Global X is listing another cloud computing ETF, in what is the fourth ETF to broadly track this space and the second to track specifically this space (you can trust First Trust to have been first, whose SKYY has hit the sky with $1.2B under management).
The Global X Cloud Computing ETF (CLOU) will track the Indxx Global Cloud Computing Index, which packages up companies likely to benefit from global cloud computing.
The index defines cloud computing as companies that make buck from any of the following:
- license and deliver software over the internet on a subscription basis
- provide a platform for creating software applications which are delivered over the internet
- provide virtualized computing infrastructure over the internet
- own and manage facilities customers use to store data and servers, including data center REITs
- manufacture or distribute infrastructure and/or hardware components used in cloud and edge computing activities, as determined by the Index Provider.
Those that make 50% of their revenue from these five activities are thrown in the index and market weighted. Those that generate less than half the revenue but more than $500M a year from these activities also get thrown in the index, but subject to a 2% weighting cap.
The index rebalances twice a year.