PureFunds ISE Cyber Security ETF (HACK)

Cyber Security? The worst thing that has happened in this space is that they came up with an ETF for it. Whenever you see mutual funds and the ETF industry jump on an idea, you have to wonder if it is a little too late. This has some questionable positions in it. Palo Alto Networks (PANW-N) would be his 1^st choice, and Qualys (QLYS-Q) would be his 2^nd choice. You have to be careful because the idea of cyber Security is now embedded in a lot of the consulting and technology business already.

If you are marketing an ETF to the public, one of the great things you want to do is to play off of something that is in the news. This is a very narrow focus on a sector that is in the news. It is a higher risk on a very small segment of the market. He would prefer buying some of the companies rather than the ETF such as Palo Alto Networks (PANW-N) or CyberArk Software (CYBR-Q).

Cyber security. [Caller concerned about risks of an ETF failing] An ETF does not fail, but they could close it if it did not work. It costs $25k-$30k per year to run an ETF. You need about $8-10 Million in the ETF to just start making money. There is only $2 Million in it right now. It is a great strategy for playing that area. Concerns are that it does not pay much of a dividend and the sector is trading at a pretty high multiple.