Daily ETF Watch: Sons Of ‘HACK’ On The Way

May 05, 2015

PureFunds, the brains behind the PureFunds ISE Cyber Security ETF (HACK), is looking to enhance its technology cred with plans for two more funds focused on the tech space as a follow-on to the exceedingly well-received HACK.

 

HACK has racked up around $650 million in assets under management since its November 2014 launch. It is being used by asset-allocation-minded advisors who are integrating the ETF into portfolios they manage because they think broader tech ETFs are light when it comes to cybersecurity exposure. PureFunds, known for its niche strategies, hopes to tap in to underexplored facets of technology.

 

The new PureFunds ETFs and their strategies are as follows:

  • PureFunds ISE Information Technology ETF, which will target “InfoTech” companies that offer applications and solutions for purposes of information management and analysis or provide aggregate data via their services
  • PureFunds ISE Consumer Technology ETF, which appears to be a very broad approach by focusing on companies that provide support in terms of infrastructure, software and services that assist in the manufacture, delivery or financing of consumer tech products

 

Global, Emerging & Developed

The underlying indexes of the funds will select their components from emerging as well as developed markets.

 

They will also use a modified market-capitalization-weighting methodology that, among other restrictions, caps the weights of individual components at 24 percent of the index. Companies with weights greater than 5 percent of the index, meanwhile, must not represent more than 50 percent of the index in aggregate.

 

This seems reasonable, given that the minimum required market capitalization for inclusion in the indexes is a mere $100 million; large companies could easily overshadow the other holdings.

 

Both funds are slated to launch on the NYSE Arca, but the filing did not include tickers or expense ratios.

 

 

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