As online shopping increases ahead of the peak holiday season, cybersecurity is in the spotlight. And warnings are issued to advise consumers to beware of cyber attacks. For example, Cisco (NASDAQ ð suggests individuals should have “stronger passwords and apply the” smell test “to online offers that are too good to be true”.
The increased interconnection, especially since the start of the pandemic, has also resulted in a significant increase in cyber threats. Metric to suggest:
As a result, data protection has become crucial for businesses and consumers. Therefore, today we are featuring two cybersecurity exchange traded funds (ETFs) that might be suitable for a wide range of readers.
1. iShares ETF on Cyber ââSecurity and Technology
- Current price: $ 46.07
- 52 week range: $ 33.78 – $ 49.09
- Dividend yield: 0.13%
- Expense ratio: 0.47% per year
The global cybersecurity market is forecast grow from around $ 155 billion in 2020 to over $ 240 billion in 2025, implying a compound annual growth rate (CAGR) of around 11%.
In terms of Industries which rely on cybersecurity products and services, the government / defense sector has the largest share. Financial services followed, followed by manufacturing, and the information and communications technology sectors.
The IShares ETF on Cyber ââSecurity and Technology (NYSE ð invests in global cybersecurity companies that provide software, hardware, platforms and related services. The fund was listed for the first time in June 2019.
IHAK, which owns 41 holdings, tracks the performance of the NYSE FactSet Global Cyber ââSecurity Index. The top 10 names represent approximately 46% of net assets of $ 722.8 million. In terms of sectors, we see IT (88.85%), followed by industry (11.03%).
Cloud security platform Zscaler (NASDAQ:); Palo Alto Networks (NASDAQ :), known for its firewalls and cloud-based products; Fortinet (NASDAQ :), which offers both services and products; Juniper networks (NYSE :), which provides network security products and related software; and based in Japan Trend Micro (OTC ð lead the names on the list.
The ETF is up almost 14.2% this year and 35.5% in the last 12 months. It hit a record high on November 9. Since then, the fund’s shares have come under pressure and have lost around 6%. The fund’s P / E and P / B ratios are 28.87x and 7.56x. Interested readers would find better value around $ 44.
2. Simplify Volt Cloud ETF and Cyber ââSecurity Disruption
- Current price: $ 18.75
- 52 week range: $ 9.55 – $ 20.97
- Expense ratio: 0.95% per year
The Simplify Volt Cloud and Cyber ââSecurity Disruption ETF (NYSE ð is a thematic investment product managed by Simplify asset management, which offers a number of ETFs with option-based strategies.
VCLO focuses on companies that fund managers believe are among the most disruptive names in the cloud and cybersecurity. Then it improves exposure with call options on a number of stocks.
In addition to these long positions and calls, the fund also primarily buys out-of-the-money (OTM) put options to potentially protect the fund from a large sell-off in the tech equity market.
VCLO started trading in December 2020 and has $ 20.3 million in assets. In other words, this is a new and small ETF.
The top 10 holdings of equities represent over 67% of the fund. About 19.13% of the ETF is invested in the content delivery network Cloudflare (NYSE ð and an additional 9.68% is on SaaS-based data analytics platform Datadog (NASDAQ :). These two names are followed by Crowd strike (NASDAQ :), which provides cloud solutions; data analysis firm Palantir Technologies (NYSE:); and Microsoft (NASDAQ :).
Since the start of the year, the VCLO has returned more than 53.4% ââand hit a record on November 9. Since then, the fund has lost more than 10%. Investors looking to gain exposure to an ETF that, in part, uses an options strategy might want to dig deeper.