Download ETF VENTURES Cloud Computing

ETF VENTURES
Cloud Computing
• ISE Cloud Computing Index (CPQ)
• First Trust ISE Cloud Computing Index Fund (SKYY)
Take advantage
of short- and
long-term
economic
trends in cloud
computing.
DESCRIPTION
The ISE Cloud Computing™ Index has been created to provide investors with a product allowing
them to quickly take advantage of both event-driven news and long term economic trends as the
market for cloud computing technology continues to evolve.
METHODOLOGY
The Index uses a market capitalization weighted allocation across the pure play, non pure play and
technology conglomerate categorizations as well as an equal weighted allocation methodology for
all components within each sector allocation. Index components are reviewed quarterly for eligibility,
and the weights are re-set accordingly.
HISTORICAL INDEX LEVELS FOR CPQ (as of 12/31/2015)
400
STATS
Index Level
350
Components
300
34
250
Avg Market Cap
$101.50 Billion
200
Dividend Yield
150
1.11%
100
Current P/E
26.30
50
0
2008
2009
2010
2011
2012
2013
2014
2015
Price/Sales
2.75
Cashflow/Share
ISE Cloud Computing Index
ISE Cloud Computing Index
CLOSING PRICE LEVEL
TOTAL RETURN PRICE LEVEL
22.68
COMPONENT SELECTION
The following steps are taken to select the initial components for
the ISE Cloud Computing™ Index:
1 Establish total population of exchange listed common shares
and depository receipts for companies involved in the cloud
computing industry.
2 Categorize and remove companies that do not meet the
Component Eligibility Requirements.
3 If a component has multiple share classes, include the most
liquid issue for that company (using average daily value
traded during the prior six-month period) and remove the
remaining classes.
4 Tech Conglomerate aggregate weight is fixed at 10%.
Non pure-play and pure-play are market cap weighted in
aggregate.
5 Adjust each component’s weighting to an equal weight
within its sector’s aggregate weight.
6 Set liquidity thresholds:
J Repeat steps 8 through 10 until all component percentage
of average daily value traded is less than or equal to the
percentage average daily value traded threshold
Note that the index portfolio does not have a fixed number of
stocks and attempts to include every stock in the industry that
meets the eligibility requirements contained herein.
COMPONENTS (as of 12/31/2015)
Ticker
Name
Weight %
ATVI UQ
ACTIVISION BLIZZARD INC
0.93%
ADBE UQ
ADOBE SYSTEMS INC
0.92%
AKAM UQ
AKAMAI TECHNOLOGIES INC
3.93%
GOOGL UQ
ALPHABET INC A
4.01%
AMZN UQ
AMAZON.COM INC
4.08%
AAPL UQ
APPLE INC.
2.30%
CA UQ
CA INC
0.94%
CHKP UQ
CHECK POINT SOFTWARE (US)
0.86%
CSCO UQ
CISCO SYSTEMS INC
4.01%
 Set percentage of three month average daily value traded
threshold to 500%
EMC UN
EMC CORP
3.83%
EQIX UQ
EQUINIX INC
4.03%
 Set investment threshold to $100 million
FFIV UQ
F5 NETWORKS INC
3.84%
7 Determine component percentage of average daily value
traded given the investment threshold and the calculated
weight of the component.
8 If component percentage of average daily value traded
is less than the percentage average daily value traded
threshold then that weight does not need to be adjusted.
9 If component percentage of average daily value traded is
greater than the percentage average daily value traded
threshold then assign new component weight such that
percentage of average daily value traded is equal to the
percentage average daily value traded threshold using the
following steps:
FB UQ
FACEBOOK INC A
3.96%
HPE UN
HEWLETT PACKARD ENTERPRISE CO
2.65%
IBM UN
INTL BUSINESS MACHINES CORP
2.53%
INTU UQ
INTUIT INC
0.89%
JCOM UQ
J2 GLOBAL INC
0.95%
JNPR UN
JUNIPER NETWORKS INC
3.73%
MSFT UQ
MICROSOFT CORP
2.54%
NTAP UQ
NETAPP INC
3.53%
NFLX UQ
NETFLIX INC
3.72%
NTCT UQ
NETSCOUT SYSTEMS INC
0.88%
 Calculate component weight based on the investment
threshold and three month average daily value traded
threshold.
N UN
NETSUITE INC
4.12%
OTEX UQ
OPEN TEXT CORP
3.80%
ORCL UN
ORACLE CORP
3.79%
PLCM UQ
POLYCOM INC
0.88%
RAX UN
RACKSPACE HOSTING INC
3.84%
RHT UN
RED HAT INC
4.07%
SAP UN
SAP SE ADR
3.96%
CRM UN
SALESFORCE.COM
3.94%
TDC UN
TERADATA CORP
3.77%
VMW UN
VMWARE INC A
3.70%
WIT UN
WIPRO CORPORATION LTD ADR
0.87%
ZNGA UQ
ZYNGA INC. A
4.21%
 Calculate three month average daily value traded for each
component based on daily closing price and number of
shares traded
 Take the aggregate difference between the initial and
adjusted weights of those components where percentage
of average daily value traded is greater than percentage
average daily value traded threshold and distribute evenly
among stocks where percentage of average daily value
traded is less than percentage average daily value traded
threshold.
 Adjust weight of components with percentage of three
month average daily value traded less than the three
month average daily value traded threshold.
QUESTIONS?
online:
www.ise.com/etfventures
email: [email protected]
The ISE globe logo, International Securities Exchange®, ISE®, and ISE Cloud Computing™ Index are trademarks of the International Securities Exchange, LLC. The ISE Sector index
trademarks are the property of the International Securities Exchange, LLC. All other trademarks and service marks are the property of their respective owners. Copyright ©2015
International Securities Exchange, LLC. All rights reserved. All index values prior to 5/27/11 represent back-tested data [ETF-CPQ 0116]