The current situation, with so many people in isolation, is leading to increased demand for cloud services says Dan Ives, Wedbush technology analyst and manager of the Wedbush ETFMG Global Cloud Technology ETF (NYSE Arca: IVES).
IVES focuses on global companies that are ‘undercover gems of cloud technology’ for global infrastructure-based cloud “enablers” that give investors direct access to the next USD800 billion to USD1 trillion in spending found in cloud technology, enterprise cloud, cyber security and 5G. The stocks in the ETF are small to mid-cap focused compared with competitors and is evident in the top 10 holdings of IVES versus other cloud related ETFs.
The figures show that, in normal times, at the moment, roughly 33 per cent of work loads are managed in the cloud. By 2022, the team behind IVES predicts it will be 55 per cent of workloads, and over the next four years, approximately 70 per cent of cloud spending will be seen in the small to mid-cap infrastructure players found in IVES.
Daniel Ives, the cloud expert tied to the IVES fund, is a Managing Director and Senior Equity Research Analyst covering the Technology sector at Wedbush Securities since 2018, and has 20 years of experience in covering software and the broader technology sector on Wall Street.
The IVES fund is the fifth product launched by ETFMG in its ‘disruptive technology’ investment theme and the first in-market collaboration between the two privately owned firms, ETFMG and Wedbush Securities. IVES was previously known as the ETFMG Drone Economy Strategy ETF, NYSE Arca: IFLY and was transitioned on 7 April.
Ives says: “I have covered technology stocks on Wall Street for 20 years over many different facets of technology but the most transformational trend I have seen is the cloud industry.”
The Covid-19 environment has boosted the use of Slack, Zoom and MicroSoft Teams, among others, all of which are facilitated by the cloud. “Some of the strongest secular trends ever seen, particularly in the Covid-19 environment, has been the shift to the cloud,2 Ives says. “There has been a massive shift to the cloud among enterprises that speak to the inception of the ETF and answers pent up investor demand for the next generation of cloud investing.”
Ives believes there is a major void not being filled for investors who want to play the cloud theme, with some 50 to 70 players facilitating this sectoral shift.
“It’s a big opportunity and I really wanted to parlay my institutional experience as an analyst and take that expertise and parlay it into the ETF, giving individual retail investors the opportunity to play this transformational theme,” Ives says.
“There is a lot of excitement for the launch, not just within ETFMG and Wedbush, but also across the broader landscape because of a strong appetite for the cloud.”
