Exchange traded fund (ETF) investors looking for opportunities to add thematic growth to their portfolios for 2023 and beyond may want to consider cybersecurity. With supply chain and geopolitical risks abound, there is a prime option to get this exposure via cybersecurity ETFs.
Russia’s invasion of Ukraine, for example, put certain Western countries at risk after hitting Russia with sanctions. This heightened the need for strong cybersecurity measures to be in place to stave off a potential attack.
“A broad array of geopolitical risks continue to affect organizations worldwide and in 2023; many will emerge as supply chain exposures,” said Richard Bartley, VP analyst at research firm Gartner. “The pandemic, social and political polarization, digital ethics and privacy challenges, and climate change impact partners and trusted third parties.”
“This puts enterprises and their supply chains at increased risk for malware attacks, attacks on cloud infrastructure, attacks on system integrity and availability, such as distributed denial of service (DDoS), and data theft or loss,” Bartley added.
Moving forward, cybersecurity will be top of mind for many organizations, particularly in a world where core business operations are now on the internet. A cybersecurity infrastructure is imperative, which extends beyond just the IT department in any organization.
“Organizations must build in effective security controls to manage all types of supply chain risks that they face. In 2023, supply chain cybersecurity risks must be addressed as a socio-technical challenge,” Barley noted further. “These are not solely IT security risks, but rather they emerge from challenges such as hardware and software sourcing, business continuity and transportation problems.”
Cybersecurity: A Growth Opportunity
Getting cybersecurity investment exposure can be encapsulated in this one ETF: the Global X Cybersecurity ETF (BUG). The fund seeks to provide investment results that generally correspond to the price and yield performance, before fees and expenses, of the Indxx Cybersecurity Index.
BUG gives investors:
- High growth potential: Forecasts suggest the global cybersecurity market could grow from nearly $180 billion in 2021 to more than $370 billion by 2028.
- Long-term, global challenge: Cybersecurity is a persistent global concern, affecting both public and private sector entities seeking to protect against the increased risk of ransomware attacks and other online threats.
- Unconstrained approach: The realm of cybersecurity extends far beyond personal computers, reaching an ever-multiplying number of devices and applications. BUG invests accordingly, cutting across traditional sector and geographic definitions.
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