David Wilson’s Jan 13, 2015 edition of Chart of the Day (below) illustrates the how the ISE Cyber Security Index has more than doubled the performance of the S&P since 2011. As profile breaches continue to make the headlines, I would expect businesses and consumers to continue to drive revenues at security product companies.
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Obama’s Cybersecurity Focus Fits Merrill Trade: Chart of the Day
By David Wilson
(Bloomberg) — President Barack Obama’s initiative to protect computer networks from hacking may benefit one of Bank of America Corp.’s 15 trading ideas for this year: buying shares of cybersecurity providers.
The CHART OF THE DAY tracks the performance of the ISE Cyber Security Index since 2011, when calculations begin. The industry barometer surged 148 percent through yesterday. That’s more than double the 68 percent gain for the Standard & Poor’s 500 Information Technology Index, as shown in the chart.
Barracuda Networks Inc., FireEye Inc., Palo Alto Networks Inc. and Proofpoint Inc. are among 31 stocks in the ISE index. All four advanced yesterday as Obama outlined a cybersecurity and identity-theft program he plans to highlight next week in his annual State of the Union address.
Obama’s remarks followed a Jan. 9 report by Michael Hartnett, chief investment strategist at Bank of America’s Merrill Lynch unit, that covered the 15 proposed trades. He recommended investments tied to the ISE index.
Hartnett, based in New York, wrote that cybersecurity is among the areas mentioned in the unit’s overview of investment themes, “A Transforming World.” He cited research by Sarbjit Nahal, a London-based analyst who specializes in socially responsible investing.
The ISE, a unit of Deutsche Boerse AG, introduced the cybersecurity index in November. The gauge is the basis for an exchange-traded fund from PureFunds, managed by Exchange Traded Managers Group LLC. The ETF has about $140 million in assets, according to data compiled by Bloomberg.
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Sincerely,
David Wilson
Reporter-at-Large, Bloomberg News
Stocks Editor, Bloomberg Radio
Author, Visual Guide to Financial Markets
