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3 Tech Upgrades for Your Portfolio

These ETFs can help you get into the hottest megatrends

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First Trust ISE Cloud Computing Index

FirstTrust185Cloud computing allows companies and individuals to use software by accessing the Internet. This results in lower costs because there is no need for buying infrastructure such as servers or hiring expensive consultants. The technology also has benefits like real-time access to data, which can be a competitive advantage for companies.

According to IDC, the cloud market is expected to grow to $72.9 billion in 2015 from its $21.5 billion tally in 2010, translating into a compound annual growth rate of 27.6%.

To play this massive tech trend, consider the First Trust ISE Cloud Computing Index (SKYY). This ETF is based on a proprietary index of 40 stocks, with a minimum market cap requirement of $100 million.

Its holdings include companies involved both in software and cloud infrastructure, such as Rackspace (RAX), Aruba Networks (ARUN), (CRM) and NetSuite (N), as well as larger, more diverse companies with some cloud computing offerings including Oracle (ORCL) and Google.

However, under its mandate, included stocks must be engaged in a “business activity supporting or utilizing the cloud computing space,” and that “utilizing” part also gives you holdings such as streaming video website Netflix (NFLX), social media site Facebook (FB) and game-maker Zynga (ZNGA).

SKY is a relatively new fund that is up just 11.5% since its inception a little more than two years ago, though it’s up nearly 24% in the past 52 weeks.

Expenses are a bit pricier than XLK at 0.6%.

Article printed from InvestorPlace Media,

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