The first half of 2021 proved to be fruitful for the cybersecurity market, setting new records in investing and activity within the space. A recent report from Momentum Cyber tracked the record gains in stocks, as well as business movements by way of acquisitions, mergers, and general performance.
For the first half of 2021, there were 593 business activities within the cybersecurity market that totaled $51 billion in value. It’s a market that is booming in large part due to ransomware attacks; the study recorded a year-over-year increase of 148% in ransomware attacks, with average fees increasing 3,900% from 2018 numbers.
Cybersecurity stocks overall were up 16.8% in the first half of the year, a performance that was higher than the Nasdaq (12.7%) and the S&P (15.2%) over the same time period. The industry continues to be buoyed by its top performers, which carried the majority of the net growth.
Within the space, the top performers have had astronomical growth; Fortinet grew by 160%, Cloudflare by 139%, Norton Lifelock by 131%, Secureworks by 130%, Proofpoint by 127%, OneSpan by 124%, and Crowdstrike by 119%.
The market as a whole has a valuation of roughly $425.8 billion, reflecting a 592% growth over the last ten years.
The cybersecurity market is anticipated to continue its growth throughout the rest of the year as ransomware attacks and generalized cyberattacks continue. It is estimated that there will be 2.9 million ransomware attacks this year alone, and regulators are currently looking at enacting laws to help ensure more security within government and related sectors.
ProShares Offers Leveraged Exposure to Cybersecurity
The ProShares Ultra Nasdaq Cybersecurity ETF (UCYB) is a leveraged ETF that tracks twice the daily returns of the Nasdaq CTA Cybersecurity Index, the same index tracked by the First Trust Nasdaq Cybersecurity ETF (CIBR).
In fact, UCYB holds CIBR, then uses swaps contracts on that ETF to obtain leveraged exposure.
UCYB’s underlying benchmark tracks companies that build, implement, and manage security protocols for public and private networks. To be included, companies must have a minimum market cap of $250 million. Within the index, no singular security can carry more than 6% weight. Lower-volume securities have even tighter weighting restrictions.
UCYB’s benchmark tracks companies such as CrowdStrike Holdings (CRWD), Accenture Plc (ACN), and Cisco Systems (CSCO).
As a leveraged fund, UCYB carries different, greater risks than non-leveraged funds, and should be actively monitored.
UCYB carries an expense ratio of 0.98% with a contractual waiver that ends on September 30, 2022.
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