- Cloud computing will be central to the post-COVID
work habits
- Global public cloud infrastructure market will
grow 35% to $120 billion in 2021[1]
- Multi and Hybrid Clouds will increasingly
dominate as open architecture increasingly dominates public cloud usage
- AI and 5G are facilitating the expansion of Edge
computing
- Cloud spending growth has far exceeded overall
IT spend[2]
- Moderna's COVID vaccine used the Cloud to speed
up trials.[3]
- By 2024, Cloud to reduce CO2 emissions by 1.6bn
metric tons - if all data centres are designed for sustainability.[4]
Cloud
Technology ETF (SKYY) Returns
February
|
12 Month*
|
0.83%
|
41.32%
|
Past performance is no guarantee
of future performance.
Source: Bloomberg, Solactive, HANetf
*12
Month figures based on 29.02.20 - 28.02.21.
Performance Review
HAN-GINS Cloud Technology ETF (SKYY) offers broad exposure
to all key areas of the Cloud revolution – infrastructure, security, platform
and software – as a service. SKYY
includes large cap multinationals as well as mid-and small caps in its 50
holdings. SKYY’s large-cap and
infrastructure exposure ensures it accurately tracks global cloud activity well
beyond just the US and software developers.
In February, SKYY’s largest contributors to performance included
Intel (10.1% monthly return), Alphabet (10.7%), Twilio
(9.3%), Fortinet (16.7%), HP (18.0%), Oracle (6.8%) and Dell
(11.22%). These companies are benefiting
from the significant demand for Cloud services due to the pandemic and work from
home phenomenon. They are amongst the
largest weighted holdings in the portfolio.
Key Cloud trends includes the fast-growing Healthcare sector,
as hospitals increasingly switch to Virtual services and telemedicine. Cloud security services have seen a big spike
in demand due to cybersecurity concerns, tripling to $1.5bn by 2027[5].
Following a strong January performance for Cloud Security
players such as Crowdstrike and Zscaler, February saw generally more muted
returns, with SKYY returning 0.83%. For
2021 it is up 2.5%, while over the past 6 months it has gained 8.0%.
Past performance is no guarantee of future performance.
Source of all data: GinsGlobal/ Bloomberg.
In 2021 big Cloud trends include moves to more hybrid/multi-cloud
platforms and infrastructure. This will
allow large companies to increasingly adopt cloud services across their various
units globally, allowing the easy flow of data across multiple Clouds. IBM (up 1.2%) is
seeking to become the largest hybrid cloud player, on the backs of its $35bn
Red Hat acquisition.
Holdings
|
% Average Weight
|
Total Return (%)
|
Contribution to Return (%)
|
Teradata Corp
|
0.44
|
49.07
|
0.14
|
Avaya Holdings Corp
|
0.28
|
33.41
|
0.07
|
Hewlett Packard Enterprise
|
1.76
|
17.99
|
0.29
|
Fortinet Inc
|
2.17
|
16.65
|
0.33
|
Beijing Sinnet Technology-A
|
0.28
|
15.29
|
0.04
|
Extreme Networks Inc
|
0.25
|
13.35
|
0.03
|
Eplus Inc
|
0.20
|
12.52
|
0.02
|
Dell Technologies -C
|
2.01
|
11.22
|
0.21
|
Alphabet Inc-Cl A
|
4.47
|
10.65
|
0.44
|
Intel Corp
|
4.85
|
10.14
|
0.46
|
Montnets Cloud Technology
|
0.19
|
9.91
|
0.02
|
Insight Enterprises Inc
|
0.28
|
9.84
|
0.03
|
Twilio Inc - A
|
4.23
|
9.31
|
0.34
|
Oracle Corp
|
3.63
|
6.75
|
0.24
|
Past performance is no guarantee of future performance.
Source: Solactive. Data as of 28.02.21
HAN-GINS Cloud Technology UCITS ETF
–
Performance
As of 28.2.21
|
1M
|
3M
|
6M
|
YTD
|
12M
|
SI
|
HAN-GINS Cloud Tech UCITS ETF
|
0.83%
|
6.85%
|
8.02%
|
2.50%
|
41.32%
|
57.43%
|
Solactive Cloud Technology Index (NTR)
|
0.86%
|
6.98%
|
8.29%
|
2.57%
|
42.07%
|
59.36%
|
Past performance for the index is in USD. 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 /
HANetf. Data as of 28/2/2021
Industry News
According to IDC Research, public cloud spending is expected
to grow from US$229 billion in 2019 to US$500 billion in 2023, with a compound
annual growth rate (CAGR) of 22.3%.[6]
The demand for hybrid cloud could lead the world’s biggest
providers to partially break out from their walled garden approach. Hybrid cloud benefits include speed, control,
and security. In terms of speed, it optimizes the network to reduce the latency
and speeds up the data so that it can reach where it needs to be.
Key players Amazon Web Services (AWS), Microsoft
Azure, Google Cloud, and Alibaba, all reported record Cloud
revenues for the 4th quarter 2020. By the end of 2021, we expect 60%
of companies will utilise public cloud platforms and 25% of developers will use
serverless.[7] Cloud
native technology is driving enterprise digital transformation strategies. Other key trends include:
Alibaba Cloud will take the No. 3 revenue spot
globally, after Amazon Web Services (AWS) and Microsoft Azure.[8]
The percentage of worldwide IT spending dedicated to the
cloud will continue to accelerate in 2021. Gartner predicts that worldwide
public cloud spending by end-users will grow 18% in 2021 to $304.9 bn, up from
$257.5bn in 2020.[9]
Cloud providers are also moving into promising emerging
markets, such as Edge cloud and edge computing.[10],[11]
All of the major hyperscaler cloud providers are expanding
their early IoT-focused edge services to support broader use cases at the edge
beyond IoT,
Microsoft, Google, and AWS are
collaborating with pharma firms to develop drugs fast & cheaply with AI and
Cloud Computing.[12] Cloud
computing is the centrepiece of the world’s technical response to the COVID-19
crisis.
Constituent News
Our Cloud computing ETF currently has 50 constituents, with the US country
weighting at 91.3%. It is followed by Asia (4.8%) and Europe (3.9%). Our US weighting has dropped in recent
months, given the rise of Asian players primarily.
Alibaba is expected to become the world’s 3rd
largest Cloud infrastructure player, overtaking Google Cloud later this
year. While Amazon and Microsoft
posted record earnings, Google Cloud is spending big on its cloud
infrastructure buildout, thus bleeding money.[13]
Top Contributors – February 2021
Holdings
|
% Average Weight
|
Total Return (%)
|
Contribution to Return (%)
|
Intel Corp
|
4.85
|
10.14
|
0.46
|
Alphabet Inc-Cl A
|
4.47
|
10.65
|
0.44
|
Twilio Inc - A
|
4.23
|
9.31
|
0.34
|
Fortinet Inc
|
2.17
|
16.65
|
0.33
|
Hewlett Packard Enterprise
|
1.76
|
17.99
|
0.29
|
Oracle Corp
|
3.63
|
6.75
|
0.24
|
Dell Technologies -C
|
2.01
|
11.22
|
0.21
|
Nvidia Corp
|
4.13
|
5.58
|
0.21
|
Teradata Corp
|
0.44
|
49.07
|
0.14
|
Palo Alto Networks Inc
|
3.60
|
2.16
|
0.08
|
Avaya Holdings Corp
|
0.28
|
33.41
|
0.07
|
Beijing Sinnet Technology-A
|
0.28
|
15.29
|
0.04
|
Zscaler Inc
|
1.62
|
2.67
|
0.04
|
Ringcentral Inc-Class A
|
3.15
|
1.41
|
0.04
|
Past performance is no guarantee of future performance.
Source: Solactive. Data as of 28.02.21
Outlook
Increasingly, the majority of IT corporate spend is moving
away from non-Cloud onsite hardware to Cloud usage. The slide below shows the trend clearly over
the past 12 months. While non-Cloud infrastructure
has seen a reduction in revenues, data centre chip revenues and Hyperscale
Cloud have seen significant revenue boosts during COVID.[14]
It is clear Hybrid Cloud Computing will increasingly take
centre stage – with services across public, private and edge environments. This enables ever faster scaling up for
business globally. We believe the shift
to hybrid cloud as the global standard ensures there will increasingly be a
merging of the lines between the public cloud and the traditional data centre.
Artificial intelligence, analytics, IoT, and edge computing
will likely be key differentiators among the top cloud service providers – along
with serverless and managed services.
A growing demand for low-cost virtual cloud desktops is evident.[15]
This refers to the software requirements of a device being
fully managed by cloud service providers. The user just has a screen and some
basic hardware – with the rest of the processing power will be seamlessly
handled by cloud-based services.
With virtual cloud desktop users only paying based on cloud
usage, the high costs related to buying upgraded new hardware is eliminated. Referred to as Desktop-as-a-Service, this
model is already offered by Amazon via their Workspaces platform and Microsoft.
Google also offers such functionality through its Chromebook devices. It
can increase efficiency across an enterprise - by ensuring everyone is using
up-to-date, synchronized technology.

For illustrative purposes only. Past performance is no
guarantee of future performance. Source: Deloitte[16]
Product Details
HAN-GINS Cloud computing ETF, is a UCITS compliant cloud
computing ETF 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.