SKYY - First Trust Cloud Computing ETF

NasdaqGM - NasdaqGM Real Time Price. Currency in USD
68.70
+0.74 (+1.09%)
At close: 4:00PM EDT
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Previous Close67.96
Open67.97
Bid0.00 x 800
Ask0.00 x 1400
Day's Range67.60 - 68.70
52 Week Range45.00 - 68.94
Volume550,006
Avg. Volume788,758
Net Assets3.05B
NAV68.66
PE Ratio (TTM)N/A
Yield0.39%
YTD Daily Total Return13.84%
Beta (5Y Monthly)0.91
Expense Ratio (net)0.60%
Inception Date2011-07-06
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  • 5 Great Tech ETFs That Aren’t the XLK
    InvestorPlace

    5 Great Tech ETFs That Aren’t the XLK

    [Editor's note: "5 Great Tech ETFs That Aren't the XLK" was previously published in November 2019. It has since been updated to include the most relevant information available.]There are some ETFs that are clearly investor and trader's favorites. When it comes to tech ETFs, the Technology Select Sector SPDR Fund (NYSEARCA:XLK) is the runaway leader. The XLK covers all the major tech stocks in the S&P 500 and includes plenty of top hardware, software, semiconductors and services muscle. Add in its low expense ratio as well as its nearly 4 million shares per day trading volume and it's easy to see why investors have put more than $20 billion in the ETF.However, as awesome as the XLK is as a core tech fund, it isn't the only fish in the sea. There are plenty of other tech ETFs out there.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAnd in many cases, these specialized ETFs may offer something better than the popular XLK. Investors just gravitating to the XLK may actually be doing themselves a disservice. Thinking outside the box could lead to better returns. * 7 Under-the-Radar European Stocks to Buy for 2020 But what other tech ETFs are worthy of your time? Here are five that could give the popular XLK a run for its money. Invesco S&P SmallCap Information Technology ETF (PSCT)Source: Shutterstock Perhaps one of the biggest hits against the XLK is that it's full of the big boys -- the Microsofts (NASDAQ:MSFT), the Alphabets (NASDAQ:GOOG), etc. There's nothing wrong with these stocks, it's just many of the current and future leaders in tech are actually much smaller. And in this case, if you're looking for pure growth, then small-cap tech stocks should be where you focus your attention.And that's why the Invesco S&P SmallCap Information Technology ETF (NYSEARCA:PSCT) should be on your list.PSCT is just like the XLK, only this time it tracks all the tech stocks in the small-cap focused S&P 600. This currently includes 88 different stocks. Top holdings include networking equipment maker Viavi Solutions (NASDAQ:VIAV) and cloud computing communications firm 8×8 Inc (NASDAQ:EGHT). The makeup of the ETF is a bit different as well -- with electronic components and semiconductors making up the top sector weightings.That makeup and focus on smaller tech stocks haven't hurt the ETF on the performance front. PSCT has managed to post an average annual return of 18% over the last five years. That beats the broader S&P 600 and comes close to the XLK's performance.All in all, with more than $300 million in assets and a low 0.28% -- or $28 per $10,000 invested -- expense ratio, the PSCT is one of the best tech ETFs outside the XLK. ARK Innovation ETF (ARKK)Source: Shutterstock Active management works and can beat indexing when a) fund managers keep their funds small and b) when they take concentrated bets in only a handful of stocks. And that's just what Catherine Wood and her team do at the ARK Innovation ETF (NYSEArca:ARKK).ARK looks for stocks conducting so-called "disruptive innovation." Basically, any new technology that potentially changes the way the world works. The firm focuses its attention on four core areas -- the genomic revolution, industrial innovation, the next generation internet and fintech innovation.From here, Wood will select the best ideas and run a pretty concentrated portfolio of usually just 35 to 55 stocks. And she tends to sticks to her guns. For example, Wood bought tons of Tesla (NASDAQ:TSLA) during its last meltdown.Say what you will about Wood and her views on TSLA. But the concentrated strategy has worked for ARKK. Over the last three years, ARKK has managed to post a whopping 43% average annual return. That smashes the XLK over that time by a wide margin. * 7 Biometrics Stocks That Will Help Shape the Next Decade Perhaps the only downfall for ARKK is that its rather expensive at 0.75% in annual costs. However, if Wood can keep up the gains, that's a small price to pay to own one of the best performing tech ETFs out there. iShares Exponential Technologies ETF (XT)Source: Shutterstock If you like the idea of innovation and transformative tech, but don't think an active manager can make the right calls, then the iShares Exponential Technologies ETF (NYSEArca:XT). XT uses an index approach to get the job done.XT tracks the Morningstar Exponential Technologies Index. Exponential technologies are defined as advances which "displace older technologies, create new markets and have the potential to create significant positive economic benefits." This includes everything from 3-D printing and robotics to genomics/personalized medicine and data mining.The beauty is that XT doesn't just track strictly tech stocks like the XLK. It looks at all sectors to find these disruptors. There's plenty of industrials, healthcare and even real estate firms in the ETF. The fund currently 200 different global stocks -- with top holdings including ServiceNow (NYSE:NOW), Align (NASDAQ:ALGN) and First Solar (NASAQ:FSLR).Performance-wise, XT has been great. Through the end of April, the ETF has managed to produce an 18.70% annual return over the last three years. That's not too shabby. Even better is that XT has been less volatile than some other tech ETFs including the XLK. This is due to it not focusing purely on tech.Either way, with expenses clocking at 0.47%, XT makes a great choice for those investors looking to add some tech ETFs to their portfolios. First Trust ISE Cloud Computing Index Fund (SKYY)Source: Shutterstock Perhaps one of the biggest and most immediate advances in the tech sector has to be cloud computing. Every time you've used an app on your phone or accessed a data center at work, you've used the power of the cloud.Increasingly, our information and programs are being stored off-site. Software as a Service (SaaS) has become big business. That's why the First Trust ISE Cloud Computing Index Fund (NYSEARCA:SKYY) could be one of the best tech ETFs to buy.SKYY tracks the ISE Cloud Computing Index. The underlying index looks for firms that provide network hardware/software, storage, cloud computing services or those firms that deliver goods and services that utilize cloud computing technology.Preference is placed on those stocks that are pure cloud computing plays with tech conglomerates or those firms only derive a portion of their revenues from the cloud receiving a smaller weighting. * 10 Stocks to Buy for Your Income-Generating Portfolio The ETF is fairly concentrated with relatively few holdings. Top stocks include Salesforce.com (NYSE:CRM), SAP (NYSE:SAP) and VMware (NYSE:VMW).That explosive nature of cloud computing has helped propel SKYY one of the best performing tech ETFs around. Over the last three years, the fund has produced a 22% annual return.Expenses for SKYY clock in at just 0.60%. The KraneShares CSI China Internet ETF (KWEB)Source: Shutterstock Silicon Valley isn't the only place where tech innovation is happening. In fact, China has just as many global tech stock giants as the U.S. In looking for alternative ETFs to the XLK, heading to the Dragon Economy could be a smart bet and the KraneShares CSI China Internet ETF (NYSEArca:KWEB) could be the way to access the opportunity.KWEB tracks an index of China-based companies whose primary business are in internet-related sectors. The ETFs holdings read like a who's who of internet retailers, social media, gaming, travel and commerce sites in the nation.This includes giants like Alibaba (NYSE:BABA), NetEase (NASDAQ:NTES) and JD.com (NYSE:JD). With the ETF, you're basically getting the Facebook's (NYSE:FB) and Amazon's (NASDAQ:AMZN) of China.Given the sheer size of China's population and the growth of the internet in the nation, KWEB could be a solid long term bet for investors looking to expand their tech holdings. However, don't expect a smooth ride. The fund has been pretty volatile -- especially these days as the trade war has persisted. But the longer term looks rosy for China and its growth.With nearly $1.69 billion of assets and a 0.75% expense ratio, KWEB is the prime way to get a piece of the action.Disclosure: At the time of writing Aaron Levitt was long AMZN and XT. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Silver and Gold Stocks to Buy That Offer Contrarian Upside * 7 Earnings Reports to Watch Next Week * 5 Online Retail Stocks to Buy on the Dip The post 5 Great Tech ETFs That Aren't the XLK appeared first on InvestorPlace.

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  • ETF Trends

    A New Computing ETF Off To A Hot Start

    Hundreds of new ETFs have come to market this year with the Global X Cloud Computing ETF (CLOU) easily ranking among the standouts. CLOU, which debuted in April, follows the Indxx Global Cloud Computing Index, the fund holds a basket of companies that potentially stand to benefit from the continuing proliferation of cloud computing technology and services. The cloud computing industry refers to companies that (i) license and deliver software over the internet on a subscription basis (SaaS), (ii) provide a platform for creating software applications which are delivered over the internet (PaaS), (iii) provide virtualized computing infrastructure over the internet (IaaS), (iv) own and manage facilities customers use to store data and servers, including data center Real Estate Investment Trusts (REITs), and/or (v) manufacture or distribution infrastructure and/or hardware components used in cloud and edge computing activities.

  • WisdomTree's Cloud ETF on Deck
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  • Beware of Valuation Risks on Workday Stock
    InvestorPlace

    Beware of Valuation Risks on Workday Stock

    Shares of Workday (NASDAQ:WDAY) fell about 6% in late August after the hyper-growth cloud enterprise resource planning company reported second-quarter numbers which topped expectations. Management also hiked the full-year 2020 revenue guide. In other words, Workday reported a double-beat and-raise second-quarter earnings report, and in response, WDAY stock fell.Source: Sundry Photography / Shutterstock.com A stock failing to rally on a double-beat-and-raise report should raise red flags. It is almost always a sign of overvaluation.Is that what we have with Workday stock? I think so. Workday is a great company doing great things. The financials look really good, the narrative is robust, and the long-term potential is promising. But, Workday stock is priced for all that good stuff -- and then some.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIndeed, my numbers indicate that a fundamentally supported fiscal 2020 price target for WDAY stock is somewhere around $140. WDAY stock trades hands north of $170 today -- and we are only halfway through fiscal 2020.Thus, Workday stock seems overextended here. To be sure, overextended stocks can stay in rally mode so long as investors keep buying. But, investors aren't buying anymore. WDAY stock is down 20% over the past two months.I think this is the beginning of a bigger downturn in WDAY stock. As such, I'd avoid buying the dip here for the foreseeable future. Workday Has Solid FundamentalsFirst, I want it to be understood broadly that Workday is a good company doing really innovative things and gaining share rapidly in a big market. There is nothing fundamentally wrong with Workday.Enterprises everywhere are migrating to the cloud. As they do, they are adopting cloud ERP solutions to digitize, automate and optimize finance, HR and corporate planning processes. SAP (NYSE:SAP) and Oracle (NYSE:ORCL) have traditionally dominated the ERP market. But as the market has pivoted to the cloud, Workday has stepped in as a third legitimate player. A few years ago, hardly anyone used Workday. Today, 50% of Fortune 50 companies and 40% of Fortune 500 companies use Workday for their cloud ERP. * 7 Best Tech Stocks to Buy Right Now There's still plenty of room for growth here. Only one-fifth of enterprise workloads have migrated to the cloud so far. Further, while 40% of Fortune 500 companies use Workday, only 17% of global 2000 companies do so, too. Thus, Workday has a tremendous opportunity over the next few years to: 1) grow wallet share among big enterprises, and 2) increase adoption among smaller enterprises on a global scale.Consequently, revenue growth will remain big for the foreseeable future. Most of that revenue growth will come through the high-margin subscription revenue pipeline, so it will be additive to gross profits. At the same time, big revenue growth should drive consistent positive operating leverage, so operating margins and profits should both move higher with revenues.Net net, Workday projects to be a big revenue and profit grower for a lot longer. Workday Stock Is OvervaluedSound like a great growth narrative? It is.But, WDAY stock is already priced for all this. Revenue growth is slowing from 30%-plus rates, to 20%-plus rates. The margin expansion trajectory is flattening out because Workday is having to spend big to compete at scale. Gross margins in the subscription business are also showing signs of being maxed out. Thus, while profit growth will remain robust, it won't be as robust as it has been.Realistically, I think this a 20% revenue growth company with healthy, but not huge, margin upside drivers. That combination leads me to believe that $6 in earnings per share is an optimistic but doable target by 2025.That would represent more than 250% growth from 2020's projected EPS. But, that's just not enough growth. If you apply an application software average 34-times forward earnings multiple to that 2025 EPS target of $6, you arrive at a 2024 price target for WDAY stock of over $200. Discounted back by 10% per year, that equates to a 2020 price target of under $140.Workday stock trades north of $170 today. We aren't even halfway through fiscal 2020. Thus, WDAY stock seems aggressively overvalued today. The Party Appears to Be OverTo be sure, aggressively overvalued stocks can stay aggressively overvalued for a long time, so long as investors keep buying into the stock and the party stays alive.Unfortunately, the party in WDAY stock appears to be winding down.Markets have been choppy over the past few months. But not too choppy. Since mid-July, the S&P 500 is down about 3.5%. Cloud stocks are down about the same, with the First Trust Cloud Computing ETF (NASDAQ:SKYY) down about 5%.WDAY stock is down more than 20% over that same stretch. That is a noticeable underperformance of both the market and Workday's peers over the past few weeks.This underperformance leads me to believe that the party is over, meaning that this stock may not find support until its fundamentals give it support -- which doesn't happen until $140. Bottom Line on WDAY StockI'd stay away from Workday stock for the foreseeable future. The party appears to be over, and now the market is left with an aggressively overvalued cloud stock that investors don't want to touch. That dynamic should ultimately result in WDAY stock falling back below $150 over the next few weeks to months.As of this writing, Luke Lango did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Best Tech Stocks to Buy Right Now * 10 Mid-Cap Stocks to Buy * 8 Precious Metals Stocks to Mine For The post Beware of Valuation Risks on Workday Stock appeared first on InvestorPlace.

  • Cloud Computing ETFs: Reasons to Bet On
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