An ETF that tracks an index focused on
cybersecurity companies
First Trust Advisors L.P. (“First Trust”) expects to launch a
new exchange-traded fund (“ETF”), the First Trust NASDAQ CEA
Cybersecurity ETF (NASDAQ: CIBR), on July 7, 2015. The fund seeks
investment results that correspond generally to the price and yield
(before the fund’s fees and expenses) of an equity index called the
Nasdaq CEA Cybersecurity IndexSM (the “index”).
Cybersecurity is gaining global attention following recent high
profile security breaches. With the heightened need for
cybersecurity solutions, First Trust believes this could be a
favorable time to invest in cybersecurity companies. The index is
designed to track the performance of companies engaged in the
cybersecurity segment of the technology and industrials sectors. It
includes companies 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.
“Along with the clear benefits of an increasingly interconnected
world comes the growing need to ensure the security of cyberspace,”
said Ryan Issakainen, CFA, Senior Vice President, Exchange-Traded
Fund Strategist at First Trust. “This presents significant
opportunities for companies involved with this task, many of which
are not represented in traditional index ETFs. We believe this ETF
provides a diversified, efficient way for investors to gain
exposure to this important theme.”
For more information about First Trust, please contact Ryan
Issakainen of First Trust at (630) 765-8689 or
RIssakainen@FTAdvisors.com.
About First Trust
First Trust Advisors L.P., along with its affiliate First Trust
Portfolios L.P., are privately-held companies which provide a
variety of investment services, including asset management and
financial advisory services, with collective assets under
management or supervision of approximately $119 billion as of May
31, 2015 through unit investment trusts, exchange-traded funds,
closed-end funds, mutual funds and separate managed accounts. First
Trust is based in Wheaton, Illinois. For more information, visit
http://www.ftportfolios.com.
You should consider the fund’s investment objectives, risks,
and charges and expenses carefully before investing. Contact First
Trust Portfolios L.P. at 1-800-621-1675 or visit
www.ftportfolios.com to obtain a prospectus or summary
prospectus which contains this and other information about the
fund. The prospectus or summary prospectus should be read carefully
before investing.
ETF Characteristics
The fund will list and principally trade its shares on The
NASDAQ Stock Market LLC.
The fund’s return may not match the return of the Nasdaq CEA
Cybersecurity IndexSM. Securities held by the fund will generally
not be bought or sold in response to market fluctuations.
Investors buying or selling fund shares on the secondary market
may incur customary brokerage commissions. Market prices may differ
to some degree from the net asset value of the shares. Investors
who sell fund shares may receive less than the share’s net asset
value. Shares may be sold throughout the day on the exchange
through any brokerage account. However, unlike mutual funds, shares
may only be redeemed directly from the fund by authorized
participants, in very large creation/redemption units.
Risks
The fund’s shares will change in value, and you could lose money
by investing in the fund. One of the principal risks of investing
in the fund is market risk. Market risk is the risk that a
particular stock owned by the fund, fund shares or stocks in
general may fall in value. There can be no assurance that the
fund’s investment objective will be achieved.
The fund may invest in small capitalization and mid
capitalization companies. Such companies may experience greater
price volatility than larger, more established companies.
An investment in a fund containing securities of non-U.S.
issuers is subject to additional risks, including currency
fluctuations, political risks, withholding, the lack of adequate
financial information, and exchange control restrictions impacting
non-U.S. issuers. These risks may be heightened for securities of
companies located in, or with significant operations in, emerging
market countries. The fund may invest in depositary receipts which
may be less liquid than the underlying shares in their primary
trading market.
The fund may hold investments that are denominated in non-U.S.
currencies, or in securities that provide exposure to such
currencies, currency exchange rates or interest rates denominated
in such currencies. Changes in currency exchange rates and the
relative value of non-U.S. currencies will affect the value of the
fund’s investment and the value of fund shares.
Information technology companies and cybersecurity companies are
generally subject to the risks of rapidly changing technologies,
short product life cycles, fierce competition, aggressive pricing
and reduced profit margins, loss of patent, copyright and trademark
protections, cyclical market patterns, evolving industry standards
and frequent new product introductions. Cybersecurity companies may
also be smaller and less experienced companies, with limited
product lines, markets, qualified personnel or financial
resources.
Industrials companies are subject to certain risks, including
the general state of the economy, intense competition,
consolidation, domestic and international politics, excess capacity
and consumer demand and spending trends. In addition, they may also
be significantly affected by overall capital spending levels,
economic cycles, technical obsolescence, delays in modernization,
labor relations, government regulations and e-commerce
initiatives.
The fund is classified as “non-diversified” and may invest a
relatively high percentage of its assets in a limited number of
issuers. As a result, the fund may be more susceptible to a single
adverse economic or regulatory occurrence affecting one or more of
these issuers, experience increased volatility and be highly
concentrated in certain issuers.
The fund currently has fewer assets than larger funds, and like
other relatively new funds, large inflows and outflows may impact
the fund’s market exposure for limited periods of time.
Nasdaq®, Nasdaq OMX® Consumer Electronics Association, and
Nasdaq CEA Cybersecurity IndexSM are registered trademarks of The
NASDAQ OMX Group, Inc. and Consumer Electronics Association, (which
with its affiliates is referred to as the “Corporations”) and are
licensed for use by First Trust Advisors L.P. The fund has not been
passed on by the Corporations as to its legality or suitability.
The fund is not issued, endorsed, sold, or promoted by the
Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO
LIABILITY WITH RESPECT TO THE FUND.
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First TrustRyan Issakainen, (630)
765-8689RIssakainen@FTAdvisors.com