Cloud ETF Faces Earnings Tests

The First Trust ISE Cloud Computing Index Fund (NasdaqGM: SKYY) entered Monday with a year-to-date gain of more than 9%, one of the more impressive performances among technology industry exchange traded funds. However, SKYY will be put to the test by a spate of upcoming earnings reports from cloud companies.

Cloud computing refers to a mode of accessing digital information from the internet through web-based tools and applications, instead of directly connecting to a server. The desired data and software packages are stored in servers where a consumer can access them anywhere as long as one has access to the Internet.

SKYY tracks the ISE Cloud Computing Index, which “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,” according to First Trust.

Earnings Tests for Cloud Investors

Some of cloud stocks investors should monitor include the groups marquee names as well as some mid-tier players.

“ (CRM) and Workday (WDAY) are the big dogs in this market, with market capitalizations of $89 billion and $25 billion, respectively, and years of operating as public companies under their belts,” reports Tiernan Ray for Barron’s.

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