First Trust has listed of the First Trust Cloud Computing UCITS ETF (FSKY) on the Italian Stock Exchange, providing access for local trading and expanding the reach of this innovative fund to the expanding Italian ETF market.Based on the ISE CTA Cloud Computing Index, the fund launched on the LSE in December 2018 and will be listed on the Borsa Italiana on 6 March 2020.
Cloud technology which is an efficient method of storing, accessing, and syncing data and software through the internet 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. The Index is a comprehensive and rules-based, designed to measure the performance of companies engaged in a business activity in the cloud computing industry. To be included in the index, a security must be classified as a cloud computing company as defined by the Consumer Technology Association. The security also must meet the minimum market capitalisation of USD500 million, as well as a minimum free float of 20%; and a minimum three-month average daily dollar trading volume (ADDTV) of USD5 million. The total securities in the Index is 80.
Securities are classified according to the following three business segments:
Infrastructure-as-a-Service (IaaS) – Companies that deliver cloud computing infrastructure – servers, storage, and networks as an on-demand service
Platform-as-a-Service (PaaS) – Companies that deliver a platform for the creation of software in the form of virtualisation, middleware, and/or operating systems, which is then delivered over the Internet
Software-as-a-Service (SaaS) – Companies that deliver software applications over the Internet enabling other companies to conduct their operations using the application
The Index uses a modified equal weighted methodology called the Cloud Score Weighting). At every index evaluation, each security has its Cloud Score calculated by receiving a score for each category (IaaS, PaaS, and SaaS), 1 if it is operating in that category and 0 if it is not. The maximum score that can be achieved is a 6 (3 for IaaS, 2 for Paas, 1 for Saas). Each company’s total score is divided by the total sum of the scores in the universe to determine the weight of each security, and individual security weights are capped at 4.5 per cent.
Gregg Guerin, First Trust Senior Product Specialist, says: “Since launching FSKY on the London Stock Exchange in December, we have seen substantial interest from advisers and wealth managers alike, seeking ways to offer efficient strategies to meet the growing demand for the global public cloud market.
“Cloud company, Oracle, suggests that currently only 20 per cent of enterprise computing is in the cloud, and with Gartner forecasting that Public Cloud Services Revenue will grow from USD227.8 billion (November 2019) to USD354.6 billionn by 2020, we believe the cloud offers a great pure play, clear-cut growth opportunity.”
Also, Silvia Bosoni from Borsa Italiana, says: “We are delighted to welcome the new ETF of First Trust, innovative firm renowned in the factor-based ETF market, that today lists its FSKY on Borsa Italiana’s ETF-plus market, confirming the continuous growth of ETF-plus in the international economic landscape.”