We have lamented the lack of trading volume in the marketplace at least when measured by some of the largest ETFs such as SPY (SPDR S&P 500, Expense Ratio 0.09%) which has traded below its average daily volume for the past ten sessions.
But even during this rather slow week in late February, a newer ETF to the U.S. listed landscape has bucked this trend and has actually seen an large uptick in activity this week, HACK (PureFunds ISE Cyber Security, Expense Ratio 0.75%).
The fund debuted in November of last year, but has already picked up an impressive $305 million in assets under management while seeing its average daily trading volume climb to more than 301,000 shares lately. The fund itself is broadly categorized in the “Technology” sector from a general standpoint, but more specifically we see ETFdb.com for example tagging it as “Internet Architecture” based on its internal design and holdings.
As noted in fund literature, HACK is “The World’s first Cyber Security ETF” and the fund is predicated on the concept that both corporations and governments have devoted more spending to combating cyber-attacks, and thus the specific sub-sector within Technology may flourish.
According to fund literature, “Given the devastating effects cyber attacks can present, it is no coincidence that both corporations and governments around the globe have committed billions of dollars annually in hopes of preventing future attacks.
This ongoing digital arms and defense race has vastly grown the size and importance of the Cyber Security industry. This constantly evolving battle will force efforts and capital to focus on this essential space. An
increased spending and demand for cyber security solutions may benefit the always morphing Cyber Security Industry.”
Currently we see thirty holdings in the underlying index, the ISE Cyber Security Index and a modified equal weighted approach so as to periodically re-balance the holdings back to even weight. Top individual holdings are AHNLAB Inc. (5.11%), BLOX (4.73%), FEYE (4.62%), FTNT (4.46%), and KEYW (4.46%) and the fund has exposure not only in U.S. domestically listed securities (>74% of the portfolio) but also notably to Israel (>12%), the Netherlands (>5.2%), and Japan (>3.9%).
Year to date, the fund has impressively seen nearly $200 million enter via creation activity as well as several 1 million plus share trading days occurring just earlier this week as the ETF has rallied to its highest levels since
inception.
PureFunds ISE Cyber Security ETF
For more information on Street One ETF market commentary and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com
Street One Financial is an educational/research firm utilizing the Broker Dealer services of Precision Securities, a FINRA registered Broker/Dealer.