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Sam Collins’ No. 1 Sector for 2013

SKYY was met with criticism when it launched in 2011, but it could provide investors with huge returns


First Trust ISE Cloud Computing Index Fund (NYSE:SKYY) — First offered publicly in July 2011, this ETF was met with criticism because of its narrow focus on one sub-sector of the technology group. But after an initial fall, it regained its footing and was up over 15% last year, and it is up 4.78% so far this month.

The 40 companies in the portfolio enable the investor to participate in the enormous potential of “cloud computing,” which leverages the Internet to store and deliver huge amounts of data at a fraction of the normal costs. Large, well-known companies like Apple (NASDAQ:AAPL), (NASDAQ:AMZN) and Google (NASDAQ:GOOG) are represented in the portfolio, along with a number of smaller, high-beta stocks that have equal representation with the big boys of technology.

This ETF is, admittedly, not for everyone. But for those who want to be on the cutting edge of a relatively new technology boom, this investment could provide a huge return for its 0.6% expense ratio.

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