ETF Update

A few ETFs we’re looking to add to portfolios.

HACK, CIBR

Conceptually I believe cyber security will only become more important.

High expense ratios – .64% & .60%

Decent returns although a short track record, CIBR came in on 7/7/2015 and HACK on 11/11/2015.

The article is over a year old, but why rewrite it, the information appears to still mostly be valid: http://www.etf.com/sections/features-and-news/key-differences-between-2-cybersecurity-etfs?nopaging=1

Total Assets:

CIBR – $564M

HACK – $1B

HACK has a lower cap threshold which has probably helped it out over the last few years, it has slightly outperformed CIBR and the market, if things aren’t as rosy, CIBR might have an edge.  But you’re investing in a highly volatile field, if you’re looking for conservative, you shouldn’t be investing in either of these.

XWEB

Expense ratio .35%

The fund seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P Internet Select Industry Index. The fund generally invests substantially all, but at least 80%, of its total assets in the securities comprising the index. In addition, it may invest in equity securities that are not included in the index, cash and cash equivalents or money market instruments, such as repurchase agreements and money market funds (including money market funds advised by the Adviser). The index represents the internet segment of the S&P Total Market Index (“S&P TMI”). The fund is non-diversified.

High performance, short track record.  1 year return is 39%, year to date is 13.61%!(As of 4/30/2018)

The top holdings I see are an eclectic mix of (mostly) known names that aren’t in the average portfolio.

Top 10 Holdings

Company                             % of Assets

MuleSoft Inc A                  2.20%

Pandora Media Inc          1.87%

Stamps.com Inc                  1.86%

NIC Inc                                  1.82%

Box Inc                                 1.81%

Okta Inc A                           1.79%

Etsy Inc                                 1.78%

Twilio Inc A                         1.77%

Match Group Inc              1.75%

Alarm.com Holdings Inc 1.74%

 

XSW

Expense ratio .35%

The fund seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of an index derived from the computer software segment of a U.S. total market composite index. In seeking to track the performance of the S&P Software & Services Select Industry Index (the “index”), the fund employs a sampling strategy. It generally invests substantially all, but at least 80%, of its total assets in the securities comprising the index. The index represents the software and services segment of the S&P Total Market Index (“S&P TMI”). The fund is non-diversified.

I know a few of the top 10 holdings, but obviously you’re not buying a Microsoft etf.

Top 10 Holdings

Company                                                             % of Assets

CommVault Systems Inc                                               1.08%

Travelport Worldwide Ltd                            1.01%

First Data Corp A                                              0.99%

Varonis Systems Inc                                        0.96%

Synchronoss Technologies Inc                    0.93%

Glu Mobile Inc                                                   0.93%

Science Applications International Corp 0.92%

Citrix Systems Inc                                             0.92%

Zendesk Inc                                                        0.90%

CoreLogic Inc                                                     0.90%

 

SKYY

Cloud computing ETF, another conceptual no brainer.  .60 expense ratio is high.  It’s biggest holding is NFLX… which I don’t usually think of when I think cloud computing.  Might be better off just buying something like IGM or XNTK.


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