Cybersecurity ETFs aim to provide investors exposure to businesses whose main sources of income are cybersecurity-related products and services. Other funds will have a wider reach into the aviation and military parts of the technology industry, but some may be extremely specialized and concentrate only on the hardware, software, and services connected to cybersecurity.
The cybersecurity industry increased by more than 40% in 2020, and I predict that growth will continue in 2022. The industry is indeed pricey at the moment, but a strengthening demand for services, extraordinarily accommodative monetary conditions, and a reviving world economy should all be positive signs. While keeping that in the back of your mind, let’s focus on 5 of the best cybersecurity ETFs that you can invest in as of now.
The Beste Cybersecurity ETFs
Volt Cloud & Cybersecurity Disruption – VCLO
The newest player in the cybersecurity market is Volt Cloud & Cybersecurity Disruption ETF (VCLO), which just made its debut on December 31, 2020. With little over $1 million of assets, it’s certainly more interesting to keep an eye on than to invest in right now, but since it’s such a novel approach, it should be kept in mind. Just the greatest beneficiaries of the technological disruption are the focus of VCLO. It is very concentrated, with just Snowflake and CrowdStrike receiving 40% of the assets. Additionally, another 25% of funds are put into the QQQ ETF.
In addition to the core stock holdings, it purchases protective put contracts on the QQQ to provide some downside protection while adding call option options on Snowflake and CrowdStrike to provide upside potential.
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Global X Cybersecurity – BUG
A qualifying component must generate at least 50% of its sales from cybersecurity operations in order to be included in BUG, a market cap-weighted portfolio. The creation and administration of security networks, systems, protocols. apps, mobile devices, and computers may be among them. The fund presently has 27 names.
Access to businesses in the vanguard of cybersecurity innovation is made available through IHAK. Targeting businesses that obtain at least half of their income from the cybersecurity sector, it has a rather wide scope. This might include businesses that create software or hardware, such manufacturers of network security tools, developers of It service providers, and network security software for the aerospace and military industries.
ETFMG Prime Cyber Security – HACK
The first cybersecurity exchange-traded fund, HACK, contains businesses with both indirect and direct ties to the industry. The fund utilizes equal weighting for each component within each do about as well as market cap weighting across the infrastructural provider as well as service provider categories. Since its inception in 2014, HACK has generated yearly returns of 15%.
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First Trust Nasdaq Cybersecurity – CIBR
Despite being second on the market, CIBR is now the biggest cybersecurity fund. It keeps tabs on businesses mainly engaged in developing, putting into practice, and managing security standards. Market capitalization & liquidity are both taken into account by the fund when allocating funds. About 40 names are represented in CIBR, with CrowdStrike, Okta, and Zscaler being some of the biggest holdings.
Conclusion
Since a number of years ago, consumers, businesses, and investors have placed a high priority on the cybersecurity industry due to the development of the work-from-home economy, the surge in online commerce, the emphasis on election security, and the impending danger of ongoing data integrity attacks. Therefore, you can expect to receive profitable returns by investing your money on the best cybersecurity stocks as of now.
