One More Leveraged Cloud Computing ETF Hits The Market

Cloud computing has been a hot investing area lately thanks to higher demand and stupendous stock market gains of the industry players. It is a process in which data or software is stored outside of a computer, but can easily be accessed anywhere, at any time via the Internet. This idea is effective as it helps firms lower IT costs by eliminating the need for servers and related maintenance costs.

Also, cloud computing provides greater accessibility. Since everything is on the Internet, users can access any data or document at any moment. Needless to say, such advantages have given it an edge in the pandemic situation when major part of the world is working-learning-shopping-from home.

No wonder, issuers have been comi8ng up with leveraged cloud computing ETFs one by one. Few days back, Direxion recently launched bull and bear leveraged cloud computing ETFs for investors so that one can place bold bets on the ups and downs of this high-potential industry.

And now ProShares has taken the same route with its leveraged product – Ultra Nasdaq Cloud Computing SKYU. The fund was launched on Jan 19.

Inside SKYU

The fund looks to achieve two times (2x) the daily performance of the ISE CTA Cloud Computing Index. The underlying index is designed to track the performance of companies actively involved in the cloud computing industry. There are about 64 securities in the fund. Oracle (4.10%), Kingsoft (3.96%) and MongoDB (3.81%) are the top three stocks. It charges 95 bps in fees.

How Does SKYU Fit In a Portfolio?

Cloud computing and storage have given a boost to video conferencing, gaming, e-commerce shopping, remote project collaboration, online classes, editing, etc. It is being used in applications in social networking, messaging apps and streaming services (read: ETF Areas Thriving During Coronavirus Pandemic).

In the wake of the pandemic, cloud technology adoption has seen robust growth in sectors where the work-from-home initiatives helped sustain business functions. Globally, end-user spending on public cloud services is forecast to grow 18.4% in 2021 to a total $304.9 billion, according to Gartner.

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