IPOs and Cloud Computing ETFs Are Dominating 2020 Thus Far

To say that 2020 “has been interesting” thus far would be an understatement, but when it comes to exchange-traded funds (ETFs), that’s truly the case. Investorplace published their 10 best ETFs so far for 2020 which included dominance by IPO- and cloud-focused funds despite a pandemic-ridden year.

“First, the novel coronavirus took a heavy toll on countless stocks,” the InvestorPlace article noted. “Then we saw a nice recovery in the companies that stood to benefit most from changes in the “new normal.” Meanwhile, industries like air travel and entertainment experienced (and continue to experience) great pain. All of this managed to throw countless exchange-traded funds into limbo, as their general design to hold numerous stocks centralized around a specific theme made some of them particularly vulnerable.”

“But the madness didn’t stop there,” the article added. “More recently, tech stocks took a beating shortly before the first debate leading into the Presidential election. Then President Donald Trump tested positive for Covid-19.”

The list included funds like the Renaissance IPO ETF (NYSEArca: IPO). IPO seeks to replicate the price and yield performance of the Renaissance IPO Index, which is a portfolio of companies that have recently completed an initial public offering (“IPO”) and are listed on a U.S. exchange.

IPO Chart

For investors seeking IPO opportunities around the globe, the Renaissance International IPO ETF (NYSEArca: IPOS)  adds an international spin to the IPO market. IPOS tracks the rules-based Renaissance International IPO Index, which adds sizeable new companies on a fast-entry basis with the rest upon scheduled quarterly reviews. Current IPOS holdings include SoftBank Corp, Xiaomi, and China Tower Corp.

Investors’ Heads in the Clouds

Another fund on the list was 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.

CLOU Chart

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.

For more market trends, visit the ETF Trends.