With e-commerce, remote work, and an increasing number of internet-connected devices, the need for long-term cybersecurity is undeniable. This is an increasingly important area of technology that can offer investors significant growth opportunities. Researchers at Fortune Business Insights estimate that the global cybersecurity market will be worth over $376 billion by 2029, growing at a compound annual growth rate of over 13% until then.
A great way for investors to gain exposure to their industry is to First Trust Nasdaq Cybersecurity ETF (NASDAQ: CIBR). Exchange-traded funds (ETFs) are defined as “companies primarily involved in building, implementing, and managing security protocols applied to private and public networks, computers, and mobile devices to provide integrity protection. We are focused on investing in data and network operations.”
More than 40% of its holdings are in software companies, followed by 18% in IT service providers, 16% in telecommunications equipment and 11% in professional services businesses. Total holdings are 37, not an overly diversified ETF. But with a median market cap of over $8 billion, these aren’t the smaller, riskier companies in the fund.The top 3 stocks in the fund are Cisco Systems (NASDAQ: CSCO), broadcom (NASDAQ:AVGO), and infosys (NYSE:INFY), and each of these holdings represents more than 6% of the Fund’s total weight.
Year-to-date, the ETF is down 24%, but in the long run it could be a solid investment to benefit from the inevitable growth of cybersecurity products and services.
