- Cloud
computing spending set to boom post-COVID – rising to $500bn within 2 years.
- Remote work habits continue to boost Cloud usage
versus onsite hardware spending.
- Global public cloud infrastructure market will
grow 35% to $120 billion in 2021.
- Multi and Hybrid Clouds are increasingly popular
due to open architecture demand.
- Improved AI and 5G are facilitating the global expansion
of Cloud adoption.
Cloud
Technology ETF (SKYY) Returns
March
|
12 Month*
|
-0.71%
|
50.45%
|
Past performance is no guarantee
of future performance.
Source: Solactive, HANetf
*12
Month figures based on 01.04.20 - 31.03.21.
Performance Review
HAN-GINS Cloud computing 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 March, the Cloud computing ETF's largest contributors to performance included
CISCO (15.2% gain), IBM (12.1%), NetApp (16.1%), Fortinet
(9.2%), HP (9.0%), Oracle (8.8%) and Dell (8.7%). The pandemic and remote working phenomenon is
boosting demand for these firms’ Cloud services. They are amongst the largest weighted
holdings in the portfolio.
Past performance is no guarantee of future performance.
Source of all data: Solactive/ HANetf as of 31/03/2021
Big Tech giants are expanding their reach into the fast-growing
Healthcare sector, as hospitals increasingly switch to Virtual services and Telemedicine.
Microsoft’s $16bn acquisition of Nuance Communications reinforces this trend as
Nuance is a leader in the field of digitizing doctor patient visit
details/conversations and clinical documentation.
In 2021, big Cloud trends include moves to more hybrid/multi-cloud
platforms and infrastructure. This allows
multinationals to speedily adopt cloud services across their various global units,
allowing the easy flow of data across multiple Clouds. IBM’s recent price gain is tied to its goal of
becoming the largest hybrid cloud player, on the backs of its $35bn
Red Hat acquisition.
Holdings
|
% Average Weight
|
Total Return (%)
|
Contribution to Return (%)
|
CISCO SYSTEMS INC
|
4.31
|
15.24
|
0.63
|
INTL BUSINESS MACHINES CORP
|
4.05
|
12.05
|
0.46
|
ORACLE CORP
|
4.11
|
8.77
|
0.35
|
INTEL CORP
|
5.30
|
5.30
|
0.32
|
NETAPP INC
|
1.56
|
16.09
|
0.24
|
FORTINET INC
|
2.49
|
9.22
|
0.23
|
DELL TECHNOLOGIES -C
|
2.30
|
8.73
|
0.20
|
HEWLETT PACKARD ENTERPRISE
|
2.03
|
8.98
|
0.20
|
EQUINIX INC
|
3.64
|
4.82
|
0.16
|
F5 NETWORKS INC
|
1.25
|
9.81
|
0.12
|
ADOBE INC
|
3.57
|
3.42
|
0.10
|
VMWARE INC-CLASS A
|
1.19
|
8.86
|
0.10
|
CITRIX SYSTEMS INC
|
1.71
|
5.36
|
0.09
|
ALPHABET INC-CL A
|
4.66
|
2.01
|
0.08
|
Past performance is no guarantee of future performance.
Source: Solactive. Data as of 31.03.21
HAN-GINS Cloud Technology UCITS ETF
–
Performance
As of 31.03.21
|
1M
|
3M
|
6M
|
YTD
|
12M
|
SI
|
HAN-GINS Cloud Tech UCITS ETF
|
-0.71%
|
1.77%
|
10.37%
|
1.77%
|
50.45%
|
56.32%
|
Solactive Cloud Technology Index (NTR)
|
-0.66%
|
1.89%
|
10.65%
|
1.89%
|
51.27%
|
58.31%
|
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 31/03/2021
Industry News
Cloud spending is not expected to slow down as the pandemic
gets under control. Remote work habits
are expected to continue and Cloud computing is arguably the centrepiece of the
world’s technical response to the COVID-19 crisis.
According to IDC Research, public cloud spending will
grow from US$229bn in 2019 to US$500bn in 2023, with a compound annual growth
rate (CAGR) of 22.3%.
Increased usage of hybrid cloud services is expected as benefits
include greater 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.
By the end of 2021, we expect 60% of companies will utilise public cloud
platforms and 25% of developers will use serverless. Cloud
native technology is driving enterprise digital transformation strategies. Other key trends include:
Alibaba Cloud is expected to take over
the No. 3 revenue spot globally, after Amazon Web Services (AWS) and Microsoft
Azure.
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.
Cloud providers are
also moving into promising emerging markets, such as Edge cloud and edge computing.
Big Tech players Microsoft, Google, and Amazon are increasingly collaborating with healthcare and pharma
firms to develop drugs fast and cheaply, with the assistance of AI and Cloud
Computing.
Constituent News
The Cloud computing ETF currently has 50 constituents, with the US country
weighting at 91.4%. It is followed by Asia (4.6%) and Europe (3.9%). In
April SKYY will be undergoing a broadening of its holdings as follows - with
these upgrades. SKYY will now be the
most representative Cloud ETF mirroring the global revenue mix across the Cloud
industry and its subthemes:
Highlights include:
- Holdings expanding to 75
from 50 (fast-growing players).
- Equally Weighted approach -
capturing even more innovative Cloud companies.
- The above approach will ensure smaller companies
have a larger weighting in our ETF, while ensuring diversification is foremost too. Each holding will average around 1.3%
- More representative of Cloud industry with SaaS
holdings (Software as a Service) now the largest weighting at 66%, PaaS 20% and
IaaS 14%.
- A new ESG screen will follow UN Global Compact
rules (excludes controversial weapons, fossil fuels etc).
- US weightings will now fall to approximately 75%
from over 90% currently.
- Cloud Tech spending is expected to reach $500bn
within 2 years – double current levels.

For illustrative
purposes only. Source: Solactive Index,
GinsGlobal Index Funds, April 2021
Outlook
SaaS (Software as a Service) will continue to dominate Cloud
spending (see chart below).
Infrastructure- and Platform as a
Service areas together currently represent the remaining ~50% of Cloud
computing revenues. SaaS and IaaS are
projected to see the fastest growth over the next few years, across the Cloud
space.
The majority of IT corporate spend is moving away from onsite hardware
and servers to remote Cloud usage. Data
centre chip revenues and Hyperscale Cloud have seen significant revenue boosts
during COVID. The global cloud storage
market is expected to grow from
$50.1bn in 2020 to $137.3bn by 2025, at a Compound Annual Growth Rate (CAGR) of
22.3%. The need for agile storage solutions to manage the ever-increasing data
volumes is driving this growth.
Hybrid Cloud’s growing popularity using open-source software
such as Linux ensures many more businesses can now embrace the Cloud. Cloud services
across public, private and edge environments are using the hybrid model via multiple
cloud service providers. This ensures faster scaling up for business globally. The
shift to hybrid cloud translates to a blurring of the lines between the public
cloud and the traditional data centre.
Artificial intelligence, analytics, security, IoT, and edge
computing will likely be key differentiators among the top cloud service
providers – along with serverless and managed services.
Cloud usage in Asia for online gaming and streaming has made
this region the fastest growing area for digital entertainment. The Asia-Pacific Cloud Gaming
market is estimated to see a CAGR of 46.8% during the forecast
period 2016-2022. This is based on huge increases in mobile and internet
subscriber bases, increases in the gaming audience and continued government
infrastructure upgrades.
SaaS Revenues Larger Than Other Cloud Areas
For
illustrative purposes only. Past performance is no guarantee of future
performance. Source: https://globalxetfs.co.jp/en/research/cloud_new/
SKYY Fund page