Cybersecurity is such an important theme that there an entire month devoted to awareness of it. For investors, the relevance of cybersecurity lasts for all 12 months of the year, and there are multiple avenues for addressing that relevance.
The WisdomTree Cybersecurity Fund (NASDAQ: WCBR) is a compelling, practical idea for investors looking for exposure to a broad basket of cybersecurity stocks and one that offers an alternative approach to the industry relative to legacy exchange traded funds in this category.
WCBR tracks the WisdomTree Team8 Cybersecurity Index, which is nearly evenly split between large- and mid-cap equities. WCBR is a potentially important idea for tactical investors because the stream of cyberattacks is unrelenting, meaning that corporations and governments need to up their spending to stay on top of cybercrime.
“Since May 2021, the hackers responsible for the SolarWinds attack have targeted more than 140 technology companies. It is rarely the case that such attacks have a 0% success rate—sometimes techniques as simple as guessing user passwords or phishing emails are enough to get them the access that they seek. It’s possible that Russia is seeking long-term, systematic access to a variety of points in the technology supply chain,” says Christopher Gannatti, WisdomTree head of research, Europe.
Experienced tech investors know that cyberattacks are regular occurrences. They happen every day, but the media usually sticks to the big ones — SolarWinds, Colonial Pipeline, and the like. That regularity indicates opportunity for investors, confirming cybersecurity’s status as a megatrend, and that highlights the importance of WCBR’s methodology.
“WisdomTree benefits from working with expert partners on many of its megatrend approaches. Within cybersecurity, WisdomTree works with Team8, a venture firm with strong expertise in cybersecurity and featuring a leadership team that includes a former director of the NSA and Unit 8200,” adds Gannatti.
WCBR is up 18.52% year-to-date, but the fund has potential to add to that tally into year-end and to start 2022. After October, which was National Cybersecurity Awareness Month, the WisdomTree ETF is showing signs of life.
“Quarter to date, The WisdomTree Cybersecurity Fund (WCBR) is one of WisdomTree’s top performing strategies—it has returned 17.4%, outperforming growth, tech and cybersecurity benchmark indexes including the Nasdaq 100 Index (11.3%) and the S&P 500 Information Technology Index (+12.5%),” concludes Gannatti.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.
