) 3.34 %
Rightnow Technologies, Inc. (NASDAQ:RNOW) 3.31 %
Cisco Systems, Inc. (NASDAQ:CSCO) 3.27 %
Google Inc. (NASDAQ:GOOG) 3.27 %
Juniper Networks, Inc. (NYSE:JNPR) 3.26 %
SAP AG (ADR) (NYSE:SAP) 3.22 %
Microsoft Corporation (NASDAQ:MSFT) 2.54 %
International Business Machines Corporation (NYSE:IBM) 2.49 %
Apple Inc. (NASDAQ:AAPL) 2.46 %
Hewlett-Packard Company (NYSE:HPQ) 2.39 %

This is a guest post by Trader Mark who publishes the blog Fund My Mutual Fund.

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