As more businesses utilize cloud computing, the increasing need to provide security for these cloud-based processes is becoming more vital, according to data from the latest SANS 2020 Cybersecurity Spending Survey. As such, ETF investors need to know these three funds to identify where the opportunities are in this growing space.
“The SANS survey showed that rapid movement of corporate services and business applications to cloud-based technology is the biggest factor causing breakage in existing security architectures as well as driving most new security spending,” said John Pescatore, SANS Director of Emerging Security Trends. “Cloud monitoring and cloud security access controls were the top two spending areas, followed by spending to increase security staff skills to deal with new technologies, such as the cloud, and to keep up with changes in regulations as well as new threats.”
A Trio of ETFs to Consider
For a cybersecurity tilt, ETFs to consider are the First Trust NASDAQ Cybersecurity ETF (NYSEArca: CIBR) and the ETFMG Prime Cyber Security ETF (NYSEArca: HACK).
First up, CIBR seeks investment results that correspond generally to the price and yield f an equity index known as the Nasdaq CTA Cybersecurity IndexSM. The index is comprised of securities of companies classified as “cyber security” companies by the CTA.
Next, HACK seeks investment results that correspond generally to the price and yield performance of the Prime Cyber Defense Index. The index tracks the performance of the exchange-listed equity securities of companies across the globe that (i) engage in providing cybersecurity applications or services as a vital component of its overall business or (ii) provide hardware or software for cybersecurity activities as a vital component of its overall business.
Keeping Investors’ Heads in the Cloud
An ETF to Consider for cloud computing is the Global X Cloud Computing ETF (Nasdaq: CLOU). The fund seeks to track the Indxx Global Cloud Computing Index, and holds a basket of companies that potentially stand to benefit from continuing proliferation of cloud computing technology and services.
The cloud computing industry refers to companies that (i) license and deliver software over the internet on a subscription basis (SaaS), (ii) provide a platform for creating software applications which are delivered over the internet (PaaS), (iii) provide virtualized computing infrastructure over the internet (IaaS), (iv) own and manage facilities customers use to store data and servers, including data center Real Estate Investment Trusts (REITs), and/or (v) manufacture or distribute infrastructure and/or hardware components used in cloud and edge computing activities.
The increasingly digital and connected world that form the backdrop for CLOU’s launch is exhibiting significant growth, and is expected to continue to grow over the coming years. The cloud computing industry that was estimated to be worth $188 billion in 2018 is expected to be worth over $300 billion by 2022, a nearly 15% annualized growth rate.
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