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Is WisdomTree Cloud Computing ETF (WCLD) a Strong ETF Right Now?
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A smart beta exchange traded fund, the WisdomTree Cloud Computing ETF (WCLD - Free Report) debuted on 09/06/2019, and offers broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Wisdomtree, WCLD has amassed assets over $546.60 million, making it one of the larger ETFs in the Technology ETFs. Before fees and expenses, this particular fund seeks to match the performance of the BVP NASDAQ EMERGING CLOUD INDEX .
The BVP Nasdaq Emerging Cloud Index is an equally weighted Index, designed to measure the performance of emerging public companies focused on delivering cloud-based software to customers.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.45% for WCLD, making it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 0%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 92.60% of the portfolio, the fund has heaviest allocation to the Information Technology sector.
When you look at individual holdings, Sentinelone Inc -Class A (S - Free Report) accounts for about 1.46% of the fund's total assets, followed by Olo Inc - Class A (OLO - Free Report) and Elastic Nv (ESTC - Free Report) .
Its top 10 holdings account for approximately 12.76% of WCLD's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree Cloud Computing ETF has lost about -54.13% so far, and is down about -62.94% over the last 12 months (as of 11/08/2022). WCLD has traded between $23.53 and $65.33 in this past 52-week period.
The ETF has a beta of 1.12 and standard deviation of 42.68% for the trailing three-year period. With about 75 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Cloud Computing ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Global X Cloud Computing ETF (CLOU - Free Report) tracks INDXX GLOBAL CLOUD COMPUTING INDEX and the First Trust Cloud Computing ETF (SKYY - Free Report) tracks ISE Cloud Computing Index. Global X Cloud Computing ETF has $529.82 million in assets, First Trust Cloud Computing ETF has $2.75 billion. CLOU has an expense ratio of 0.68% and SKYY charges 0.60%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is WisdomTree Cloud Computing ETF (WCLD) a Strong ETF Right Now?
A smart beta exchange traded fund, the WisdomTree Cloud Computing ETF (WCLD - Free Report) debuted on 09/06/2019, and offers broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Wisdomtree, WCLD has amassed assets over $546.60 million, making it one of the larger ETFs in the Technology ETFs. Before fees and expenses, this particular fund seeks to match the performance of the BVP NASDAQ EMERGING CLOUD INDEX .
The BVP Nasdaq Emerging Cloud Index is an equally weighted Index, designed to measure the performance of emerging public companies focused on delivering cloud-based software to customers.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.45% for WCLD, making it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 0%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 92.60% of the portfolio, the fund has heaviest allocation to the Information Technology sector.
When you look at individual holdings, Sentinelone Inc -Class A (S - Free Report) accounts for about 1.46% of the fund's total assets, followed by Olo Inc - Class A (OLO - Free Report) and Elastic Nv (ESTC - Free Report) .
Its top 10 holdings account for approximately 12.76% of WCLD's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree Cloud Computing ETF has lost about -54.13% so far, and is down about -62.94% over the last 12 months (as of 11/08/2022). WCLD has traded between $23.53 and $65.33 in this past 52-week period.
The ETF has a beta of 1.12 and standard deviation of 42.68% for the trailing three-year period. With about 75 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Cloud Computing ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Global X Cloud Computing ETF (CLOU - Free Report) tracks INDXX GLOBAL CLOUD COMPUTING INDEX and the First Trust Cloud Computing ETF (SKYY - Free Report) tracks ISE Cloud Computing Index. Global X Cloud Computing ETF has $529.82 million in assets, First Trust Cloud Computing ETF has $2.75 billion. CLOU has an expense ratio of 0.68% and SKYY charges 0.60%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.