Specialist Investment Awards winner's interview: First Trust Cloud Computing UCITS ETF

Catching up with last year's winners

Investment Week
clock • 5 min read

First Trust's Cloud Computing UCITS ETF was the winner of the Best Specialist Technology ETF category at the Investment Week Specialist Investment Awards 2020.

The judges said the ETF provides good exposure to an exciting subset of technology, noting providing workers with the ability to work from home has become a strong support for the cloud computing thematic.

Here we speak to First Trust about the reasons behind the ETF launch, why cloud computing represents the next chapter in the innovation of the digital age and how the vehicle sits within the group's wider range.  

Why did you launch the First Trust Cloud Computing UCITS ETF and what are you trying to offer investors? How could the ETF fit in their portfolios?  

First Trust have always been pioneers of thematic investing, offering investors access to some of the biggest global megatrends since 2006.

The cloud computing theme has been available via our US domiciled fund since 2011 so, for us, it was a natural move to offer our European investors a UCITS vehicle providing cost-effective exposure to a technology which is impacting our everyday lives.  

Thematic investing essentially allows investors to focus on the structural forces or themes that will play out over the longer-term, shaping and revising competitive landscapes, but importantly to look past short-term market noise and uncertainties.  

Our Cloud Computing ETF provides a forward-looking, longer-term approach to unlocking the power of the cloud. For investors' portfolios, this ETF could act as a useful diversifier, a core technology or a large-cap US growth allocation or perhaps more broadly as pure play access to the cloud computing phenomenon.  

What do you see as the potential of this theme as an investment opportunity for investors?  

Continuing demand for remote access to data and online services has put cloud computing at the forefront of internet-based innovation. It represents the next chapter in the innovation of the digital age, capable of unlocking access to both future and emerging technologies.

The evolution of our reliance on the internet and the growing power of cloud computing has seen some of the world's biggest companies continuing to invest in this space, effectively making it comparable to a utility.

The global pandemic, various lockdown measures and the majority of organisations that have been forced to work from home have simply accelerated a shift in this theme that was already happening.  

The cloud is tapping into massive swathes of our economy and society, affecting how we use financial services and many of the fundamentals of everyday life.

From watching a TV show on Netflix to scanning a QR code at your local, using the cloud has become effortless.

The screen you look at is no longer dependent on the computer it is attached to, it is only constrained by the speed of your internet connection in terms of computing power and the memory storage it can access.

However, the future of the cloud is not just confined to computers, but in connecting industries spanning healthcare, driverless cars, artificial intelligence/virtual reality, smart homes and many more.

The emergence of cloud computing has been one of the most successful investment themes over the past decade, with Gartner forecasting $1trn in revenues by 2025. 

More on Specialist

Deep Dive: Thematics offer diversification but investors must consider bond sensitivity

Deep Dive: Thematics offer diversification but investors must consider bond sensitivity

‘Dedicated specialists’

James Baxter-Derrington
clock 06 April 2023 • 4 min read
European private equity yet to spend €270bn worth of capital

European private equity yet to spend €270bn worth of capital

Deployment of capital expected

Kathleen Gallagher
clock 04 January 2023 • 1 min read
Early-stage biopharma: An opportunity for strategic investment

Early-stage biopharma: An opportunity for strategic investment

Disproportionately smaller investment

Ali H. Munawar
clock 10 August 2022 • 4 min read