The ASX is set to welcome yet another exchange-traded fund (ETF). ETF provider BetaShares has announced that a new thematic fund is set to join its ranks soon – and it will track companies that operate in the cloud.
What is BetaShares
BetaShares is one of the ASX’s most well-known ETF providers. It currently offers a range of ETFs that span simple market-tracking index funds like the BetaShares Australia 200 Fund (ASX: A200) to specialised thematic ETFs like the BetaShares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ).
What’s this new cloud ETF?
BetaShares has announced that the new ETF will be named the BetaShares Cloud Computing ETF, with the ticker code CLDD. There aren’t too many additional details just yet, but here’s what we know. Firstly, BetaShares has given away that Xero Limited (ASX: XRO) will feature, along with Shopify Inc (NYSE: SHOP), DropBox Inc (NASDAQ: DBX), and Zoom Video Communications Inc (NASDAQ: ZM).
BetaShares tells us that this new ETF will aim to bring 3 benefits to ASX investors: growth potential from the cloud growth space, a ‘pure-play’ exposure to the cloud, and diversification from a basket of shares that are underrepresented on the ASX.
The ETF will track an index dedicated to following the cloud computing sector. This index looks to be the Indxx Global Cloud Computing Index. This index holds 36 stocks, with the top 5 constituents being Fastly, Zscaler, Shopify, Proofpoint and Twilio.
It also holds some of the larger, more familiar cloud giants like Amazon, Microsoft, Alibaba, Alphabet and Netflix.
What kind of performance can we expect?
Well, the ETF hasn’t even launched yet, so take this with a grain of salt. But according to BetaShares, “the index that CLDD will aim to track” has delivered an annual average performance (in Australian dollar terms) of 34.4% per annum between November 2013 and the end of January 2021. Of course, past performance is no indication of future returns. But it is informative knowing that this index will have some nice historical returns behind it.
BetaShares has not yet told us when this ETF will hit the ASX boards. But all ASX cloud enthusiasts should watch this space!