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Though more than 15 dozen products were launched last year, one that surely deserves a special mention in the ETF world is the ISE Cyber Security ETF (NYSEARCA: HACK ). The fund has been a darling among investors thanks to a recent slew of cyber security breaches that have prompted companies to step up security spending. Cyber security breaches have been witnessed in almost every industry, with some of the big shot companies such as JPMorgan Chase (NYSE: JPM ), eBay (NASDAQ: EBAY ), Apple (NASDAQ: AAPL ), Starbucks (NASDAQ: SBUX ) and Adobe (NASDAQ: ADBE ) been among the victims this year. In fact, the U.S. government’s Office of Personnel Management, which stores data for more than 30 million people, witnessed a breach in April 2015, which itself explains the severity and extent of cyber crime. According to a report by McAfee, cyber crime cost the world economy $400 billion in 2014. Per KPMG, a professional services firm, cyber crime is expected to cost the world an enormous $560 billion per year . “In addition to financial losses, cyber attacks have the ability to shut down or manipulate energy infrastructure, weapons defense systems, medical devices, financial markets, transportation networks/vehicles, or harvest highly personal or secret information and a constantly growing amount of other potential threats,” as explained by Pure Funds . This menace has prompted companies to commit billions of dollars annually in hopes of preventing future attacks which in turn is acting as a major tailwind for the U.S. cybersecurity industry. Rampant cybersecurity breaches and the success of cybersecurity stocks have led to a massive inflow of assets into HACK, with the product having recently crossed the $1 billion threshold. In fact, the success of HACK has prompted other issuers to come out with funds focusing on this niche space. Below, we have lighted HACK in detail for investors willing to try their hands in this ultra popular ETF. Launched last November, the fund tracks the ISE Cyber Security Index. The index tracks the performance of companies actively engaged in providing services for the cybersecurity industry. These cybersecurity services are designed to protect computer hardware, software, networks and data from unauthorized access, vulnerabilities, attacks and other security breaches. The equal weighted fund presently holds a basket of 31 stocks, with Intralinks Holding (NYSE: IL ), Vasco Data (NASDAQ: VDSI ) and Proofpoint Inc. (NASDAQ: PFPT ) being the top three holdings, each holding a little more than 4% of total fund assets. As far as the sub-industry breakdown is concerned, the fund allocates nearly 60% of its assets in Systems Software, 16% in Communications Equipment, followed by 8.4% in Internet Software & Services. Also, more than two-thirds of the fund’s holdings belong to U.S. companies, followed by 13% from Israel, 5% from the Netherlands and 4.7% from South Korea. The fund charges 75 bps in fees. It trades in solid volumes of more than 800,000 shares a day resulting in a narrow bid/ask spread. HACK has returned a solid 24% this year and roughly 30% since its inception. Originally published on Zacks.com . Scalper1 News
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