The Benefits of Investing in First Trust Cloud Computing ETF for Long-Term Growth
Cloud computing has revolutionized the way businesses operate by allowing them to store, process, and access data on remote servers through the internet. With more companies transitioning to cloud-based operations, investing in cloud computing ETFs has become one of the most promising investment opportunities in recent times.
One such cloud computing ETF that is gaining popularity among investors is First Trust Cloud Computing ETF (SKYY). In this article, we will discuss why investing in SKYY is a wise decision for long-term growth.
High Growth Potential
The cloud computing industry is growing at an impressive rate, with a projected growth rate of 17.5% compound annual growth rate (CAGR) until 2026. Cloud computing services are in high demand, and the market is expected to reach $1 trillion in 2025.
SKYY invests in companies that provide cloud computing infrastructure, software, platforms, and services. With its unique focus on pure-play cloud computing companies, SKYY is well-positioned to gain from the cloud computing industry’s high growth potential.
Diversification
Investing in individual stocks can be risky, especially if you lack expertise in the industry or if you have limited funds. SKYY provides an opportunity for investors to diversify their portfolios and invest in a basket of cloud computing stocks.
SKYY holds 68 stocks, which include well-known companies such as Amazon, Microsoft, and Alphabet. The ETF’s diversification reduces the risks of investing in a single company while increasing exposure to the cloud computing industry’s growth potential.
Cost Efficiency
Investing in ETFs offers cost-efficient investment opportunities compared to investing in individual stocks. SKYY’s expense ratio is 0.60%, which is lower than the industry average of 0.68%.
Additionally, investing in SKYY is commission-free on several platforms, making it a cost-efficient investment option. Investors can also enjoy tax benefits by investing in ETFs, as they offer fewer taxable events.
Performance
SKYY has outperformed the market with impressive returns since its inception in 2011. From March 2020 to March 2021, the ETF provided a return of 79.58%, compared to the S&P 500’s 56.43% return.
Furthermore, SKYY’s returns have been consistent, with an average annual return of 21.29% over the past five years.
Conclusion
Investing in First Trust Cloud Computing ETF is the perfect option for those seeking high growth while minimizing risks. With the cloud computing industry’s impressive growth prospects, investing in SKYY provides an opportunity to capitalize on that growth without risking too much.
SKYY’s cost-efficient, diversified, and consistent performance makes it an attractive investment opportunity for long-term growth. Therefore, we recommend SKYY as a valuable addition to any investor’s portfolio.
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