Invest with an Edge

03/14/2017 7:00 am EST


Ron Rowland

Editor, All Star Fund Trader

With nearly everything imaginable now controlled by computers and the “Internet of Things” connecting them all together, the world has never been more vulnerable to cyber attacks. 

Defending against these attacks is a lucrative and growing business, and there are now exchange-traded funds targeting this industry. 

For my money, the First Trust Nasdaq Cybersecurity ETF (CIBR) is the obvious choice among cybersecurity ETFs. Launched on 7/7/15, the ETF tracks an index of companies engaged in the cybersecurity segment of the technology and industrials sectors. 

It includes companies primarily involved in the building, implementation, and management of security protocols applied to private and public networks, computers, and mobile devices in order to provide protection of the integrity of data and network operations. 

Its top-five holdings are Symantec (SYMC) 7.5%, Cisco Systems (CSCO) 7.2%, VMware (VMW) 6.9%, Palo Alto Networks (PANW) 5.3%, and Gemalto (GTO.NA) 4.0%. 

CIBR has $188 million in assets, holds 30 stocks, and has an expense ratio of 0.60%. Since its 2015 launch, CIBR has an annualized return of +3.4%, a standard deviation of 19.6%, and a maximum drawdown of 31.1%. 

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