While private and public businesses have made the pivot to heavier reliance on cloud computing amid the Covid-19 pandemic, government organizations are following in tow. As such, more adoption by local and federal governments could spur cloud computing exchange-traded funds (ETFs).
“A recent Flexera survey found 59 percent of enterprise IT leaders plan to increase cloud adoption either slightly or significantly as a result of COVID-19,” a Government Technology article noted. “More than one in three executives see the pandemic as an impetus to digitally transform their business, according to a survey by software-maker Wind River.”
It wasn’t a sudden shift to cloud computing use, according to the article. It was a trend that was already revealing itself, but Covid-19 essentially put the move into sport mode.
“Government was headed this way already,” the article noted further. “NASCIO’s 2019 state CIO survey showed 34 percent of IT leaders had a cloud migration strategy in place and 51 percent had a strategy in development. The Center for Digital Government (CDG)* has also been tracking changing attitudes toward cloud technologies in cities, counties and states for several years. COVID-19 has opened up the throttle on those efforts.”
The impact of cloud computing can be felt as more companies are utilizing the technology at a rapid pace to power their core businesses. That’s why Global X ETFs, the New York-based provider of exchange-traded funds, recently launched the Global X Cloud Computing ETF (Nasdaq: CLOU).
Seeking to track the Indxx Global Cloud Computing Index, the fund holds a basket of companies that potentially stand to benefit from the continuing proliferation of cloud computing technology and services. 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 distribute infrastructure and/or hardware components used in cloud and edge computing activities.
Another fund to consider is the WisdomTree Cloud Computing Fund (WCLD). The fund seeks to track the price and yield performance of the BVP Nasdaq Emerging Cloud Index, which is designed to track the performance of emerging public companies primarily involved in providing cloud computing software and services to their customers. It is non-diversified.
For more market trends, visit the ETF Trends.