Cyber Security Etf

As cybercrime affects more individuals, businesses, and governments, the global cybersecurity market is projected to rise at a healthy compound annual growth rate (CAGR) of 10.0 per cent through 2027.

Investors interested in Cyber Security profiting from this trend should consider purchasing cybersecurity stocks through exchange-traded funds (ETFs). In young, fast-evolving markets, betting on individual stocks can be particularly risky. ETFs that invest in cybersecurity have diversification across the industry, avoiding the risks of picking individual winners.

The Global X Cybersecurity ETF (BUG), the First Trust NASDAQ CEA Cybersecurity ETF (CIBR), the iShares Cybersecurity and Tech ETF (IHAK), and the ETFMG Prime Cyber Protection ETF are four ETFs that trade in the United States that are centred on the cybersecurity field (HACK). As of February 2, 2021, the S&P Kensho Cyber Security Index showed that the sector outperformed the broader market with a total return of 33.0 per cent over the previous 12 months, compared to the S&P 500’s total return of 20.8 per cent. 2 Based on results over the last year, BUG is the best-performing cybersecurity ETF. Below, we look at the top three best cybersecurity ETFs. Both figures are current as of February 3, 2021.

Global X Cybersecurity ETF (BUG)

• • 66.1 per cent year-over-year output
  • 0.50 per cent expense ratio
  • Dividends are paid every year. 0.45 per cent yield
  • Average Daily Volume for the Last Three Months: 231,654
  • $266.4 million in assets under management
  • Date of Inception: October 28, 2019
  • Global X is the issuer.

The Indxx Cybersecurity Index, which measures the success of companies in cybersecurity Jobs, is followed by BUG.

The ETF invests in companies that are well-positioned to profit from the growing adoption of cybersecurity technology, such as companies that protect systems, networks, software, computers, and mobile devices. The fund invests in cybersecurity growth stocks from a variety of market capitalizations. Around three-quarters of its 28 holdings are in the United States, with the rest distributed across Israel, the United Kingdom, Japan, and South Korea. 4 CrowdStrike Holdings Inc. (CRWD), a holding company whose subsidiaries include cybersecurity platforms; Palo Alto Networks, Inc. (PANW), a network security solutions provider; and Zscaler Inc. (ZS), a cloud-based security software company, are among the top three holdings. 5

iShares Cybersecurity and Tech ETF (IHAK)

• Performance over a one-year period: 49.6%
• 0.47 per cent expense ratio
• Dividends are paid every year. 0.39 per cent yield
• Average Daily Volume for the Last Three Months: 127,119
• $348.1 million in assets under management
• Date of Inception: June 11, 2019
• iShares is the issuer.

IHAK is a multi-cap fund that invests in cybersecurity firms. The fund invests in cybersecurity and technology securities and monitors the NYSE FactSet Global Cyber Security Index. The ETF invests in companies that make hardware, software, products, and services related to cybersecurity. The fund’s 48 assets are nearly 80% concentrated in the United States, with the remainder in Israel, Japan, Canada, and Taiwan. 6 It invests in a combination of growth and value stocks, following a mixed approach. CrowdStrike Holdings class A shares, BlackBerry Limited (BB: TSE), a Canadian multinational that offers software and services, and Palo Alto Networks Inc.7 are among the fund’s top holdings.

First Trust NASDAQ CEA Cybersecurity ETF (CIBR)

• • 1-year performance: 48.1 per cent
  • 0.60 per cent expense ratio
  • Dividends are paid every year. 1.09 per cent yield
  • 735,500 average daily volume over three months
  • $3.5 billion in assets under management
  • Date of Inception: July 6, 2015
  • First Trust is the issuer.

CIBR is a multi-cap growth fund that invests in stocks listed in the United States. The NASDAQ CTA Cyber Security Index is used to measure the success of cybersecurity companies in the technology and industrials sectors. The Consumer Technology Association must classify each of the fund’s 41 assets as a cybersecurity firm, and they must have a minimum market cap of $250 million and meet certain liquidity criteria. 8 CrowdStrike Holdings class A shares, Zscaler Inc., and Cisco Systems Inc. (CSCO), a manufacturer of telecommunications and networking hardware and software, are among the top three holdings. 9

The statements, views, and observations presented here are for informative purposes only and should not be construed as personalized investment advice or recommendations to buy or sell any security or pursue any investment strategy. Although we believe the information given herein is accurate and complete, we cannot guarantee it. Our content’s viewpoints and tactics may not be appropriate for all investors. Since the market and economic conditions are constantly changing, all of our content’s comments, opinions, and analyses are current as of the date of publication and are subject to change without warning. The information is not intended to be a comprehensive examination of all relevant facts about any country, region, market, business, investment, or strategy.

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