A Quick Guide To Cybersecurity ETFs

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The cybersecurity industry has gained immense popularity in recent years and is the fastest-growing corner of the broad technology space. This is because cyber attacks on enterprises and government agencies are widespread with rapidly growing blockchain, IoT and 5G technology, raising the need for more stringent cybersecurity from hackers.

New mobile technologies have also increased mobile attacks, leading to a spike in protection against cyber threats. Additionally, we have seen years’ worth of digital transformation in months in the wake of the COVID-19 pandemic. The digital transformation has further increased the risk of security breaches and threats.

As a result, global spending on cybersecurity is growing each year and will continue to increase indefinitely. Gartner estimates the global information security market to grow at a five-year CAGR of 8.5% to $170.4 billion in 2022. According to Canalys, the worldwide cybersecurity market is poised to grow by 10% this year to $60 billion. Web and email security (12.5%) will grow the most, followed by vulnerability and security analytics (11%), data security (6.6%), and network security (8%).

Per Statista, spending on cybersecurity solutions is set to soar to nearly $250 billion by 2023. According to a study by Markets and Markets, the global cybersecurity market is projected to grow to $248.26 billion by 2023 from $152.7 billion in 2018 at a CAGR of 10.6%. North America is forecast to hold the biggest market size because of the presence of many key players and tech companies in the region. At the second spot is Europe, followed by APAC.

Investors seeking to tap the boom in the cybersecurity market could consider the following ETFs. We have highlighted them in detail below:

ETFMG Prime Cyber Security ETF (HACK - Free Report)

The fund provides global exposure to the cybersecurity industry, comprising companies that offer hardware, software, consulting and services to defend against cybercrime. It tracks the Prime Cyber Defense Index, holding 60 securities in its basket with each accounting for less than 3.5% share. The fund has amassed $2 billion in AUM and charges 60 bps in fees per year. Volume is solid as it exchanges nearly 283,000 shares in hand per day.

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