The Global X Cloud Computing ETF (Nasdaq: CLOU) is not even two months old and it already has $300 million in assets under management, confirming that investors are willing to use exchange traded funds to access the myriad growth opportunities associated with the cloud.
CLOU, which tracks the Indxx Global Cloud Computing Index, could be positioned to help investors take advantage of new, potentially massive cloud computing trend: the hybrid cloud.
“Hybrid cloud is the computing model that lets businesses store and process data and use applications on a public cloud — like those run by Amazon Web Services, Microsoft and Google — while still keeping some percentage of that work in their own data centers,” reports Business Insider.
The bulk of CLOU’s holdings are makers of application and systems software, both of which are integral for business as more companies move data storage and cybersecurity to the cloud.
Making The CLOU ETF Call
CLOU components are “positioned to benefit from the increased adoption of cloud computing technology, including companies whose principal business is in offering computing Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), Infrastructure-as-a-Service (IaaS), managed server storage space and data center real estate investment trusts, and/or cloud and edge computing infrastructure and hardware,” according to Global X.
By some estimates, the hybrid cloud market could eventually be worth as much as $63 billion.
“Big cloud and corporate IT players like VMware, Hewlett Packard Enterprise and Dell are excited about the hybrid approach — not least because while they don’t have clouds that can stand up to the market-leading Amazon Web Services, they do have a healthy presence in the existing data center,” according to Business Insider.
Declining costs in cloud adoption and increasing ease of use are among the factors driving the cloud computing boom. Several of CLOU’s marquee components have first-mover advantages in various cloud niches and are building attractive competitive moats in the space.
CLOU has traded slightly lower since coming to market, but over the past month, the cloud computing ETF is performing less poorly than the established cloud ETF.
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