The WisdomTree Cloud Computing ETF (WCLD) 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 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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide 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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
WCLD is managed by Wisdomtree, and this fund has amassed over $343.08 million, which makes it one of the average sized 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.45%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 87.10% of the portfolio --while Industrials and Financials round out the top three.
When you look at individual holdings, Okta Inc (OKTA) accounts for about 1.99% of the fund's total assets, followed by Veeva Systems Inc-Class A (VEEV) and Appfolio Inc (APPF).
WCLD's top 10 holdings account for about 16.99% of its total assets under management.
Performance and Risk
So far this year, WCLD has lost about -23.16%, and is down about -14.58% in the last one year (as of 04/08/2025). During this past 52-week period, the fund has traded between $28.83 and $41.58.
The fund has a beta of 1.27 and standard deviation of 36.88% for the trailing three-year period. With about 68 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) tracks INDXX GLOBAL CLOUD COMPUTING INDEX and the First Trust Cloud Computing ETF (SKYY) tracks ISE Cloud Computing Index. Global X Cloud Computing ETF has $273.16 million in assets, First Trust Cloud Computing ETF has $2.73 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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WisdomTree Cloud Computing ETF (WCLD): ETF Research Reports Veeva Systems Inc. (VEEV): Free Stock Analysis Report AppFolio, Inc. (APPF): Free Stock Analysis Report First Trust Cloud Computing ETF (SKYY): ETF Research Reports Okta, Inc. (OKTA): Free Stock Analysis Report Global X Cloud Computing ETF (CLOU): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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