Monday was Cyber Monday and with the holiday shopping season officially here, investors are focusing on destinations such as consumer discretionary and retail stocks and exchange traded funds.
Cyber security stocks and the PureFunds ISE Cyber Security ETF (NYSEArca: HACK) merit a place in that conversation as well.
The PureFunds ISE Cyber Security ETF was the first cybersecurity-related ETF to hit the market back in November 2014. HACK reflects an index comprised of companies that offer hardware, software, consulting and services to defend against cybercrime.
PureFunds ISE Cyber Security ETF
HACK rose to acclaim for its often impressive responses to highly publicized data breaches. Cybersecurity-related ETFs have quickly gained a wide following after a number of high-profile cyber security breaches since the second quarter of 2014 involving companies such as Apple (NasdaqGS: AAPL), Tesla (NasdaqGS: TSLA), Starbucks (NasdaqGS: SBUX) and, on multiple occasions, the federal government.
As HACK matures and demand for cyber security products and services booms, the case for the ETF becomes more compelling. That includes the ETF’s credibility as an e-commerce play.
“We see a 16.8% compound annualized growth rate (CAGR) in Cyber Monday sales from 2005 to 2015. This year’s growth will only add to that total CAGR,” reports ETF Daily News. “Given the convenience, deep retailer discounts, and growing comfort level of consumers willing to shop online, I see this as a growth trend that’s only going to get bigger and bigger in the years to come.”
The technology sector and the relevant exchange traded funds have been recently been key contributors in helping the broader market ascend to new highs. Technology is the largest sector allocation in the S&P 500.
HACK benchmarks to the ISE Cyber Security Index, “which 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.
“Of course, with the continued growth of online shopping comes the continued threat of cyber-crime, and that means retailers and all kinds of companies with databases of customer information must beef up their defenses against cyber-attacks, and against what I call ‘Hacktivism,’” according to ETF Daily News.
For more information on the tech sector, visit our technology category.