Cloud computing ETFs are delivering stellar returns and one of the best breeds is also one of the group’s newest additions – the WisdomTree Cloud Computing ETF (WCLD).
The WisdomTree Cloud Computing Fund seeks to track the price and yield performance, before fees and expenses, of the BVP Nasdaq Emerging Cloud Index, an equally weighted index designed to measure the performance of emerging public companies focused on delivering cloud-based software to customers.
The cloud computing industry refers to companies that (i) license and deliver software over the internet on a subscription basis (SaaS), (ii) provide a platform for creating software applications which are delivered over the internet (PaaS), (iii) provide virtualized computing infrastructure over the internet (IaaS), (iv) own and manage facilities customers use to store data and servers, including data center Real Estate Investment Trusts (REITs), and/or (v) manufacture or distribution infrastructure and/or hardware components used in cloud and edge computing activities.
Impressive Growth Outlook
The increasingly digital and connected world that forms the backdrop for WCLD’s launch is exhibiting significant growth and is expected to continue to grow over the coming years. The cloud computing industry that was estimated to be worth $188 billion in 2018 is expected to be worth over $300 billion by 2022, a nearly 15% annualized growth rate.
Cloud spending is expected to increase as more companies integrate cloud computing into their existing infrastructures. According to market analysts as Canalys, this type of spending will sustain itself over the next five years with estimates that total spending on cloud infrastructure services could hit $284 billion in 2024.
Cloud computing represents a significant source of disruption not only in the technology sector but in the investment world as well. It has become ingrained in nearly every aspect of our lives by fundamentally altering how we consume, process, and share information in the digital age. The trend toward cloud-based solutions offers a compelling, long-term opportunity for investors to gain exposure to a quickly developing segment of the technology sector.
Declining costs in cloud adoption and increasing ease of use are among the factors driving the cloud computing boom. Several of WCLD’s marquee components have first-mover advantages in various cloud niches and are building attractive competitive moats in the space. WCLD’s IaaS exposure should beneficial to long-term investors.
WCLD is up 60.63% year-to-date, enough to make it the best-performing cloud computing ETF.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.