Shares of Netflix (NasdaqGS: NFLX) are soaring almost 7% Monday after the provider of streaming entertainment content unveiled a deal for a new original series with DreamWorks Animation (NYSE: DWA). Netflix said the deal is the largest for original content in the company’s history with a 300 hours of fresh content expected.
The deal for Netflix comes on the heels of the success of “House of Cards,” the company’s flagship original series, and at a time when the company needs to fill a void in its animated programming. Less than a month, ago Netflix let its content agreement with media giant Viacom (NYSE: VIA) expire and that deal included popular animated series such as “Dora The Explorer” and “SpongeBob SquarePants,” reports Rex Crum for MarketWatch.
News of the Netflix/DreamWorks agreement is benefiting one ETF and it is a fund that some investors may not think features the largest allocation the stock. The First Trust ISE Cloud Computing Index Fund (NasdaqGM: SKYY) is up 2.1% on the Netflix news. While Netflix fits the bill as a “hot” or “story” stock, it is does not command a large presence in the ETF world. [Netflix Sell Off Weighs on Internet ETFs]
Despite the fact that Netflix usually is not the first stock investors associate with cloud computing, SKYY is the ETF with the largest weight to the stock at almost 6.6%. That makes Netflix SKYY’s second-largest holding behind Oracle (NasdaqGS: ORCL), according to First Trust data.
Cloud computing refers to the delivery of a service instead of an actual physical product to the consumer, utilizing a network (such as the Internet) to transfer software, information, and other shared resources. [Chart of the Day: Cloud Computing ETF]
When SKYY debuted nearly two years ago, some critics assailed the fund for being too much of a niche concept to appeal to investors. However, the ETF has attracted almost $94 milion in assets under management and has posted gains of 15% in the past 12 months.
Obviously, Netflix is a recognizable stock and one that makes it easy for investors to pay some attention to SKYY every now and then. However, the ETF could offer some long-term growth as spending on public cloud services is expected to jump to $210 billion by 2016 from less than $80 billion in 2010, reports Louis Columbus for Forbes.
First Trust ISE Cloud Computing Index Fund
ETF Trends editorial team contributed to this post.