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First Trust expands thematic ETF range with two launches – Investment Week

Posted: May 29, 2020 at 4:47 pm

The First Trust Nasdaq UCITS Cybersecurity ETF is based on the liquidity-weighted Nasdaq CTA Cybersecurity index

First Trust has expanded its thematic ETF range with the launch of two funds offering exposure to cybersecurity and biotechnology through a UCITS structure, available on the London Stock Exchange.

The First Trust Nasdaq UCITS Cybersecurity ETF (CIBR) and the First Trust NYSE Arca Biotechnology UCITS ETF (FBT) will each be accessible to investors for a total expense ratio of 0.6% and are rebalanced quarterly.

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CIBR is based on the liquidity-weighted Nasdaq CTA Cybersecurity index, to be included on which a security must be listed on a global stock exchange, hold a minimum market cap of $250m and have three-month average daily dollar trading volume of $1m. It must also have a minimum free float of 20%.

Alongside companies engaged in the cybersecurity segment of the technology and industrials sector, the index includes those primarily involved in the "building, implementation and management of security protocols applied to private and public networks, computers and mobile devices in order to provide protection of the integrity of data and network operations".

Re-evaluated semi-annually and rebalanced quarterly, each security is capped at 6% weighting and the index never holds more than five securities at this level.

Gregg Guerin, senior product specialist, said: "Cyber crime had already been on the rise but has been greatly accelerated by the Covid-19 crisis pushing millions of people to work remotely, the importance of a secure internet is now, more than ever, absolutely paramount."

Cameron Lilja, vice president and head of research and development for Nasdaq Global Indexes, said: "We are currently seeing enormous growth, exacerbated by the Covid-19 pandemic, in sophisticated technologies such as cloud computing, artificial intelligence, big data and analytics.

"This growth has been matched by an increasing requirement for effective cybersecurity solutions, and the Nasdaq CTA Cybersecurity index offers an effective method for tracking these trends."

FBT will track the NYSE Biotechnology index and is designed to track the performance of a cross section of 30 leading firms within the biotechnology industry, primarily involved in "the use of biological processes to develop products or provide services", including recombinant DNA technology, molecular biology, genetic engineering and genomics.

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Guerin said: "The outlook for investing here is positive with impending drug launches, cost-cutting efforts, an aging population, increasing health care spending, increased merger and acquisition activity as well as potential expansion into emerging markets."

Rupert Haddon, managing director and head of sales and distribution, added: "Cybersecurity and biotechnology are two of the world's fastest growing themes and we are incredibly excited to be adding to our suite of innovative thematic UCITS ETFs, which should give investors precise tools to better express their own investment beliefs."

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First Trust expands thematic ETF range with two launches - Investment Week

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