What’s new in November?
Twelve exchange-traded funds that give investors a stake in investments ranging from cybersecurity firms to commodity futures. Here’s a close look at three that have hauled in $10 million or more apiece in under a month of trading in the stock market:
• PureFunds ISE CyberSecurity (ARCA:HACK) launched Nov. 12 and has marshaled $25 million in assets so far. It invests in 30 hardware- and software-oriented cybersecurity companies, both infrastructure providers and service firms.
The fund has about 86% of its assets allocated to the U.S., 9% to Israel, 4% to Japan and 2% to the Netherlands.
HACK has a 0.75% expense ratio. The top five holdings include Vasco Data Security (NASDAQ:VDSI),Imperva (NYSE:IMPV), Qualsys (NASDAQ:QLYS), Palo Alto Networks (NYSE:PANW) and Splunk (NASDAQ:SPLK).
“HACK’s unique portfolio offers exposure to companies that are virtually unowned by broad-based technology ETFs,” said Christian Magoon of Magoon Capital, a consultant on the new product.
The cybersecurity market has made headlines for the wrong reasons lately (cue data breaches at big banks and big-box retailers). But this niche ETF affords investors an opportunity to tactically play a segment that some see as increasingly important. Somewhat-related peers include First Trust ISE Cloud Computing Index Fund (NASDAQ:SKYY) and Nasdaq Internet Portfolio (NASDAQ:PNQI), both of which are slightly cheaper to own, with expense ratios of 0.60%.
HACK entails some concentration risk — its top 10 stocks account for 58% of portfolio weighting.
• Cambria Global Momentum (ARCA:GMOM) is a portfolio of diversified asset classes. That means domestic and foreign stocks, bonds, real estate, commodities and currencies. A fund of funds, GMOM shifts from one asset class to another based on volatility conditions and market cycles.
As such, it differs from equity-focused ETFs such as PowerShares DWA Momentum (ARCA:PDP) and iShares MSCI USA Momentum Factor (ARCA:MTUM). Both try to beat a broad benchmark index by holding stocks displaying higher momentum characteristics.
GMOM seeks to protect investors from emotional decision-making, said fund manager Meb Faber. He selects the 17 holdings out of a universe of roughly 50 ETFs.
“The fund attempts to achieve better than equity-like returns, while still having strict risk control methods,” Faber said.
Since its Nov. 4 launch, GMOM has gathered $17.6 million in assets. As an actively managed fund, it has a relatively high 0.94% expense ratio. By comparison, PDP and MTUM cost 0.65% and 0.15% in fees respectively.
• PowerShares DB Optimum Yield Diversified Commodity Strategy () listed Nov. 7 and has picked up $9.9 million since.
Another actively managed ETF, PDBC invests in 14 heavily traded commodity futures across the energy, precious metals, industrial metals and agriculture sectors.
“Broad-based commodity exposure like PDBC may help diversify a portfolio’s returns and improve investors’ overall risk-adjusted returns,” said Lorraine Wang, global head of ETF research for Invesco PowerShares.
PDBC expands PowerShares smart beta portfolios to a total of 82. It has a 0.59% expense ratio — less than peers such as PowerShares DB Commodity Index (ARCA:DBC) and iShares GSCI Commodity-Indexed Trust (ARCA:GSG).