We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is First Trust Cloud Computing ETF (SKYY) a Strong ETF Right Now?
Read MoreHide Full Article
The First Trust Cloud Computing ETF (SKYY - Free Report) was launched on 05/27/2011, 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 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.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
SKYY is managed by First Trust Advisors, and this fund has amassed over $2.46 billion, which makes it one of the larger ETFs in the Technology ETFs. SKYY seeks to match the performance of the ISE Cloud Computing Index before fees and expenses.
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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.60% for SKYY, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.00%.
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.
Representing 82.9% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Telecom and Consumer Discretionary round out the top three.
Taking into account individual holdings, Arista Networks, Inc. (ANET) accounts for about 4.53% of the fund's total assets, followed by Alphabet Inc. (class A) (GOOGL) and Amazon.com, Inc. (AMZN).
SKYY's top 10 holdings account for about 36.56% of its total assets under management.
Performance and Risk
The ETF has lost about -10.34% and it's up approximately 21.9% so far this year and in the past one year (as of 04/17/2026), respectively. SKYY has traded between $92.16 and $143.46 during this last 52-week period.
The ETF has a beta of 1.21 and standard deviation of 25.51% for the trailing three-year period, making it a medium risk choice in the space. With about 64 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 $204.49 million in assets, WisdomTree Cloud Computing ETF has $230.85 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.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
Is First Trust Cloud Computing ETF (SKYY) a Strong ETF Right Now?
The First Trust Cloud Computing ETF (SKYY - Free Report) was launched on 05/27/2011, 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 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.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
SKYY is managed by First Trust Advisors, and this fund has amassed over $2.46 billion, which makes it one of the larger ETFs in the Technology ETFs. SKYY seeks to match the performance of the ISE Cloud Computing Index before fees and expenses.
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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.60% for SKYY, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.00%.
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.
Representing 82.9% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Telecom and Consumer Discretionary round out the top three.
Taking into account individual holdings, Arista Networks, Inc. (ANET) accounts for about 4.53% of the fund's total assets, followed by Alphabet Inc. (class A) (GOOGL) and Amazon.com, Inc. (AMZN).
SKYY's top 10 holdings account for about 36.56% of its total assets under management.
Performance and Risk
The ETF has lost about -10.34% and it's up approximately 21.9% so far this year and in the past one year (as of 04/17/2026), respectively. SKYY has traded between $92.16 and $143.46 during this last 52-week period.
The ETF has a beta of 1.21 and standard deviation of 25.51% for the trailing three-year period, making it a medium risk choice in the space. With about 64 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 $204.49 million in assets, WisdomTree Cloud Computing ETF has $230.85 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.