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Should You Invest in the First Trust NASDAQ Cybersecurity ETF (CIBR)?

Zacks Equity Research
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Designed to provide broad exposure to the Technology - Broad segment of the U.S. equity market, the First Trust NASDAQ Cybersecurity ETF (CIBR) is a passively managed exchange traded fund launched on 07/06/2015.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.

Index Details

The fund is sponsored by First Trust Advisors. It has amassed assets over $695.01 M, making it one of the average sized ETFs attempting to match the performance of the Technology - Broad segment of the U.S. equity market. CIBR seeks to match the performance of the Nasdaq CTA Cybersecurity Index before fees and expenses.

The Nasdaq CTA Cybersecurity Index tracks the performance of companies engaged in the cybersecurity segment of the technology and industrials sectors.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.10%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Vmware, Inc. (VMW) accounts for about 6.33% of total assets, followed by Cisco Systems, Inc. (CSCO) and Symantec Corporation (SYMC).

The top 10 holdings account for about 45.45% of total assets under management.

Performance and Risk

Year-to-date, the First Trust NASDAQ Cybersecurity ETF has added about 15.41% so far, and is up about 23.93% over the last 12 months (as of 07/06/2018). CIBR has traded between $20.63 and $27.67 in this past 52-week period.

The ETF has a beta of 0.99 and standard deviation of 17.47% for the trailing three-year period, making it a medium risk choice in the space. With about 32 holdings, it has more concentrated exposure than peers.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.


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FT-NDQ CYBERSEC (CIBR): ETF Research Reports
 
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
 
Symantec Corporation (SYMC) : Free Stock Analysis Report
 
Vmware, Inc. (VMW) : Free Stock Analysis Report
 
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