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Is WisdomTree Cloud Computing ETF (WCLD) a Strong ETF Right Now?
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The WisdomTree Cloud Computing ETF (WCLD - Free Report) was launched on 09/06/2019, and is a smart beta exchange traded fund designed to offer broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
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
The fund is sponsored by Wisdomtree. It has amassed assets over $652.84 million, making it one of the larger ETFs in the Technology ETFs. Before fees and expenses, WCLD 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.45% for WCLD, making it one of the cheaper products in the space.
WCLD's 12-month trailing dividend yield is 0%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For WCLD, it has heaviest allocation in the Information Technology sector --about 84.90% of the portfolio --while Financials and Telecom round out the top three.
Looking at individual holdings, Sentinelone Inc -Class A (S - Free Report) accounts for about 2.35% of total assets, followed by Elastic Nv (ESTC - Free Report) and Crowdstrike Holdings Inc - A (CRWD - Free Report) .
Its top 10 holdings account for approximately 19.75% of WCLD's total assets under management.
Performance and Risk
The ETF has lost about -0.80% so far this year and is up roughly 25.66% in the last one year (as of 03/25/2024). In the past 52-week period, it has traded between $25.40 and $37.05.
WCLD has a beta of 1.13 and standard deviation of 40.42% for the trailing three-year period. With about 70 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 $614.70 million in assets, First Trust Cloud Computing ETF has $3.17 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?
The WisdomTree Cloud Computing ETF (WCLD - Free Report) was launched on 09/06/2019, and is a smart beta exchange traded fund designed to offer broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
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
The fund is sponsored by Wisdomtree. It has amassed assets over $652.84 million, making it one of the larger ETFs in the Technology ETFs. Before fees and expenses, WCLD 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.45% for WCLD, making it one of the cheaper products in the space.
WCLD's 12-month trailing dividend yield is 0%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For WCLD, it has heaviest allocation in the Information Technology sector --about 84.90% of the portfolio --while Financials and Telecom round out the top three.
Looking at individual holdings, Sentinelone Inc -Class A (S - Free Report) accounts for about 2.35% of total assets, followed by Elastic Nv (ESTC - Free Report) and Crowdstrike Holdings Inc - A (CRWD - Free Report) .
Its top 10 holdings account for approximately 19.75% of WCLD's total assets under management.
Performance and Risk
The ETF has lost about -0.80% so far this year and is up roughly 25.66% in the last one year (as of 03/25/2024). In the past 52-week period, it has traded between $25.40 and $37.05.
WCLD has a beta of 1.13 and standard deviation of 40.42% for the trailing three-year period. With about 70 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 $614.70 million in assets, First Trust Cloud Computing ETF has $3.17 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.