PureFunds ISE Cyber Security ETF (HACK)
from The National Investor
PureFunds ISE Cyber Security ETF (HACK) is a fairly new ETF that has been rapidly growing in investor popularity, and for good reason. This new cyber-security ETF has already exceeded trading volume of a million shares daily. Its top five holdings include AhnLab Inc (053800.KS, 5.11% of assets); Infoblox Inc. (BLOX, 4.73%); FireEye, Inc. (FEYE, 4.62%); Fortinet, Inc. (FTNT, 4.46%); and The KEYW Holding Corporation (KEYW, 4.46%). Its mission, as the name implies, is to build and manage a portfolio that will "...correspond generally to the price and yield performance of the ISE Cyber Security™ Index. The fund will invest at least 80% of its total assets in the component securities of the index. The index tracks the performance of companies across the globe that are a direct service provider for cyber security and for which cyber security business activities are a key driver of the business, whose business model is defined by its role in providing cyber security services and for which cyber security business activities are a key driver of the business. ..”
One of the knocks against it is that there are some “old technology” companies represented; quite true. But when you check out the vitals of this ETF and look at the top holdings (FEYE is No. 2 and PANW is No. 7) it’s more dynamic than that. Go to http://www.pureetfs.com/etfs/hack.html for this and related information on the fund.
I have been a bit hesitant to add HACK due to my overall view that the stock market generally is top-heavy. Yet this is a theme and a rapidly-growing industry that, over time, will transcend short-term market moves.
So I am advocating you accumulate a portfolio position in HACK that will end up as a 3% exposure for growth-oriented investors, and 2% for more conservative ones. Recognizing the possibility that this current stock market rebound from January’s selling might be suspect, it would probably be wise to dollar cost average into HACK, meaning plan a few different purchases (unless you see it, and the market generally, start to really scorch higher.)
Chris Temple, The National Investor, www.nationalinvestor.com, 847-986-6320, February 5, 2015