AI has seen a surge in interest in 2023, and there have been strong market gains associated with its emergence.
Despite its rapid evolution, the cutting-edge technology is still in the early stages – AI innovators are working out how to monetise their offering, and consumers are still considering how to utilise it.
But while the sector may face volatility in its adoption and development phase, we believe it is a theme that has the potential to reshape the global economy. It is a structural trend that investors should pay attention to.
One way to access this emerging trend is through cloud computing, such as with Europe’s first cloud computing ETF*, HAN-GINS Cloud Technology Equal Weight UCITS ETF (SKYY).
There are many reports noting that cloud usage is up, being driven by AI use. Technology consulting firm, Gartner, recently identified generative AI as a key driver of cloud growth. Gartner predicts a 20.4% growth in cloud investments in 2024 when compared to 2023.
HAN-GINS Cloud Technology Equal Weight UCITS ETF (SKYY) seeks to provide equal-weighted access to companies with significant exposure to cloud computing technology. The cloud technology ETF includes companies from three sub themes, Infrastructure as a service (IaaS), Platform as a service (PaaS) and Software as a Service (SaaS).
It is Europe’s only SFDR article 8 cloud computing ETF* and employs equal weighting to avoid overexposure to larger companies. Instead, the focus is on smaller, innovative companies that may better contribute to SKYY’s performance.
Gaining exposure to cloud technology can be seen as a “picks and shovel” approach. We see AI and the cloud as having a strongly mutually beneficial relationship, making the latter a potential way to access the AI theme.