THEMATIC ETF OF THE YEAR
WINNER: Global X Cloud Computing ETF (CLOU)
When it comes to a thematic ETF that hits a home run in its first at-bat, the focus needs to resonate and be easily understood to attract assets.
CLOU provides exposure to a market-cap-weighted global equity index of companies involved in the cloud computing industry. The ETF holds firms that license and deliver software over the internet by subscription, provide a platform to create software via internet, provide virtualized computing via internet, own or manage data centers, or make or distribute related hardware. Firms must have revenue of at least 50% from these activities to make the cut.
The fund’s underlying index also allows the inclusion of any firm that earns more than $500 million from such actions, regardless of revenue percentage. The index selects firms across the cap spectrum and in developed and emerging markets.
CLOU was launched in April 2019 and quickly attracted assets, now standing at $404 million even after some AUM slippage due to the March crash. And it’s pricey for a market cap equity ETF, with a 0.68% expense ratio. But with what’s unfolded in 2020 with the coronavirus, CLOU could be the ideal investment focus for the way people work in the future—in the cloud.
WINNER: ProShares S&P Technology Dividend Aristocrats ETF (TDV
The People’s Choice award is selected every year during the Pundit’s ETF Panel at the Inside ETFs conference. The panel features some of the best-known ETF experts arguing the case for what they believe to be the best new ETF to launch in the previous calendar year. The audience—consisting of industry, institutional and retail ETF fans, advisors and traders—votes on the winner.
At the conference this year, ETF.com’s Cinthia Murphy pitched the benefits of the ProShares S&P Technology Dividend Aristocrats ETF (TDV), which offers dividend-focused exposure to the S&P 500 Index’s technology sector, and the fund ultimately won the competition.
The key argument for TDV is that it offers exposure to the exciting but volatile technology sector, with an added quality screen in the form of the dividend requirement. The fund includes only companies from the S&P 500’s technology sector that have grown their dividends for at least seven consecutive years. That serves as a stabilizing force in a sector known for its wild swings—think growth meets income.
When one competitor challenged TDV, arguing that the portfolio holds Mastercard and Visa among its top holdings, and that those aren’t really tech, Murphy replied, “You must still be writing paper checks if you think Visa and Mastercard aren’t tech companies.” The crowd went wild.