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

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The First Trust NASDAQ Cybersecurity ETF (CIBR - Free Report) was launched on 07/06/2015, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Broad segment of the equity market.

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.

Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.

Index Details

The fund is sponsored by First Trust Advisors. It has amassed assets over $759.22 M, making it one of the average sized ETFs attempting to match the performance of the Technology - Broad segment of the 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.


Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.

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

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Vmware, Inc. (VMW - Free Report) accounts for about 6.51% of total assets, followed by Palo Alto Networks, Inc. (PANW - Free Report) and Cisco Systems, Inc. (CSCO - Free Report) .

The top 10 holdings account for about 46.64% of total assets under management.

Performance and Risk

The ETF return is roughly 18.13% and is up about 31.87% so far this year and in the past one year (as of 08/22/2018), respectively. CIBR has traded between $20.95 and $27.81 during this last 52-week period.

The ETF has a beta of 0.95 and standard deviation of 17.21% 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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