We continue our current series on the most promising exchange-traded funds (ETFs) this year for growth investors by featuring the relatively new and very much in vogue PureFunds ISE Cyber Security ETF (HACK). This fund is noteworthy in that it was the first one created to target the cybersecurity industry and the ETF is only slightly more than a year old.
This fund includes top cybersecurity firms and weights its holdings based on market cap to provide exposure to the biggest companies foremost. The cybersecurity industry seems poised for a strong performance, as cyber-attacks around the world are growing at an alarming rate that shows no sign of slowing. For that reason, the products and services of the companies that are represented in HACK probably will be in more and more demand going forward. Any time you hear about a big company having its cybersecurity compromised, that’s a sign that there is still more work for cybersecurity companies to do.
Despite this seemingly powerful trend, HACK has fallen 12.74% in the last 12 months. It has been tossed out along with most other growth-based investments lately, and it’s not clear that this really means the underlying companies are not good investments. And the ETF’s share price is up since its inception, and it could rise again in the coming months Assets managed for this fund clock in at about $775 million. It has an expense ratio of 0.75% and does not pay dividends.
As you might expect, this ETF is very much focused on technology. The top holdings in its portfolio include the biggest cybersecurity companies on the market: Cyberark Software (CYBR), 4.80%; Symantec (SYMC), 4.37%; AVG Technologies (AVG), 4.36%; Trend Micro, 4.35%; and Check Point Software (CHKP), 4.22%. In addition, investing in this subsector through an ETF brings diversity that buying individual stocks lacks.
If the idea of investing in this hot and relatively new sector seems attractive to you, PureFunds ISE Cyber Security ETF (HACK) provides one of the best ways to do so.
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As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.