Tag: ETF Investing Strategy

It's Time To Consider Cybersecurity ETFs

Posted on by Matt Thalman

If you are like me, each and every time I hear about another major cyber-attack, I kick myself for not buying one of the many cybersecurity Exchange Traded Funds years ago. So now with the Colonial Pipeline ransomware cyberattack still fresh on investors' minds, now is the time to make a decision on how you plan to play the cybersecurity industry since cyber attacks are an ever-growing threat and something that doesn’t appear to be going away anytime soon.

Let’s take a look at a few different cybersecurity ETFs you can invest in today and I will point out a few of the pros and cons of each.

First, we have the largest of the cyber-security ETFs, the First Trust NASDAQ Cybersecurity ETF (CIBR). CIBR has over $4 billion in assets under management and has been around since July 2015. The fund has an expense ratio of 0.60%, which is a little high compared to other ETFs but right in line for the cybersecurity ETFs as a whole. CIBR tracks a liquidity-weighted index that focuses on companies engaged in the cybersecurity industry. The fund primarily holds software and networking companies but does have a few other holdings that operate outside those two sectors. Currently, the fund has 40 positions with a weighted average market cap of $42 billion. CIBR also pays a dividend of 0.19%. (See Below for fund performance.)

Secondly, we have the ETFMG Prime Cyber Security ETF (HACK). HACK is the second-largest cybersecurity ETF with $2.32 billion in assets under management and has 58 holdings. Continue reading "It's Time To Consider Cybersecurity ETFs" →

Reduce Your SPAC Risk With SPAC Focused ETFs

Posted on by Matt Thalman

A lot of wild things happened in 2020, but from an investor’s perspective, the rise of the SPAC or Special Purpose Acquisition Company may be one of the longer-lasting events. The SPAC was all the rave in 2020 as investors were flooded with SPAC’s, SPAC mergers, and SPAC-related rumors about who was going to merge with whom.

From some perspectives, the SPAC is a very good thing; maybe not so much from others. Still, regardless the SPAC for a lot of companies, the SPAC was an easy, cheaper way to go public and raise funds for their organization without having to jump through the traditional IPO or initial public offering process.

Similar to the number of IPO Exchange Traded Funds, like the First Trust U.S. Equity Opportunities ETF (FPX) or the Renaissance IPO ETF (IPO), which offer investors a way to play recently IPO’d stocks, without having to purchase these stocks so after going public themselves. Investors also have a few ways to play SPAC’s without following them intently and tracking which mergers occurred and which ones have yet to close.

The first SPAC ETF that came to market was the Continue reading "Reduce Your SPAC Risk With SPAC Focused ETFs" →

A Few New ETFs That You Need To Know About

Posted on by Matt Thalman

New ETFs are constantly popping up; 32 new ETFs hit the markets in May 2021 alone. But, of course, not all months are quite that busy, and most of the news ETFs in the month didn't really represent "new" opportunities for investors since most of the new ETFs were similar to what is already available to investors, just by a new issuer.

However, a few ETFs introduced in May are a little different from the run-of-the-mill option and may be worth considering for your own portfolio. So let's take a look and see if any of them interest you.

The first one is something we all suffer from, from time to time, FOMO ETF (FOMO). This ETF is an actively managed fund that seeks long-term capital appreciation by holding all size equities, SPAC's, fixed income, volatility, and inverse volatility ETFs and ETNs. The fund managers will decide what to own based on the "fear of missing out" concept of buying what is currently "in favor" with retail, individual, and institutional investors. As a result, the fund managers have a wide range of where and how they can invest and complete control over investment timeframes. This fund will likely have high churn and potentially be rather volatile, but time will tell. FOMO has an expense ratio of 0.90%.

Next, we have the Bitwise Crypto Industry Innovators ETF (BITQ). This ETF invests in a modified market-cap-weighted index of global companies that support the crypto-asset-enabled decentralized economy. This fund is passively managed but still has an expense ratio of 0.85%. The ETF does not hold cryptocurrency itself, just a group of 30 companies worldwide that operate in that crypto industry in one form or fashion. Many would consider this ETF a back-door investment into the land of crypto-currency investing because it's likely that if crypto's rise in value, these companies will also see an increase in their share price. Continue reading "A Few New ETFs That You Need To Know About" →

The Ever-Growing Number Of ETFs and Their Power Over The Markets

Posted on by Matt Thalman

ETFs, like Mutual Funds and Index Funds, are often praised for their ability to offer exposure to ‘risky’ equities while offering portfolio protection and reducing single stock exposure issues.

The basic idea is that instead of trying to ‘cherry-pick’ a specific winner or loser in a particular industry or sector, you can just buy a sector-based exchange traded fund and reduce your risk that you chose the wrong company to be the dominant player in that industry. Furthermore, as long as the industry itself performs well, your industry-focused ETF should follow suit, and your investment will benefit.

As the demand for ETFs increases, the vast array of offerings has also been increasing. As an investor, you are no longer constrained to just buying industry or sector-focused funds. You can now buy funds that focus on pretty much any correlating data point imaginable. Those are the ones that have strict investment guidelines, unlike some ETFs that are actively managed and give the fund managers complete control and leeway to invest wherever and however they want.

Currently, there are over 2,500 actively traded Exchange Traded Funds in the US alone. There were 32 new ETFs offered to investors in May 2021 alone. Let’s think about that for a moment. Outside of the OTC or Over the counter equities available to investors with about 11,500 stocks in 2020, roughly around 6,000 companies’ investors can buy and sell stock in which are traded on the major US exchanges, the NYSE and the NASDAQ. Yes, that is correct, 6,000 US stocks and nearly half that in US ETFs. Continue reading "The Ever-Growing Number Of ETFs and Their Power Over The Markets" →

COVID Has Changed The World Forever

Posted on by Matt Thalman

In 20, 50, 100 years from now, historians will be writing books and articles talking about how the Covid-19 pandemic was a major turning point globally. While it is hard to say which direction the pandemic has turned the world, there is no doubt that it has changed the world. The same way World War II, the fall of the Soviet Union, the invention of the internet, the automobile, the Great Depression, the attacks on 9/11, the financial and housing crisis in 07-08 all changed the world in some way, this pandemic will do the same.

As an investor, this is very important to understand because it means that the way you should invest if you want to maximize returns and/or reduce risk could also change as you read this. You have to remember; we have been experiencing this pandemic for more than a year now, and most behavioral scientists will tell you that it takes about 6 months for habits to form fully. Whatever new habits people have picked up, or bad habits that were dropped during the past year, are probably here to stay.

For many, working from home is one of those “new” habits. It's going to be difficult for many Americans to work in a formal office setting 5 days a week in the future, since for more than 1 year now, they have been strictly working from home. The rise of at-home workouts provided by companies such as Pelton (PTON) has become a daily habit and shows signs that it is here to stay. More social media use more online shopping, fewer small retail stores that were shut down during the pandemic or just couldn’t survive and compete with the larger retail chains. People moving out of cities for more space or moving further south for warmer temperatures year-round. Continue reading "COVID Has Changed The World Forever" →