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Is First Trust Cloud Computing ETF (SKYY) a Strong ETF Right Now?
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Launched on 05/27/2011, the First Trust Cloud Computing ETF (SKYY - Free Report) is a smart beta exchange traded fund offering broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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
Because the fund has amassed over $3.45 billion, this makes it one of the larger ETFs in the Technology ETFs. SKYY is managed by First Trust Advisors. Before fees and expenses, this particular fund seeks to match the performance of the ISE Cloud Computing Index.
The ISE Cloud Computing Index is a modified market capitalization weighted index designed to track the performance of companies actively involved in the cloud computing industry.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.60%.
It has a 12-month trailing dividend yield of 0.00%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For SKYY, it has heaviest allocation in the Information Technology sector --about 84.4% of the portfolio --while Telecom and Consumer Discretionary round out the top three.
When you look at individual holdings, Oracle Corporation (ORCL) accounts for about 5.4% of the fund's total assets, followed by Arista Networks, Inc. (ANET) and International Business Machines Corporation (IBM).
Its top 10 holdings account for approximately 40.42% of SKYY's total assets under management.
Performance and Risk
The ETF return is roughly 1.04% so far this year and is up roughly 39.23% in the last one year (as of 08/06/2025). In the past 52-week period, it has traded between $89.15 and $131.18
The ETF has a beta of 1.23 and standard deviation of 28.45% for the trailing three-year period, making it a medium risk choice in the space. With about 62 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust 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) tracks INDXX GLOBAL CLOUD COMPUTING INDEX and the WisdomTree Cloud Computing ETF (WCLD) tracks BVP NASDAQ EMERGING CLOUD INDEX. Global X Cloud Computing ETF has $311.28 million in assets, WisdomTree Cloud Computing ETF has $345.29 million. CLOU has an expense ratio of 0.68% and WCLD changes 0.45%.
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 First Trust Cloud Computing ETF (SKYY) a Strong ETF Right Now?
Launched on 05/27/2011, the First Trust Cloud Computing ETF (SKYY - Free Report) is a smart beta exchange traded fund offering broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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
Because the fund has amassed over $3.45 billion, this makes it one of the larger ETFs in the Technology ETFs. SKYY is managed by First Trust Advisors. Before fees and expenses, this particular fund seeks to match the performance of the ISE Cloud Computing Index.
The ISE Cloud Computing Index is a modified market capitalization weighted index designed to track the performance of companies actively involved in the cloud computing industry.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.60%.
It has a 12-month trailing dividend yield of 0.00%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For SKYY, it has heaviest allocation in the Information Technology sector --about 84.4% of the portfolio --while Telecom and Consumer Discretionary round out the top three.
When you look at individual holdings, Oracle Corporation (ORCL) accounts for about 5.4% of the fund's total assets, followed by Arista Networks, Inc. (ANET) and International Business Machines Corporation (IBM).
Its top 10 holdings account for approximately 40.42% of SKYY's total assets under management.
Performance and Risk
The ETF return is roughly 1.04% so far this year and is up roughly 39.23% in the last one year (as of 08/06/2025). In the past 52-week period, it has traded between $89.15 and $131.18
The ETF has a beta of 1.23 and standard deviation of 28.45% for the trailing three-year period, making it a medium risk choice in the space. With about 62 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust 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) tracks INDXX GLOBAL CLOUD COMPUTING INDEX and the WisdomTree Cloud Computing ETF (WCLD) tracks BVP NASDAQ EMERGING CLOUD INDEX. Global X Cloud Computing ETF has $311.28 million in assets, WisdomTree Cloud Computing ETF has $345.29 million. CLOU has an expense ratio of 0.68% and WCLD changes 0.45%.
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.