BetaShares to launch Australia’s first cloud computing ETF
BetaShares has today announced it expects to shortly launch the first ETF traded on the ASX to provide thematic exposure to the rapidly-growing cloud computing industry[1].
Cloud-based computing services has been one of the fastest-growing segments of the global technology revolution in recent years, with revenues forecast to grow 17.5% p.a. to reach US$832 billion by 2025[2].
The benefits of cloud-based computing have never been more apparent than today, with the COVID-19 pandemic accelerating existing trends which rely on cloud-computing services such as flexible working, video conferencing, online shopping and digital media consumption. Given ongoing growth in online activity, and the sizable share of the world’s digital data and software applications still maintained outside of the cloud, continued adoption of cloud-related services seems likely.
The BetaShares Cloud Computing ETF (CLDD) will aim to tap into this potential, by tracking an index of leading listed cloud computing companies, across both developed and emerging markets.
These companies are involved in the delivery of computing services, servers, storage, databases, networking, software, analytics and other services over the internet. Examples of current index constituents include Xero, Shopify, DropBox, and Zoom.
Since inception in November 2013 to end January 2021, the index CLDD will aim to track has returned 34.4% p.a., compared to 12.4% p.a. for the MSCI World Index, and 24.8% p.a. for the NASDAQ-100 Index[3].
BetaShares CEO, Alex Vynokur, said, “As the ETF industry has evolved, we’re seeing investors increasingly demand exposures to secular growth themes. Thematic ETFs are an appealing vehicle for this, as they allow investors to easily obtain exposure to a theme, and invest in a way that can transcend geographic regions and sectors.”
“CLDD has been carefully designed to offer a ‘pure play’ exposure to the cloud computing theme. It’s methodology ensures that only companies whose primary focus is on cloud-based services are included in the portfolio, and excludes large diversified tech companies whose global cloud services represent only a small part of their business.”
“We are excited to give Australian investors the ability to access the growth potential of cloud computing in a convenient and cost-effective way. Even with the significant take-up experienced to date, we believe the megatrend in cloud computing has only just begun.”
Subject to relevant approvals, the BetaShares Cloud Computing ETF (CLDD) is expected to start trading on the ASX in late February 2021.
[1] Subject to final regulatory approval.
[2] Source: Research and Markets, “Cloud Computing Market by Service Model (Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS)), Deployment Model (Public and Private), Organization Size, Vertical, and Region – Global Forecast to 2025″, August, 2020. Actual outcomes may differ materially from forecasts.
[3] Source: Bloomberg, 8 November 2013 to 31 January 2021. Past performance is not an indicator of future performance of the Index or CLDD. Does not take into account CLDD’s fees and costs. You cannot invest directly in an index. CLDD’s returns can be expected to be more volatile (i.e. vary up and down) than a broad global shares exposure, given its concentrated sector exposure.
