- Global Cloud adoption rates and spending hit new record highs.
- Work From Home behaviours are likely to become more permanent amongst
tech savvy workers.
- Apple’s Cloud usage helped power it to $2 trillion valuation.
- Hybrid/Multi- Cloud usage increasingly common amongst enterprises.
Performance Review
Monthly Performance of SKYY
HAN-GINS Cloud computing ETF (SKYY) enjoyed strong returns this month, benefiting from the
acceleration of remote working behaviours amongst consumers and workers. In August, SKYY posted a gain of 7.94%, and
is now up 22.64% for 2020. Over the past
12 months, our cloud computing ETF has gained an impressive 40.44%. Its NAV hit a new all-time
high of $11.65 on 1st Setember*.
SKYY’s broad holding of
Cloud Technology firms across infrastructure, platform, security and software
as a service, ensure it is a major beneficiary of the global Work From Home
phenomenon. The global phenomenon has
powered our top performers for August – with Salesforce up a record 39.93%,
followed by Zoom Video up 28.04%, NVIDIA 26.00%, Apple 21.66%, Cloudera 17.21%,
Adobe 15.55%, Alibaba 14.35%, Alphabet (Google) 9.52% and Amazon 9.05%. The rapid adoption rates illustrates clearly
the future has arrived far sooner for Cloud than many previously expected.
For the year to date 2020 leading
performers in our portfolio include:
NVIDIA (127.61%), Amazon (86.76%), Apple (76.99%)
and Salesforce (67.64%) [1]. The month of August saw a number of our largest
holdings hitting new highs for 2020.
This includes Apple, Amazon, Alibaba, Splunk and NVIDIA. See table on page four for full breakdown. Given these huge gains, we expect some profit
taking to occur prior to the US election.
Large scale Cloud adoption by
governments (including the Pentagon’s $10bn JEDI project), and across schools,
hospitals and multinationals, ensures long term subscription revenues for Cloud
providers. This has led to a rerating
across the entire theme as recurring revenues for the likes of Salesforce has
exceeded prior analyst expectations.
Both large and smaller Cloud players have enjoyed higher reratings.)
Salesforce’s impressive gains has led it to be our largest single
holding, while NVIDIA’s impressive gains has propelled it to our 3rd
largest holding after Apple. Impressive
gains by Adobe, Splunk, Zoom and Twilio have ensured they are also amongst our
Top 10 holdings.
It is clear COVID has significantly fast-tracked adoption rates. Global tech players involved in both the
infrastructure and platform side of Cloud such as Microsoft, Amazon and Google
increasingly rely on the Cloud to power its earnings. Cloud is now embedded in mainstream work-life
activities – from streaming services, video conferencing to social media and
remote academic learning (schools/universities) and remote work.
August |
YTD* |
12 Month** |
7.94% |
22.64% |
40.44% |
Past performance is no guarantee of future performance.
Source: Bloomberg/HANetf
*YTD figures based on 01.01.20 - 31.08.20
**12 Month figures based on
01.09.19 -31.08.20
HAN-GINS Cloud Technology UCITS ETF (SKYY) - 1 Year Performance (01/09/19-31/08/20)

Past performance is not an
indicator for future results and should not be the sole factor of consideration
when selecting a product. Investors should read the prospectus of the Issuer
(“Prospectus”) before investing and should refer to the section of the Prospectus
entitled ‘Risk Factors’ for further details of risks associated with an
investment in this product. Source: Bloomberg Data as of 31.08.2020
Industry News
Increasingly, companies are embracing a
multi-cloud approach, moving away from a single provider. Flexera’s latest survey clearly shows this
move. This reflects IBM’s big bet on Red
Hat which it acquired last year. The
current Big Tech battleground within Cloud is offering such hybrid services to
clients who seek to transfer data easily across multiple cloud platforms.

For illustrative purposes only
Source: https://www.flexera.com/blog/industry-trends/trend-of-cloud-computing-2020/
In addition, the fast tracking of Cloud adoption can be seen in the latest 2020 survey results in the chart below:

For illustrative purposes only
Source:
https://www.flexera.com/blog/industry-trends/trend-of-cloud-computing-2020/
Given the flexibility cloud subscription
services afforded users and the significant cost savings - versus maintaining
onsite hardware – IT budgets are increasingly shifting away from hardware to
Cloud. We expect global cloud spending
to hit a new all-time high for the 3rd quarter – as cloud spending
globally continues to gain momentum. As Work
From Home behaviours become ingrained amongst tech savvy workers – pre Pandemic
work rules will likely not revert. Cloud
now drives the Internet of Things, from Social Media and Digital Entertainment
to Healthcare Innovation (trackers and telemedicine), Future Cars, Cyber Security
and AI-Robotics. Many of the larger
Cloud players are vertically integrated – offering a variety of cloud services
form software to infrastructure and security too.
Constituent News
Below we highlight some of
the best performing cloud computing ETF holdings in SKYY’s portfolio. Included are the stock’s individual price
gains, as well as its contribution to SKYY’s portfolio return. The recent
addition of Twilio has been a top performer and contributor to our August
return. This broader definition of cloud includes all cloud communications,
ensuring SKYY is one of the broadest cloud offers across all 3 key cloud areas
of Infrastructure, Platform/Software as a Service.
Top 10 Constituents |
Weight |
Salesforce.com |
5.01% |
Apple Inc |
4.90% |
NVIDIA Corp |
4.88% |
Alibaba Group |
4.48% |
Amazon |
4.34% |
Zoom Video |
4.34% |
Twilio Inc |
4.32% |
SAP SE |
4.22% |
Adobe Inc |
4.07% |
Splunk Inc |
3.94% |
Region Breakdown |
Weight |
North America |
90.24% |
Europe |
4.22% |
Asia |
5.55% |
Source:
Bloomberg, HANetf. Data as of 31.08.20
Cloud
Tech giants Amazon, Microsoft and Apple all touched new
highs during August. Apple exceeded a $2
trillion valuation by early September.
Amazon and Microsoft followed with valuation topping out at $1.6
trillion. Microsoft’s commercial cloud
revenue topped $50 billion for the year, for the very first time (see slide
below), showing the growth of Microsoft’s Cloud product line versus its other
business areas.
Below
are the leading contributors to SKYY’s year to date and August performance
leaders – led by NVIDIA, Salesforce, Zoom, Amazon, Apple, Alibaba and
Microsoft. Amongst the most impressive
returns for August were some of our smaller holdings too including: Nutanix and Avaya – both up over 20% for
August. For the year Kingsoft, one of
China’s leading cloud players with data centres across Asia – has gained
108.3%.
Top Performing Contributors - Year to Date 2020
NAME OF HOLDING
|
% Average Weight
|
Total Return (%)
|
Contribution to Return (%)
|
NVIDIA CORP
|
4.94
|
127.61
|
4.63
|
AMAZON.COM INC
|
4.69
|
86.76
|
3.54
|
APPLE INC
|
4.38
|
76.99
|
2.90
|
SALESFORCE.COM INC
|
4.19
|
67.64
|
2.40
|
ADOBE INC
|
4.33
|
55.66
|
2.13
|
MICROSOFT CORP
|
4.39
|
44.15
|
1.80
|
SPLUNK INC
|
3.70
|
46.44
|
1.61
|
EQUINIX INC
|
4.45
|
36.89
|
1.47
|
ALIBABA GROUP HOLDING-SP ADR
|
4.07
|
35.33
|
1.42
|
ZOOM VIDEO COMMUNICATIONS-A
|
0.75
|
24.89
|
0.96
|
CITRIX SYSTEMS INC
|
2.60
|
31.65
|
0.92
|
TWILIO INC - A
|
0.86
|
20.00
|
0.88
|
ALPHABET INC-CL A
|
4.08
|
21.66
|
0.87
|
SAP SE
|
3.74
|
21.60
|
0.80
|
FORTINET INC
|
2.56
|
23.65
|
0.73
|
DELL TECHNOLOGIES -C
|
1.67
|
28.59
|
0.57
|
ORACLE CORP
|
3.94
|
9.44
|
0.44
|
CROWDSTRIKE HOLDINGS INC - A
|
0.42
|
18.38
|
0.41
|
RINGCENTRAL INC-CLASS A
|
0.59
|
11.74
|
0.37
|
KINGSOFT CORP LTD
|
0.47
|
108.33
|
0.35
|
ZSCALER INC
|
0.25
|
19.54
|
0.25
|
PALO ALTO NETWORKS INC
|
0.67
|
6.78
|
0.24
|
QUALCOMM INC
|
3.03
|
5.10
|
0.17
|
QUALYS INC
|
0.48
|
27.31
|
0.15
|
Past performance is no guarantee of future
performance
Source: FactSet/Solactive and Bloomberg Data as
of 31/08/20
Top Performing Contributors - August 2020
NAME OF HOLDING
|
% Average Weight
|
Total Return (%)
|
Contribution to Return (%)
|
SALESFORCE.COM INC
|
4.03
|
39.93
|
1.52
|
NVIDIA CORP
|
4.49
|
26.00
|
1.08
|
ZOOM VIDEO COMMUNICATIONS-A
|
3.73
|
28.04
|
0.99
|
APPLE INC
|
4.58
|
21.66
|
0.95
|
ALIBABA GROUP HOLDING-SP ADR
|
4.27
|
14.35
|
0.60
|
ADOBE INC
|
3.83
|
15.55
|
0.59
|
AMAZON.COM INC
|
4.23
|
9.05
|
0.38
|
ALPHABET INC-CL A
|
3.85
|
9.52
|
0.37
|
MICROSOFT CORP
|
3.83
|
10.28
|
0.37
|
CROWDSTRIKE HOLDINGS INC - A
|
2.08
|
11.07
|
0.24
|
INTEL CORP
|
3.01
|
7.47
|
0.22
|
DELL TECHNOLOGIES -C
|
2.07
|
10.45
|
0.20
|
SAP SE
|
4.30
|
4.34
|
0.19
|
SPLUNK INC
|
3.82
|
4.53
|
0.14
|
NUTANIX INC - A
|
0.55
|
29.38
|
0.14
|
ZSCALER INC
|
1.25
|
10.39
|
0.13
|
ORACLE CORP
|
3.66
|
3.19
|
0.12
|
NETAPP INC
|
1.29
|
6.98
|
0.08
|
CLOUDERA INC
|
0.45
|
17.21
|
0.07
|
INTL BUSINESS MACHINES CORP
|
3.78
|
1.61
|
0.06
|
TERADATA CORP
|
0.35
|
15.95
|
0.05
|
INSIGHT ENTERPRISES INC
|
0.27
|
19.99
|
0.05
|
CITRIX SYSTEMS INC
|
2.34
|
1.71
|
0.04
|
VMWARE INC-CLASS A
|
1.49
|
3.02
|
0.04
|

(Source:
2008-2020 Annual Report filings)
Salesforce’s blow out earnings, have helped drive a rerating in the
Cloud Computing area. Their superior
earnings along with Zoom’s impressive earnings - confirm how Cloud adoption
rates are booming globally. Until
recently, analysts had valued both Salesforce and Facebook at discounts to
their peers (Adobe, Microsoft, Apple etc.)
Fund Details
HAN-GINSCloud Technology UCITS ETF, is a UCITS compliant domiciled
in Ireland.
The SKYY
cloud ETF tracks the Solactive Cloud Technology Index and seeks to provide
exposure to companies active in the field of cloud computing, such as service
providers or producers of equipment or software focused on cloud computing.
Please
remember that the value of your investment may go down as well as up and past
performance is no indication of future performance.
EXCHANGE |
BB CODE |
RIC |
ISIN |
CURRENCY |
INCOME |
London Stock Exchange |
SKYY LN |
SKYY.L |
IE00BDDRF924 |
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Acc |
London Stock Exchange |
SKYP LN |
SKYP.L |
IE00BDDRF924 |
GBP |
Acc |
Borsa Italiana |
SKYY IM |
SKYY.MI |
IE00BDDRF924 |
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5XYE GY |
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DE000A2N5XC4 |
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Acc |
SIX |
SKYYSW |
SKYY.S |
IE00BDDRF924 |
CHF |
Acc |