WisdomTree is tapping into the cloud computing industry with an exchange-traded fund (ETF) providing exposure to companies which leverage the service via networks of servers over the internet.
The WisdomTree Cloud Computing Ucits ETF aims to track the price and yield performance, before fees and expenses, of Bessemer Venture Partners and Nasdaq’s emerging cloud index.
Its expense ratio is set at 0.40%, and it is now listed on the London Stock Exchange.
According to the firm, the cloud computing market has been increasing exponentially and is expected to grow to nearly $697 billion (€631.7 billion) by 2025.
The fund targets cloud computing businesses that the firm believes are best positioned for “high levels of recurring revenue growth,” according to Jeremy Schwartz, WisdomTree’s global head of research.
“Cloud-based businesses typically have better profit margins and higher growth than other tech companies,” he said.
In order to be considered a cloud computing business and eligible for inclusion in the fund, the company must have certain characteristics, as determined by California-headquartered Bessemer Venture Partners. These include deriving a majority of its revenue from business-oriented software products through a cloud delivery model that is a subscription-based, volume-based, or transaction-based offering, and a minimum market capitalization of $500 million.
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