What Is SKYY? First Trust Cloud Computing ETF

SKYY is the First Trust Cloud Computing ETF, a thematic technology fund launched in July 2011 that gives investors exposure to the cloud computing industry through a single ticker. It tracks the ISE CTA Cloud Computing Index, which screens for companies whose business is materially tied to cloud infrastructure, platforms, or software, then weights them in tiers so the largest holdings stay near 4 percent.

The fund is issued by First Trust Advisors and holds roughly 65 to 70 stocks. With about 2.8 billion dollars in assets as of mid-2026, it is one of the larger dedicated cloud ETFs, and its 0.60 percent expense ratio is standard for a First Trust thematic product.

Approximate weights as of mid-2026; refresh quarterly from First Trust Advisors's fund page. Each ticker links to its individual stock guide in Walnut.

SKYY spans the full cloud stack. Infrastructure and networking names like Arista Networks and DigitalOcean sit alongside platform and database companies such as Nutanix, MongoDB, and Cloudflare, plus the megacap cloud providers Amazon, Microsoft, Alphabet, and IBM. Because the index uses a tiered weighting, top holdings cluster near 3 to 4 percent each rather than being dominated by a few giants.

The top 10 positions make up roughly 37 percent of the portfolio, which is diversified for a single-theme fund. This structure means SKYY captures both established cloud infrastructure and faster-growing software names, so its returns reflect the broad cloud sector rather than the fortunes of one or two stocks.

The most common comparison is SKYY versus WisdomTree's WCLD. SKYY includes large megacap cloud providers and a range of market caps, tracking the ISE CTA Cloud Computing Index. WCLD is more of a pure-play software-as-a-service fund, roughly equal weighted and tilted toward smaller emerging cloud software companies. SKYY is larger and older, WCLD is more concentrated on the growth end.

Against a broad technology fund like XLK or a total-market index, SKYY is far narrower and more expensive at 0.60 percent. A broad fund gives you cloud exposure diluted across all of tech, while SKYY concentrates it. That focus can help in a cloud-led rally and hurt in a growth-stock drawdown.

SKYY's long history spans the 2020 to 2021 cloud boom, when accelerating enterprise cloud adoption drove strong gains, and the 2022 growth-stock reset, when rising rates hit high-multiple software names hard. That range shows the fund is cyclical and sensitive to interest rates and enterprise IT spending. The cloud and AI-infrastructure themes remain a structural tailwind, but valuations and rate expectations drive shorter-term swings.

The fund's tiered weighting and roughly 37 percent top-10 concentration mean returns track the broad cloud sector rather than a single winner. Its near-zero dividend means almost all return must come from price appreciation, which raises volatility compared with income-oriented or broad-market funds.

Whether SKYY fits depends on your goals, time horizon, and risk tolerance, and Walnut is not an investment adviser. SKYY offers focused, all-cap exposure to a durable technology theme, but it carries single-sector concentration risk, higher volatility than a diversified index, and a 0.60 percent fee that compounds over time. It also generates almost no income.

Many investors use a fund like SKYY as a small satellite position, a deliberate tilt toward cloud computing on top of a diversified core, rather than as a core holding. Consider how much single-theme technology risk you already carry through other holdings before adding it.

SKYY trades on the Nasdaq under its ticker, so you can buy it through Robinhood, Fidelity, Schwab, Public, or nearly any brokerage, including fractional shares where your broker supports them. Its roughly 2.8 billion dollars in assets and steady volume keep spreads tight and trading straightforward for retail investors.

If you want to hold SKYY as part of a stated investment thesis and track it next to your other positions, you can connect your existing broker to Walnut and follow SKYY inside a basket. Walnut tracks the theme and your alignment to target weights, while any actual trades stay at your broker.

ETFs are passive bundles; thematic baskets in Walnut let you concentrate within them. If you hold SKYY as a core position, these are the themes you might layer on as satellites.

SKYY gives concentrated, all-cap cloud computing exposure at a 0.60 percent fee, which is typical for a First Trust thematic fund but well above a broad tech index. Its tiered weighting spreads risk across many names instead of a few megacaps. Most investors treat it as a satellite or thematic tilt, not a core holding.

Whether SKYY is worth buying today depends more on your time horizon and what you already hold than on any single call. We walk through valuation, concentration, and what would have to be true for it to outperform from here in is SKYY a buy?

SKYY yields ~0.1% as of mid-2026, paid by passing through the dividends of its underlying holdings. For the payout schedule, history, and how the distributions are taxed, see SKYY dividend: yield and schedule.