Cloud Technology Monthly Report | May
Learn more about the Cloud computing ETF
- The Cloud Computing ETF has expanded to 75 equally weighted holdings with an ESG screen.
behaviour will continue to boost Cloud spending post-COVID, rising to $500bn within 2 years.
- Majority of IT spending is moving away from
hardware and onsite servers to Cloud.
- Desktop as a Service is a very fast-growing
- 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.
- Software as a Service will continue to receive
the largest Cloud spending. (see chart)
Technology ETF (SKYY) Returns
Past performance is no guarantee
of future performance.
Source: Solactive, HANetf
Month figures based on 01.05.20 - 30.04.21.
HAN-GINS Cloud Technology ETF (SKYY) is up 8.45% over the
first four months in 2021, with April seeing a strong 6.56% return. SKYY offers broad exposure to all key areas
of the Cloud revolution – infrastructure, security, platform and software as a
service. SKYY’s large-cap and
infrastructure exposure ensures it accurately tracks global cloud activity well
beyond just the US and software developers.
In April, SKYY’s largest contributors to performance included
Teradata (28.4%), NVIDIA (12.5%), Alphabet (14.1%), Crowdstrike
(14.3%), SAP (14.5%), Amazon (12.1%), Oracle (8.5%), Extreme
Networks (30.1%) and Palo Alto Networks (9.7%). The pandemic and remote working phenomenon is
boosting demand for these firms’ Cloud services. They are amongst the largest weighted
holdings in the portfolio.
Teradata almost doubled earnings during the first
quarter on the back of new deals with AWS, Accenture and Sirius XM (satellite
radio) using the company over rivals.
Given the rise in large cyberattacks - recently Colonial Pipeline and
Solar Winds (US government) – both Palo Alto Networks and Crowdstrike are benefiting from new
cybersecurity orders related to cloud services.
Big Tech giants are expanding the Cloud 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. Nuance
is a leader in the field of digitizing doctor patient visit details/conversations
and clinical documentation.
In 2021, a clear trend is the move to more hybrid/multi-cloud
platforms and infrastructure. Salesforce,
IBM and SAP are expected to benefit from this open architecture - allowing the
easy flow of data across multiple Clouds.
HAN-GINS Cloud Technology UCITS ETF
As of 30.04.21
HAN-GINS Cloud Tech UCITS ETF
Solactive Cloud Technology Index (NTR)
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.
*The fund changed its index on 14th April. The index performance is a composite of the
old index prior to this date and the new index after
Past performance is no guarantee of future performance.
Source of all data: Solactive/ HANetf as of 30/04/2021
Gartner predicts public cloud services will hit almost $400bn in
spending by next year. They estimate 37% of all public cloud services revenue
is from SaaS applications and services (in 2021), projected to reach $122.6bn
with CRM being the dominant application category. Corporates are prioritising cloud
infrastructure investment to better support virtual workforces, supply chains,
partners, and service partners.
Desktop as a Service (DaaS)
is likely to grow fastest at 67% in 2021, followed by Infrastructure as a Service
(IaaS) with a 38.5% jump in revenue. Platform
as a Service (PaaS) is estimated to be the third-fastest growing area of public
cloud services, with a 28.3% jump in revenue for 2021 predicted.
SaaS, the largest segment of
public cloud spending (37% in 2021), is forecast to grow 19.3% this year. This
chart summarises these growth rates of public cloud services between 2020 and
For illustrative purposes only. Past performance is no guarantee of
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.
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
SKYY now has 75 holdings consistently, expanding from 50
(fast-growing players). Our updated
Equal Weighted approach, captures smaller and more innovative Cloud
companies. Each holding now averages
around 1.3% at rebalance.
These April changes
ensures SKYY’s broader holdings are now one of the most representative Cloud
ETFs, mirroring the global revenue mix across the Cloud industry and its
- More representative of Cloud industry with SaaS
holdings (Software as a Service) now the largest weighting at 66%, PaaS 20% and
- A new ESG screen will follow UN Global Compact
rules (excludes controversial weapons, fossil fuels etc).
- SKYY’s Top 10 holdings only represent 17.6% of
the portfolio - versus 21% for WCLD.
- WCLD is focused solely on software companies,
often called SaaS or Software as a Service.
- SKYY incudes companies across the cloud space
including Infrastructure as a Service (Iaas) and Platform as a Service (PaaS).
- SKYY is globally diversified - US exposure
76.6%, followed by China 8.4%, Israel 3.5%, Germany 2.5% and Japan 2.4%.
- As Cloud is rolled out globally – these players
are best positioned to scale up globally.
For illustrative purposes only. Source: Solactive Index, GinsGlobal Index Funds,
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
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.
Hybrid Cloud’s growing popularity using open-source software
such as Linux ensures many more businesses can now embrace the Cloud. 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
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 Cloud computing ETF