As has been reported throughout the financial media, including in this space earlier this week, changed the names and indexes for six ETFs that previously carried the PureFunds brand, including a popular ETF dedicated to cybersecurity stocks.
On Aug. 1, the first ETF to focus on cybersecurity stocks became the ETFMG Prime Cyber Security ETF (NYSEArca: HACK). The move, seen as controversial by many in the ETF space, also means HACK is trading with a new index.
As ETF Trends reported earlier this week, according to a statement from ETF Managers Group, Kris Monaco and Prime Indexes, his new company, are also providing new underlying indices on HACK and several other ETFs that previously traded as PureFunds products.
“Comprised of companies that offer hardware, software, consulting and services to defend against cybercrime, the ETFMG Prime Cyber Security ETF offers investors a transparent and efficient vehicle to invest in this burgeoning industry. The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Prime Cyber Defense Index,” according to ETFMG.
HACK holds 35 stocks and has $1.1 billion in assets under management. HACK previously tracked the ISE Cybersecurity Index. That index “uses a market capitalization weighted allocation across the infrastructure provider and service provider categorizations as well as an equal weighted allocation methodology for all components within each sector allocation,” according to Seeking Alpha.
On Demand Webcast: Why Commodity ETFs Should Be Part of Your Diversified Portfolio
Investors concerned about the swift index change can potentially find some relief in knowing that HACK’s new benchmark is similar to its old index.
“The Prime Cyber Defense Index breaks eligible companies into two categories – architecture and application providers. Total market cap of companies within each segment is used to determine the weighting of each of the two primary segments,” notes Seeking Alpha.
There is competition on the cybersecurity ETF space. For instance, the First Trust Nasdaq Cybersecurity ETF (NASDAQ: CIBR) is just over two years old and has $272.2 million in assets under management. That ETF holds 30 stocks and tracks the Nasdaq CTA Cybersecurity Index. CIBR’s top 10 holdings combine for almost half of the ETF’s weight.
For more information on the ETF industry, visit our current affairs category.