Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

2 ETFs For Digitalization Trends 

By (Tezcan Gecgil/ )ETFsNov 27, 2020 09:33
2 ETFs For Digitalization Trends 
By (Tezcan Gecgil/ )   |  Nov 27, 2020 09:33
Saved. See Saved Items.
This article has already been saved in your Saved Items

2020 has become the year when digital trends have entered our lives faster than ever before. For instance, due to the pandemic, robust digital infrastructure and remote work arrangements have become vital.

Victoria State Government, Australia defines digital technologies as:

"Electronic tools, systems, devices and resources that generate, store or process data."

The range of digital technologies may include apps on our smartphones, social media, fintech applications, e-commerce, the internet of things (IoT), 3D printing, self-driving cars and drones.

Today we will introduce two exchange-traded funds (ETFs) that may be appropriate for long-term investors who want to benefit from increased digitalization.

1.Global X Cloud Computing ETF

  • Current Price: $25.36
  • 52-Week Range: $12.36 - $26.60
  • Expense Ratio: 0.68%

The Global X Cloud Computing (NASDAQ:CLOU) provides access to firms that could benefit from increased cloud computing adoption. Such companies may offer Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), Infrastructure-as-a-Service (IaaS). Some are data center real estate investment trusts (REITs). Yet others provide managed server storage space or cloud and edge computing infrastructure and hardware.

CLOU Weekly
CLOU Weekly

Metrics from Research And Markets highlight:

"The Global Cloud Applications market is expected to reach $472.92 billion by 2026 growing at a CAGR of 17.8% from 2018 to 2026... Factors such as increased use of advanced technology, low maintenance cost, and business expansions are driving the market growth.”

CLOU, which has 36 holdings, tracks the Indxx Global Cloud Computing Index. The fund started trading in late 2019.

The top ten businesses comprise around 42% of net assets of $1.3 billion. New Zealand-based Xero (ASX:XRO), which offers cloud-based accounting software, San Francisco, California-based Fastly (NYSE:FSLY) and Anaplan (NYSE:PLAN), provider of connected planning platforms, lead the names in the fund.

In terms of geography, 86% of the businesses are US-based, followed by New Zealand (4.4%), Canada (4.3%), China (3.5%) and the UK (1.8%). On a sectoral basis, information technology tops the list with 82.8%. Next are industrials and real estate (each 4.7%).

Since the start of the year, the fund has gone up 61% and hit a record high in October. Investors who believe in the future of cloud technologies as a solid long-term growth story could consider buying the dips. Any potential decline toward $24 or below would offer a better margin of safety.

2. ROBO Global Artificial Intelligence ETF

  • Current Price: $36.28
  • 52-Week Range: $24.16 - $37.29
  • Expense Ratio: 0.68%

The Robo Global® Artificial Intelligence ETF (NYSE:THNQ) gives access to global businesses developing the technology and infrastructure that enable artificial intelligence (AI).

THNQ Weekly
THNQ Weekly

Accenture defines AI as:

"A constellation of many different technologies working together to enable machines to sense, comprehend, act, and learn with human-like levels of intelligence."

Companies in the ETF include computing, data and cloud services as well as firms applying AI in different business processes, such as healthcare or e-commerce.

THNQ, which has 72 holdings from 16 countries, tracks the ROBO Global® Artificial Intelligence Index. The fund started trading in May 2020 and net assets are shy of $12 million.

International Data Corporation (IDC) suggests:

"Worldwide revenues for the artificial intelligence (AI) market, including software, hardware, and services, are expected to total $156.5 billion in 2020, an increase of 12.3% over 2019... Software is the largest AI technology group delivering roughly 80% of all AI revenue. Most of the software revenue comes from AI Applications ($120.4 billion in 2020) with AI Software Platforms ($4.3 billion) delivering the remainder."

About 20% of the holdings of the ETF are in the top ten businesses. Cloudflare (NYSE:NET), which provides digital infrastructure and security, genomic diagnostics group, Veracyte (NASDAQ:VCYT) and provider of conversational AI, Nuance Communications (NASDAQ:NUAN) head the list of businesses in the fund. They are all based in San Francisco, California.

In terms of sectoral breakdown, business process (18%), semiconductors (11%), big data/analytics (12%), e-commerce (11%), and cloud providers (10%) have the highest weighting.

Since its inception in May, the fund is up about 50%. As automated systems become smarter, we are likely to hear about developments in the AI space. We’d encourage investors to keep an eye on the names in THNQ.

2 ETFs For Digitalization Trends 

Related Articles

2 ETFs For Digitalization Trends 

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
Sign up with Email