3.3 C
Wednesday, December 6, 2023

4 Biggest Cybersecurity ETFs in 2023

As data breaches and cyberattacks rise, cybersecurity exchange-traded funds (ETFs) are gaining traction.

The term cybersecurity originated in 1989, and today is defined as the measures taken to protect a computer or computer system against unauthorized access or cyberattack threats. These measures can include people, policies and processes.

The number of security incidents is increasing every year, along with the costs companies must pay. In fact, according to a 2023 research report from IBM (NYSE:IBM), a single data breach event could cost an organization US$4.45 million — up 15 percent over the past three years and the highest cost in the 19 years since the first report was issued.

These threats are unlikely to fade anytime soon — in terms of the global cybersecurity sector, a Statista report published in mid-2023 suggests that the market could reach a value of US$583.3 billion by 2030.

There are multiple ways to invest in the cybersecurity market, but ETFs offer a low-cost way to enter the space. ETF fees and expenses are typically lower than those associated with mutual funds or other types of actively managed financial instruments. What’s more, ETFs provide exposure to a basket of stocks, meaning investors can spread their risk around.

According to ETF.com, there are seven cybersecurity ETFs listed in the US. Here’s a closer look at the top four cybersecurity ETFs by assets under management (AUM). All numbers and figures were current as of September 26, 2023.

1. First Trust NASDAQ CEA Cybersecurity ETF (NASDAQ:CIBR)

{“@context”:”https://schema.org”,”@type”:”Corporation”,”name”:”First Trust NASDAQ CEA Cybersecurity ETF”,”url”:”www.ftportfolios.com”,”description”:”The investment 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 CTA Cybersecurity Index TM (the \”index\”).\n The fund will normally invest at least 90% of its net assets (including investment borrowings) in the common stocks and depositary receipts that comprise the index. The index includes securities of companies classified as \”cyber security\” companies by CTA. The fund is non-diversified.”,”tickerSymbol”:”NASDAQ:CIBR:US”,”sameAs”:[]}

Company Profile

AUM: US$4.97 billion; current share price: US$44.68

Launched in July 2015, this ETF tracks the NASDAQ CEA Cybersecurity Index (INDEXNASDAQ:NQCYBR) and has 36 holdings. In total, 83.63 percent of the fund is allocated to US stocks, along with 5.86 percent to India-based stocks, 3.02 percent to French stocks, 2.78 percent to Japan-based stocks and 1.56 percent to UK-based stocks. Its expense ratio is 0.6 percent.

The First Trust NASDAQ CEA Cybersecurity ETF’s top cybersecurity stocks include Infosys (NYSE:INFY) at a 6.35 percent weighting, Fortinet (NASDAQ:FTNT) at a 6 percent weighting and Palo Alto Networks (NYSE:PANW) at a 5.83 percent weighting.

2. ETFMG Prime Cyber Security ETF (ARCA:HACK)

{“@context”:”https://schema.org”,”@type”:”Corporation”,”name”:”ETFMG Prime Cyber Security ETF”,”url”:”www.ise.com/”,”description”:”The investment seeks investment results that, before fees and expenses, correspond generally to the total return performance of the Prime Cyber Defense Index.\n The index tracks the performance of the exchange-listed equity securities of companies across the globe that (i) engage in providing cyber defense applications or services as a vital component of its overall business or (ii) provide hardware or software for cyber defense activities as a vital component of its overall business. The fund invests at least 80% of its total assets in the component securities of the index and in ADRs and GDRs based on the component securities in the index.”,”tickerSymbol”:null,”sameAs”:[]}

Company Profile

AUM: US$1.43 billion; current share price: US$50.66

The oldest cybersecurity ETF on this list is the ETFMG Prime Cyber Security ETF, which began trading in November 2014 and tracks the ISE Cyber Security Index (INDEXNASDAQ:HXR). It has 55 holdings with a 0.6 percent expense ratio. This ETF has had a 5.56 percent annualized return over the past five years, and is run by ETFMG, a lesser-known company among the goliath ETF managers.

The cybersecurity ETF’s top holdings include Splunk (NASDAQ:SPLK) at 5.48 percent, Akamai Technologies (NASDAQ:AKAM) with a 4.73 percent weighting and Check Point Software Technologies (NASDAQ:CHKP) at a 4.65 percent weight.

3. GlobalX Cybersecurity ETF (NASDAQ:BUG)

{“@context”:”https://schema.org”,”@type”:”Corporation”,”name”:”Global X The Global X Cybersecurity ETF”,”url”:”www.globalxfunds.com”,”description”:”The investment seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Cybersecurity Index.\n The fund invests at least 80% of its total assets in the securities of the underlying index and in American Depositary Receipts (\”ADRs\”) and Global Depositary Receipts (\”GDRs\”) based on the securities in the underlying index. The underlying index is designed to provide exposure to exchange-listed companies that are positioned to benefit from increased adoption of cybersecurity technology. The fund is non-diversified.”,”tickerSymbol”:”NASDAQ:BUG:US”,”sameAs”:[]}

Company Profile

AUM: US$602.5 million; current share price: US$23.77

The newest ETF on this list is the GlobalX Cybersecurity ETF. Founded in October 2019, it tracks a market-cap-weighted global index of companies selected based on revenue related to cybersecurity activities. This fund has an expense ratio of 0.51 percent.

The ETF’s top holding include Zscaler (NASDAQ:ZS), weighted at 8.72 percent, CrowdStrike Holdings (NASDAQ:CRWD) at 7.09 percent and Palo Alto at 6.52 percent.

4. iShares Cybersecurity and Tech ETF (ARCA:IHAK)

{“@context”:”https://schema.org”,”@type”:”Corporation”,”name”:”iShares Cybersecurity and Tech ETF”,”url”:”www.ishares.com”,”description”:”The investment seeks to track the investment results of the NYSE® FactSet® Global Cyber Security IndexTM.\n The fund generally will invest at least 80% of its assets in the component securities of the index and in investments that have economic characteristics that are substantially identical to the component securities of the index and may invest up to 20% of its assets in certain futures, options and swap contracts, cash and cash equivalents. The index is composed of developed and emerging market companies that are involved in cyber security and technology, including cyber security hardware, software, products, and services. It is non-diversified.”,”tickerSymbol”:null,”sameAs”:[]}

Company Profile

AUM: US$584.63 million; current share price: US$37.78

Last on this cybersecurity ETFs list is the iShares Cybersecurity and Tech ETF. Founded in June 2019, it tracks the NYSE FactSet Global Cyber Security Index (INDEXNYSEGIS:NYFSSEC), and has a focus on developed and emerging markets in the cybersecurity industry. This fund has an expense ratio of 0.47 percent.

The iShares Cybersecurity and Tech ETF has 38 holdings, including VMWare (NYSE:VMW), weighted at 4.57 percent, Qualys (NASDAQ:QLYS) at 4.49 percent and Akamai Technologies at 4.46 percent.

This is an updated version of an article originally published by the Investing News Network in 2018.

Don’t forget to follow us @INN_Technology for real-time news updates!

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

Source link

Related Articles

Latest Articles