BetaShares Global Cybersecurity ETF (ASX: HACK) could be a really good investment to consider for the long-term due to its underlying growth.
What is BetaShares Global Cybersecurity ETF (HACK)?
The idea is to get exposure to the world’s leading cybersecurity companies in a single ASX trade.
At the moment it represents a portfolio of 36 names, including some of the biggest in the world like Palo Alto Networks, Accenture, Crowdstrike, Okta, Cisco Systems, Cloudflare, Tenable, Splunk, VMware and Cyberark. But there are also some smaller names like Zix, Tufin Software Technologies, Ribbon Communications and so on.
It has an annual management fee of 0.67% per annum.
Around 91% of the portfolio is allocated to US-listed companies, though many of those will generate revenue globally. Israel (3.7%), Japan (2.5%) and France (2%) are the only other countries to offer meaningful weightings.
Why is it an exciting ETF to consider?
The sad fact is that there is an ever-growing need for elevated levels of cyber defence because of cybercrime. More and more of our personal information, work, education, communication, data and so on is done (or available) online.
Potential cybercriminals would love to be able to attack some of those aspects of our digital lives.
So the ‘good guys’ need to stay ahead. The world is spending hundreds of billions of dollars on cybersecurity, which is to the benefit of those HACK ETF companies involved.
For example, BetaShares points out that Palo Alto has tens of thousands of customers across more than 140 countries. It has a wide suite of enterprise-level, next generation firewalls.
VMware compliance and cyber risk solutions delivers technology and guidance which directly addresses the challenges of security and compliance in highly regulated environments. It has over 500,000 customers of all sizes, including, apparently, the entire Fortune 500.
Cyberark is a business that is focused on “privileged account security”. It is primarily used in the financial services, energy, retail and healthcare markets. Over 2,700 businesses use CyberArk to protect their high value assets.
Summary thoughts
BetaShares Global Cybersecurity ETF is full of essential businesses that are experiencing strong tailwinds. It’s no wonder the ETF has produced average returns per annum of 21.6% over the last five years, though past performance is not a reliable indicator of future performance.
As far as an industry goes, I think cybersecurity is one of the most compelling ones to be invested in.
