A new exchange-traded fund may give investors a new way to profit from the growing number of cyberattacks and data breaches that plague U.S. companies.
The first cybersecurity ETF, the PureFunds ISE Cyber Security ETF, started trading Wednesday on the NYSE, and it is appropriately listed as "HACK."
The "HACK" ETF will track the ISE Cyber Security Index, which is composed of 30 companies that are focused on protecting against cybercrime. The ETF is aimed at giving investors a convenient way to play the space, said Christian Magoon, founder of YieldShares and a consultant to ISE ETF Ventures, which created the index the ETF tracks.
"What our analysts were able to do is actually look at companies and their underlying businesses and determine what kind of material efforts they have that are geared towards cybersecurity software, hardware and services and then use that data intelliegence to create the index of the 30 companies," Magoon said on CNBC's "Street Signs."
Magoon said the ETF is a defensive play given that spending on cybersecurity is only likely to increase.
"The underlying business driver is cybersecurity spending and it's a utility," Magoon said. "It's infrastructure of the Internet in today's digital age so you are not going to see corporations and governments decreasing their cybersecurity spending anytime soon."