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The cybersecurity space has outperformed the broader tech space in recent weeks despite rising rate worries. The broader market tech ETF Technology Select Sector SPDR Fund (XLK - Free Report) has added about 4% past month while WisdomTree Cybersecurity Fund (CIBR - Free Report) is up 9.6% past month (as of Dec 8, 2023) (read: Here's Why Cybersecurity ETFs Are At a 52-Week High).
The second-quarter earnings season proved victorious for cybersecurity companies. In contrast, mega-cap tech stocks displayed mixed results. Given the recent surge in the adoption of AI technology, the need for cybersecurity becomes increasingly evident.
Cyberattacks are on the rise as an increasing number of companies across various sectors are integrating generative AI and other aspects of technology into their daily operations. One notable area of growth in cybersecurity spending is in cloud security products and services, underscoring the growing importance of securing cloud-based systems and data.
Probably this is why Themes ETFs recently launched a pureplay cybersecurity ETF, Cybersecurity ETF (SPAM - Free Report) . Let’s delve a little deeper.
Inside SPAM
The Themes Cybersecurity ETF (SPAM - Free Report) looks to track the Solactive Cybersecurity Index, which identifies the largest 35 companies by market capitalization in digital security software. The fund charges 35 bps in fees.
Crowdstrike Holdings (5.81%), Varonis Sys (5.71%) and Trend Micro (5.7%) hold the top three spots in the fund. United States (67.6%) takes the major share of the fund, followed by Israel (10.5%) and Japan (7.8%).
How Does It Fit In a Portfolio?
Total financial losses from cybercrime have increased 281% over the past five years to $10.3 billion in 2022 alone. These ongoing attacks boosted the demand for cybersecurity, per FBI Internet Crime Report, as quoted on Themesetfs.com. About 91% of business leaders believe a “catastrophic cyber event” is likely and are proactively tackling the matter by boosting their cybersecurity capabilities.
About 93% of business executives are already or considering using AI for cybersecurity operations, driving demand for digital security with $101.5 billion in projected spending by 2025 according to IBM Institute for Business Value, McKinsey & Company, as quoted on the issuer’s website. Increasing acquisition activity in the sector also benefits the sector.
Competition
There are several cybersecurity ETFs in the market. The fund CIBR is the largest in size with about $5.55 billion in assets, followed by ETFMG Prime Cyber Security ETFMG Prime Cyber Security Fund (HACK - Free Report) ($1.57 billion in assets) and iShares Cybersecurity & Tech ETF (IHAK - Free Report) ($698 million in assets). While the each of former two funds charge 60 bps, IHAK charges 47 bps in fees.
Among the existing funds, WisdomTree Cybersecurity Fund (WCBR - Free Report) charges the least, i.e. 0.45%. This is where the newbie can excel. The newly-launched SPAM charges much lower expense ratio of 0.35%. So, we do not expect SPAM to struggle much to make a killing.
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A New Cybersecurity ETF (SPAM) Hits the Market
The cybersecurity space has outperformed the broader tech space in recent weeks despite rising rate worries. The broader market tech ETF Technology Select Sector SPDR Fund (XLK - Free Report) has added about 4% past month while WisdomTree Cybersecurity Fund (CIBR - Free Report) is up 9.6% past month (as of Dec 8, 2023) (read: Here's Why Cybersecurity ETFs Are At a 52-Week High).
The second-quarter earnings season proved victorious for cybersecurity companies. In contrast, mega-cap tech stocks displayed mixed results. Given the recent surge in the adoption of AI technology, the need for cybersecurity becomes increasingly evident.
Cyberattacks are on the rise as an increasing number of companies across various sectors are integrating generative AI and other aspects of technology into their daily operations. One notable area of growth in cybersecurity spending is in cloud security products and services, underscoring the growing importance of securing cloud-based systems and data.
Probably this is why Themes ETFs recently launched a pureplay cybersecurity ETF, Cybersecurity ETF (SPAM - Free Report) . Let’s delve a little deeper.
Inside SPAM
The Themes Cybersecurity ETF (SPAM - Free Report) looks to track the Solactive Cybersecurity Index, which identifies the largest 35 companies by market capitalization in digital security software. The fund charges 35 bps in fees.
Crowdstrike Holdings (5.81%), Varonis Sys (5.71%) and Trend Micro (5.7%) hold the top three spots in the fund. United States (67.6%) takes the major share of the fund, followed by Israel (10.5%) and Japan (7.8%).
How Does It Fit In a Portfolio?
Total financial losses from cybercrime have increased 281% over the past five years to $10.3 billion in 2022 alone. These ongoing attacks boosted the demand for cybersecurity, per FBI Internet Crime Report, as quoted on Themesetfs.com. About 91% of business leaders believe a “catastrophic cyber event” is likely and are proactively tackling the matter by boosting their cybersecurity capabilities.
About 93% of business executives are already or considering using AI for cybersecurity operations, driving demand for digital security with $101.5 billion in projected spending by 2025 according to IBM Institute for Business Value, McKinsey & Company, as quoted on the issuer’s website. Increasing acquisition activity in the sector also benefits the sector.
Competition
There are several cybersecurity ETFs in the market. The fund CIBR is the largest in size with about $5.55 billion in assets, followed by ETFMG Prime Cyber Security ETFMG Prime Cyber Security Fund (HACK - Free Report) ($1.57 billion in assets) and iShares Cybersecurity & Tech ETF (IHAK - Free Report) ($698 million in assets). While the each of former two funds charge 60 bps, IHAK charges 47 bps in fees.
Among the existing funds, WisdomTree Cybersecurity Fund (WCBR - Free Report) charges the least, i.e. 0.45%. This is where the newbie can excel. The newly-launched SPAM charges much lower expense ratio of 0.35%. So, we do not expect SPAM to struggle much to make a killing.