CIG News – Why This Cloud ETF Could Work. News provided by Benzinga Tech, The tech sector is the category of the markets relating to the research & development and/or distribution of technological based services as well as goods.
The universe of cloud computing exchange traded funds expanded in significant fashion with the WisdomTree Cloud Computing Fund (NASDAQ: WCLD) being one of the newest additions to the group following its September launch.
WCLD, which follows the BVP Nasdaq Emerging Cloud Index, holds 48 stocks and although the fund is equally weighted, it features robust exposure to coveted software as a service (SaaS) space.
“Software companies and their shareholders tend to particularly align in support of the SaaS subscription-based revenue model,” WisdomTree said in a recent note. “While traditional software companies derive revenue from single, large and upfront transactions, cloud SaaS companies employ a recurring revenue model with smaller and more frequent transactions. The SaaS model is preferred, which can result in a more predictable, annuity-like revenue stream.”
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