The PureFunds ISE Cyber Security ETF (NYSEArca: HACK), the first exchange traded fund dedicated to the fast-growing cyber security space, is just over a year old and at this point it is fair to call the ETF, which is home to more than $1 billion in assets under management, a legend.
HACK’s legendary status has also opened the door for leveraged cyber security ETFs. The pioneers in that group are the Direxion Daily Cyber Security Bull 2X Shares (NYSEArca: HAKK) and the Direxion Daily Cyber Security Bear 2X Shares (NYSEArca: HAKD).
HAKK and HAKD seek to deliver twice the daily returns and double the daily inverse returns of the ISE Cyber Security Index, HACK’s underlying index.
HACK’s index “tracks the performance of companies actively engaged in providing services for cyber security and for which cyber security business activities are a key driver of their business model. These cyber security services are designed to protect computer hardware, software, networks and data from unauthorized access, vulnerabilities, attacks and other security breaches,” according to PureFunds.
“HAKK charges 99 basis points and has accrued $3.7 million since launching September 16. HAKD charges 80 basis points and has gathered $4.1 million,” according to CNBC.
“The average cost of the most severe online breaches for large companies now starts at about $2.24 million, up from about $921,000 last year,” reports Rachel King for the Wall Street Journal.
That is bad news for companies and organizations that are victimized by nefarious hacks, but as its Wednesday performance shows, it is good news for HACK. The ETF, which in its brief history has shown a penchant for responding to an array of cyber security-related headlines, is up 2.2% today and earlier touched an all-time high. Volume in HACK is more than double the daily average. [Volume Soars in Cyber Security ETF]
While HACK may be seen as a niche ETF or a “satellite holding,” the long-term merit of the cyber security investment theme is irrefutable. For example, cyber crime will cost $2 trillion by 2019, according to Juniper Research, indicating that demand for the products and services offered by HACK’s 31 holdings will surge. [North Korea Hates This ETF]
PureFunds ISE Cyber Security ETF
