#What is the Neocloud ETF and How Is It Performing?
The Neocloud ETF from Roundhill Investments made its debut on August 6, quickly showing notable performance in the market. Within its first week on the Nasdaq, identified by the ticker NCLD, the actively managed fund surged by approximately 15%, achieving a remarkable $46 million in trading volume.
These figures are striking, especially for a new thematic ETF that launched with roughly $15.45 million in assets under management. The average daily trading volume has fluctuated between 570,000 to 620,000 shares, which translates into daily trading activities ranging from about $13 million to $14 million at share prices varying from $22 to $24.
#What Defines a Neocloud Company?
Neocloud refers to businesses that create platforms for GPU-as-a-Service and develop AI-optimized data centers targeted at high-performance computing tasks. Unlike traditional cloud service providers such as Amazon Web Services and Microsoft Azure, which deliver general computing services, neocloud firms focus on specific requirements for dense GPU clusters, crucial for effective AI model training.
The investment focus of the Neocloud ETF reveals where Roundhill sees substantial potential. Nebius Group, trading as NBIS, represents approximately 30.8% of the fund’s allocation, while CoreWeave, now listed as CRWV, takes up about 27.3%. Together, these two stocks constitute nearly 58% of the fund’s assets.
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#How Is the ETF Managed?
This ETF operates under an active management model with an expense ratio of 0.65%. This strategy allows the fund managers to concentrate investments on their strongest convictions rather than uniformly distributing capital across a wide range of holdings.
#Is There a Bitcoin Mining Link?
Notably, the Neocloud ETF includes businesses that previously operated in Bitcoin mining. Companies such as IREN, Hut 8, and TeraWulf have transitioned, at least partly, from cryptocurrency mining to concentrate on high-performance computing and AI-driven infrastructure.
Hut 8, symbolized by HUT, has reoriented itself into a varied computing infrastructure provider. Meanwhile, TeraWulf, marked as WULF, actively leverages its cost-effective energy resources to attract AI projects, and IREN has also adopted a similar route.
#What Other Funds Did Roundhill Launch?
The Neocloud ETF is not an isolated launch; alongside this fund, Roundhill introduced the Photonics & Optics ETF under the ticker LYTE. In the past, Roundhill also rolled out the Memory ETF, identified as DRAM. Early trading activity has shown as much as a 3.31% rise in the ETF value during one session, with intraday gains at times surpassing 13.66%.
#What Do Early Numbers Indicate?
The trading volume of $46 million for a fund with $15.45 million in assets under management reflects substantial activity and significant engagement from traders, which extends beyond typical buy-and-hold investors. The 0.65% expense ratio positions the fund competitively among actively managed thematic ETFs. However, having two stocks contribute to nearly 58% of the portfolio highlights potential volatility; adverse earnings reports from either Nebius Group or CoreWeave could adversely affect overall returns, despite the performance of the remaining assets in the fund.