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First Trust Global Portfolios launches Cloud Computing UCITS ETF


First Trust Global Portfolios, a UK based affiliate of First Trust Advisors and First Trust Portfolios, has launched the First Trust Cloud Computing UCITS ETF.

Tracking the ISE Cloud Computing Index, the investment objective of the Fund is to seek investment results that correspond generally to the price and yield of the index, before the Fund’s fees and expenses.
Cloud technology seeks to offer businesses faster innovation, flexible resources and economies of scale while allowing easy access to information to anywhere with an internet connection.
The ISE Cloud Computing Index is a modified market capitalisation weighted index designed to track the performance of companies actively involved in the cloud computing industry.  It seeks to invest in stocks of companies operating in this industry which includes direct service providers for network hardware/software, storage, and cloud computing and delivery of goods and services that utilise cloud computing technology. To be included in the index, a security must be engaged in a business activity supporting or utilising the cloud computing space, listed on an index-eligible global stock exchange and have a market capitalisation of at least USD100 million.
Securities are classified according to the following three business segments:
Pure Play Cloud Computing Companies: Companies that are direct service providers for the cloud actively supporting and forming cloud technology.
Non Pure Play Cloud Computing Companies: Companies that focus outside the cloud computing space but provide goods and services in support of the cloud computing space.
Technology Conglomerate Cloud Computing Companies: Large broad-based companies that indirectly utilise or support the use of cloud computing technology.
With ten per cent of the index weight allocated to technology conglomerate companies, the index weight that is allocated to non-pure play companies is calculated by dividing the non-pure play companies’ market capitalisation by the sum of the pure-play and non-pure play market capitalisations. The remainder of the index weight is allocated to pure play companies.
Stocks are equally weighted within each of the three classifications and the index is reconstituted and rebalanced semi-annually.
Gregg Guerin, First Trust Senior Product Specialist, says: “Cloud Computing is the simple idea of moving complex computer tasks into shared, decentralised services, enabling people to store and access data from almost any location in the world, which continues to rapidly gain momentum.
“The First Trust UCITS Cloud Computing ETF (the Fund) seeks to offer an efficient and innovative way to capitalise on this growing demand for the Global Public Cloud market. Providing exposure to pure-play and non-pure play companies (i.e. those operating as direct services providers and those providing goods and services that use cloud computing technology), as well as investing in four key technology conglomerate companies, this growing market provides an exciting investment opportunity. The Fund offers access to these markets in a flexible, UCITS ETF wrapper.”

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