Global X launches pure-play Cybersecurity ETF on ASX
Global X ETFs has launched the Global X Cybersecurity ETF (ASX: BUGG), enabling Australians to invest in the rapidly growing cybersecurity industry. BUGG is currently the lowest-cost, pure-play ETF on the market covering this theme.[1]
BUGG tracks the Indxx Cybersecurity Index, which targets companies that derive more than 50% of their revenue from cybersecurity activities, including the development and management of security systems preventing cyberattacks to applications, computers, and mobile devices.
Evan Metcalf, CEO of Global X, said that as the world relies heavily on digital ecosystems, increased investment in cybersecurity is vital.
“BUGG invests in a well-diversified portfolio of companies that have the potential to generate significant value for investors by being at the forefront of cybersecurity. We are proud to bring this very important thematic ETF to Australian investors,” Metcalf said.
“Cybersecurity is a matter of personal, organisational, and national security. Australians have seen firsthand during the major Medibank and Optus data breaches how devastating cyberattacks and hacking can be.”
BUGG is aligned and more concentrated in cybersecurity industries than its competitor products. It invests only in companies and sectors that are relevant to the cybersecurity theme such as network security software, network security access policy software, and customer premises network security equipment.
“Importantly, the management fee of this ETF is just 0.47% per annum, which is very cost-effective considering its targeted investment in the world’s most prominent cybersecurity companies including Zscaler, Palo Alto Networks, and CrowdStrike,” Metcalf said.
Scott Helfstein, Head of Thematic Solutions at Global X said cybersecurity is a global issue, but domestic opportunities for exposure to this important theme are limited in many markets as is the case for Australian investors, so geographically diversifying is vital.
“There is very little overlap between BUGG and the S&P 500 and Nasdaq 100, with only five companies appearing in the three indices. All of which are less than 0.6% of the total index weighting – meaning many investors are likely missing out on growth of the cybersecurity industry if they are only exposed to broad US indices, even if it is tech-heavy like the Nasdaq.”
“BUGG can be used by investors in their portfolio as a pure-play thematic tilt towards this important megatrend, which is expected to rapidly develop over the coming years as investment in the space accelerates,” Helfstein said.
“The trends and figures are astounding. Global cyberattacks increased 38% from 2021 to 2022.[2] The average intrusion costs organisations more than $4 million.[3] The average breach takes 277 days to be identified and contained.[4] This implies there may be significant upside for broad industry growth.”
“Globally, there is heightened focus on identifying and managing these risks by organisations, with spending on cybersecurity solutions and services expected to reach US$219 billion in 2023, up 12.1% from 2022.[5] Cybersecurity is an important thematic which will continue to grow as cyberthreats become more prolific, alongside the development of more advanced technologies such as artificial intelligence (AI) and the cloud,” he said.
BUGG represents the 35th listed ETF from Global X and adds to the company’s suite of investor choices across a range of diverse asset classes including thematic, commodities, income and cryptocurrency. Global X now has more than $6 billion in assets under management.[6]
[1] As of Wednesday, 13 September 2023, the Global X Cybersecurity ETF (ASX: BUGG) has Australia’s lowest management fee for an ETF of its kind, charging 0.47% p.a.
[2] Check Point Research. (January 2023). Check Point Research Reports a 38% Increase in 2022 Global Cyberattacks
[3] IBM. (July 2022). Cost of a Data Breach Action Guide
[4] Ibid.
[5] International Data Corporation. (March 2023). New IDC Spending Guide Forecasts Worldwide Security Investments Will Grow 12.1% in 2023 to $219 Billion
[6] Assets under management as at September 2023, Global X
[7] Assets under management as at August 2022, Global X
[8] Assets under management as at June 2022, Mirae Asset Global Investments
