The ETF focuses on both hardware and software firms and providers of cybersecurity services.

Targeting a new growth area in emerging technologies, Factor Advisors, a subsidiary of ETF Managers Group, in partnership with PureFunds and ISE ETF Ventures launched Wednesday what it says is the first cybersecurity exchange-traded fund.

The PureFunds ISE Cyber Security ETF (HACK) seeks to replicate the price and yield performance of the ISE Cyber Security Index, which tracks 30 companies that are immersed in protecting critical cyber infrastructure.

The fund has an annual expense ratio of 0.75%.

Christian Magoon, founder of YieldShares and consultant to ISE ETF Ventures, told ThinkAdvisor in a Wednesday interview that the new cybersecurity fund focuses on companies that offer infrastructure, software and hardware, as well as firms that offer consulting and monitoring of cyber risks “by actual people.”

Magoon says that “traditional indexes don’t delineate these types of services,” but instead lump them under such categories as communication equipment, internet software and service, or a systems software company “like those that provide VPN software.”

The 30 companies tracked by the ISE Cyber Security Index specialize in “services designed to protect computer hardware, software, networks and data from unauthorized access, vulnerabilities, attacks and other security breaches,” Magoon says.

While most of the 30 companies in the index are based in the U.S., others hail from Israel, Japan and the Netherlands.

Magoon says that advisors see the new cyber ETF offering as “adding diversification” to their tech portfolios. Cybersecurity is an area where “people can’t afford not to spend [money] on,” Magoon says. “Even if we see tech spending decrease, it will have less of an impact on these cybersecurity companies.”

The top 10 holdings in the cyber ETF are: (VDSI US) VASCO Data Security Intl Inc 9.18%; (IMPV US) Imperva Inc. 7.91%; (QLYS US) Qualys Inc. 5.62%; (PANW US) Palo Alto Networks Inc. 5.45%; (SPLK US) Splunk Inc. 5.42%; (BLOX US) Infoblox Inc 5.23%; (PFPT US) Proofpoint Inc. 4.84%; (SAIC US) Science Applications International Corp 4.66%; (SYMC US) Symantec Corp 4.73%; and (CUDA US) Barracuda Networks.

Other emerging growth technology ETFs that have launched recently include the First Trust ISE Cloud Computing Index Fund (SKYY), which launched a couple years ago, the Global X Social Media Index ETF (SOCL), as well as the Robo-Stox Global Robotics & Automation Index ETF (ROBO).

— Check out Hacked: What to Do When Cybercriminals Hit Your Firm on ThinkAdvisor.