- Companies and remote workforces are benefiting from flexible cloud
services and costs.
- On-premises hardware is losing rapid market share to Cloud
infrastructure spending.
- Global Cloud adoption rates and spending continue to reach new records.
- SKYY, our Cloud Computing ETF, is expected to hit new highs in October as IT sector rebounds.
Performance Review
Monthly Performance of SKYY:
Cloud Computing ETF
HAN-GINS Cloud Technology ETF (SKYY) offers broad Cloud exposure to all
key areas. Its performance is less
volatile as a result. SKYY’s large-cap
exposure ensures it accurately tracks global cloud activity, not just the US
market.
Work From Home
behaviours continues to drive cloud adoption rates. Following a 7.9% gain in August, Cloud lost -2.82%
in September as the market took a breather.
It remains up over 32% for the past year. Its NAV hit $11.44 in early October –
approaching a new high.[1]
IBM’s recent spinoff of
its entire Cloud business into a new listed entity will also benefit SKYY due
it its exposure to large Cloud Infrastructure players and global IT Megacaps
leaders in this space (Google, Amazon, Oracle, Salesforce &
Microsoft). The COVID pandemic and Cloud
Security concerns have powered our top performers for September, with Zoom
Video up a record 44.6%, Bandwidth (10.9%), Crowdstrike (9.2%), Cloudflare
(7.3%) and Oracle (4.3%).
Cloud Technology ETF (SKYY) Performance
September
|
YTD*
|
12 Month**
|
-2.82%
|
19.18%
|
32.40%
|
Past performance is no guarantee of future performance.
Source: Bloomberg/HANetf
*YTD figures based on 01.01.20 - 30.09.20
**12 Month figures based on
01.10.19 -30.09.20
For the year to date 2020, leading
performers in our portfolio include:
NVIDIA (130.3%), Kingsoft (94.0%), Zoom Video
(80.6%), Amazon (70.4%), Apple (58.8%), Salesforce (54.5%), Adobe (55.7%),
Adobe (48.7%), Alibaba (38.6%) and Microsoft (34.4%).
We expect more M&A corporate activity in the
Cloud space, particularly amongst Cloud Security firms. The large Cloud Infrastructure players will
be unable to make ground breaking deals due to the US Election and anti-trust
concerns. We expect smaller add-on
acquisitions by the Megacap players whose record share prices provide them with
a relatively low-cost, cheap currency.
Past
performance is no guarantee of future performance. Source of constituent
data: I FactSet/Solactive and Bloomberg Data as of 30/09/20
Large scale Cloud adoption
across the public sector (governments, schools, hospitals and NGOs) means
growing revenues for the key players controlling Cloud pipelines. Longer term, we see multi-cloud players
becoming even more important as data is shared across various platforms.
The Top 10 holdings of our Cloud Computing ETF have shifted significantly – with Zoom Video now our
largest holding at 6.46%, NVIDIA (5.08%), Salesforce (4.75%), Alibaba (4.72%)
and Apple (4.52%). This is partly due to
September’s Big Tech falls, including Apple’s share price losing 10.3%,
Google down 10.1%, Salesforce down 7.8%
and Amazon -8.8%. However, these Megacaps have been resilient at the beginning
of October, recovering much of this lost ground.
Due to COVID-19, Cloud Technology is increasingly embedded into
mainstream work-life activities – from digital entertainment/streaming services
to video conferencing, social media and remote learning. While the US is the most built-out across
Cloud, Europe and developing nations are where much of the future growth is
expected. Larger cloud players held by
SKYY have a distinct advantage over smaller Cloud players given their existing
global reach.
HAN-GINS Cloud Technology UCITS ETF - Performance
Total Return NAV to Date (up to 30/09/2020)
|
1M
|
3M
|
6M
|
YTD
|
12M
|
Since Inception
|
HAN-GINS Cloud Technology UCITS ETF (Acc)
|
-2.82%
|
9.86%
|
36.31%
|
19.18%
|
32.40%
|
41.63%
|
Solactive Cloud Technology Index (NTR)
|
-2.78%
|
10.01%
|
36.71%
|
19.69%
|
33.18%
|
43.08%
|
HAN-GINS Cloud Technology UCITS ETF (SKYY) - 1 Year Performance (01/10/19-30/09/2020)

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 30.09.2020
Industry News
IBM announced a massive spinoff of all their Cloud Computing
initiatives into a soon to be listed new entity. Their stock rose
significantly as a result[2]. This new entity makes it easier for them
to offer global cloud solutions beyond IBM’s customer base, particularly with
other large Cloud/Tech players. The rerating of IBM follows companies increasingly embracing a multi-cloud
approach, moving away from a single provider.
Between 2017-2023, the global Multi Cloud
management market is estimated to grow at a CAGR of approximately 31%.[3] While IBM’s
acquisition last year of Red Hat places it amongst these hybrid leaders, Amazon
Web Services, Microsoft Azure, and Google Cloud are all vying for market
share. Dell Technologies,
Hewlett-Packard and VMware are also key players.
-
The global public
cloud computing market is set to exceed $330 billion in 2020.
- Providing
data access from anywhere is the top reason for cloud adoption.
- Organizations’
average yearly cloud budget was $2.2 million in 2018.
- About a
third of companies’ IT budget goes to cloud services.
- Privacy,
security and lack of staff training are the top roadblocks to cloud
adoption.
- Hybrid cloud adoption is at 58%.
Source https://hostingtribunal.com/blog/cloud-computing-statistics/#gref
Data acquisition remains vital – as the more corporate
data that resides in a Cloud the more difficult it is for the customer to move.
Cloud Spending Trends
Public cloud spending hit a milestone when it has passed
traditional IT infrastructure for the first time in the second quarter of 2020,
according to IDC[4]. Spending on cloud environments, including public
and private, increased 34.4% from a year ago[5].
Globally, Cloud is benefiting from major shifts to online tools;
from virtual business events, entertainment, shopping, telemedicine, and
education. Cloud based environments, particularly public cloud, are a key
facilitator of this shift. Spending on public cloud IT infrastructure increased
47.8% year over year in 2Q20, hitting $14.1bn.[6] This exceeded the
level of spend on non-cloud IT infrastructure for the first time ever.
The IT hardware infrastructure market has reached a tipping
point, with the Cloud continuing to account for an increasingly higher share of
overall market spending. Investments in cloud IT infrastructure is still
expected to exceed spending on non-cloud infrastructure. Much of this growth
will be driven by public cloud IT infrastructure spending.[7]
While spending on Cloud IT infrastructure has increased across
all regions in 2Q20, the two largest regions, China and the U.S., have
delivered the highest annual growth rates at 60.5% and 36.9% respectively. All
regions, except Central & Eastern Europe and the Middle East & Africa,
has witnessed the growth in public cloud infrastructure that is now exceeding
private cloud IT spend.[8]
Constituent News
Below we highlight some of
the best performing Cloud ETF holdings in SKYY’s portfolio. Included are the stock’s individual price
gains, as well as its contribution to SKYY’s portfolio return. Recent additions
such as Zoom Video and Twilio haven been amongst our top performers and
contributor to our recent returns. This broader Cloud definition, includes all
cloud communications, ensuring SKYY is one of the most diversified cloud
offering - across all 4 key cloud areas of Infrastructure, Platform and
Software as a Service, plus Security.
Top 10 Constituents
|
Weight
|
Zoom Video
|
6.46%
|
NVIDIA Corp
|
5.08%
|
Salesforce
|
4.75%
|
Alibaba Group
|
4.72%
|
Apple Inc.
|
4.52%
|
SAP SE
|
4.09%
|
Amazon.com Inc
|
4.07%
|
Twilio Inc.
|
4.07%
|
Adobe Inc
|
4.00%
|
Oracle Corp
|
3.90%
|
Region Breakdown
|
Weight
|
North America
|
90.20%
|
Europe
|
4.09%
|
Asia
|
5.70%
|
Source: Bloomberg, HANetf. Data as of 30/09/2020
Below
are the leading contributors to SKYY’s year to date and September performance
leaders – led by NVIDIA, Kingsoft, Zoom Video and Amazon for the year to
date. September had a number of smaller
firms contribute to performance as the large caps swooned.
Top Performing Contributors– Year to Date
2020
(01/01/2020 – 30/09/2020)
Name of Holding
|
Average Weight (%)
|
Total Return (%)
|
Contribution to Return (%)
|
NVIDIA CORP
|
4.92
|
130.33
|
4.63
|
KINGSOFT CORP LTD
|
0.48
|
94.03
|
0.30
|
ZOOM VIDEO COMMUNICATIONS-A
|
1.32
|
80.60
|
3.10
|
AMAZON.COM INC
|
4.63
|
70.40
|
3.06
|
APPLE INC
|
4.40
|
58.84
|
2.30
|
SALESFORCE.COM INC
|
4.25
|
54.53
|
1.92
|
ADOBE INC
|
4.29
|
48.70
|
1.89
|
PARETEUM CORP
|
0
|
43.17
|
0.02
|
INSEEGO CORP
|
0.24
|
40.79
|
0.12
|
ALIBABA GROUP HOLDING-SP ADR
|
4.11
|
38.60
|
1.52
|
CEVA INC
|
0.15
|
36.20
|
0.07
|
BANDWIDTH INC-CLASS A
|
0.11
|
35.96
|
0.13
|
MICROSOFT CORP
|
4.32
|
34.43
|
1.47
|
EQUINIX INC
|
4.39
|
31.75
|
1.29
|
DELL TECHNOLOGIES -C
|
1.74
|
31.72
|
0.62
|
AVAYA HOLDINGS CORP
|
0.06
|
31.49
|
0.06
|
21VIANET GROUP INC-ADR
|
0.01
|
31.03
|
0.06
|
CROWDSTRIKE HOLDINGS INC - A
|
0.66
|
29.29
|
0.64
|
ALARM.COM HOLDINGS INC
|
0.29
|
28.58
|
0.06
|
SPLUNK INC
|
3.68
|
25.61
|
0.95
|
CITRIX SYSTEMS INC
|
2.56
|
25.18
|
0.78
|
QUALYS INC
|
0.47
|
17.56
|
0.10
|
ZSCALER INC
|
0.37
|
17.33
|
0.22
|
SIERRA WIRELESS INC
|
0.19
|
16.43
|
0.04
|
SAP SE
|
3.79
|
14.67
|
0.50
|
ORACLE CORP
|
3.93
|
14.18
|
0.62
|
Past
performance is no guarantee of future performance. Source: FactSet/Solactive and Bloomberg Data as
of 30/09/20
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 |
USD |
Acc |
London Stock Exchange |
SKYP LN |
SKYP.L |
IE00BDDRF924 |
GBP |
Acc |
Borsa Italiana |
SKYY IM |
SKYY.MI |
IE00BDDRF924 |
EUR |
Acc |
XETRA |
5XYE GY |
5XYE.DE |
DE000A2N5XC4 |
EUR |
Acc |
SIX |
SKYYSW |
SKYY.S |
IE00BDDRF924 |
CHF |
Acc |
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