Billions for Well-Timed Cybersecurity ETF

Andrew Chanin, the 30-year-old founder of New York-based PureFunds, watched two of his first three ETFs fail before reaching Earth orbit. They liquidated because they couldn't gather enough assets to cover expenses. A third fund barely made it aloft; it still has just $3.6 million in assets. Chanin kept at it. In November, he launched the PureFunds ISE Cyber Security ETF. By July, The fund, listed as HACK, attracted $1.4 billion - one of the fastest ascents in ETF history (on Aug. 25, after two days of turmoil in the market, it had $1.2 billion). It got lift from a well-timed computer breach. Just 12 days after HACK started trading, news broke that malefactors had looted the computer network at Sony Pictures Entertainment, taking terabytes of data. There are 6,500 ETFs in the world, with $3 trillion of assets under management. A new one rolls out, on average, every business day. The industry is surging, for a variety of reasons. Like the cheapest mutual funds, almost all ETFs are driven by indexes. With such scant fees, it's hard to pay human managers, and, thanks to index evangelists like John C. Bogle, the founder of Vanguard, many people think managers aren't worth the money.