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

Catching up with last year's winners

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.

What is the methodology behind the construction of the product?  

The ETF is based on the ISE CTA Cloud Computing index. The index is a modified equal weighted index designed to track the performance of companies involved in the cloud computing industry and is a comprehensive, rules-based index designed to measure the performance of companies in the cloud computing industry.

To be included in the index, a company must meet stringent market cap, free float percentage and liquidity requirements.

A company must also be classified as a cloud computing company by the Consumer Technology Association. There are three categories cloud computing companies fall into:

• Software-as-a-Service (SaaS) - companies that deliver software applications over the internet enabling other companies to conduct their operations using the application

• Platform-as-a-Service (PaaS) - companies that deliver a platform for the creation of software in the form of virtualisation, middleware, and operating systems, which is then delivered over the internet

• Infrastructure-as-a-Service (IaaS) - companies which deliver cloud computing infrastructure, such as servers, storage, and networks, as an on-demand service.  

How does the ETF fit into the broader First Trust ETF range and what are your plans for the range in the future?  

At First Trust, we remain dedicated to identifying the strongest themes across industries and developing them into accessible investments for our investors.

We continue to provide new thematic ETFs enabling the better capture of powerful innovations and changes in portfolios.

Accessing the cloud computing phenomenon in a UCITS format has been driven by client demand (available in the US since 2011). In the US, we have more than 50 thematic funds, with the oldest dating back to 2006, highlighting our heritage in this space.

Our aim with our thematic offering is to continue to partner with our advisors to help develop long-term strategies, and create new solutions for clients' investment requirements.

The fruits of this labour have been realised with the launch of three thematic UCITS ETFs this January, which aim to provide pure play access to clean energy, 5G and international internet themes. These launches demonstrate our commitment to being one of the global leaders in thematic investing. 

However, thematic investing only forms part of our wider ETF offering. We are the largest active ETF issuer in the world. For us, we want to be able to offer investors access to this growing range of funds in a UCITS format.

Within this segment, we are looking to grow our range of systematic fixed income UCITS ETFs, where predominantly our peers offer passive solutions, we are growing our suite of active solutions, again driven by client demand.   

Click here to find out more about the 2020 Specialist Investment Awards.