A joint venture between ETF Securities and ISE ETF Ventures, a creator of investment based indices, lies behind the launch of the first European ETF to provide pure exposure to the cyber security sector.
The ETFS ISE Cyber Security GO UCITS ETF has been listed on the London Stock Exchange today.
The announcement predicts that the cyber security sector is set to grow at a compound annual growth rate of 9.8 per cent to USD170 billion by 2020. The product, the partners say, provides investors with a simple, liquid and cost effective way to gain access to this sector.
Howie Li, Co-Head of Canvas, ETF Securities comments: “We are delighted to partner with ISE ETF Ventures to launch this innovative ETF in an exciting growth sector. With the success that ISE ETF Ventures has found bringing this exposure to the US market, this investment solution will provide European investors with a global portfolio of listed cyber security companies that capture activity from both emerging and established organisations.
The dynamic world of disruptive technologies continues to advance and ETF Securities will continue to focus on harnessing the growth opportunities highlighted by technological advances and industry trends with new and innovative products.”
Kris Monaco, Head of ISE ETF Ventures says: “As cyber crime continues to grow, governments and companies are prioritising cyber security as an essential investment. With 42.8 million cyber attacks in 2014 and global cyber crime costing an estimated USD400 billion, this is a sector we can expect to dominate headlines and corporate budgets. The ISE Cyber Security UCITS Index demonstrates our continued commitment to growth and expansion in the indexing and ETF space.
The ETFS ISE Cyber Security UCITS ETF provides investors with exposure to the first and only European product to track the firms that provide cyber security technologies meeting this growing demand. Moreover, we are thrilled to partner with ETF Securities to offer European investors access to this vital and dynamic sector.”
Described as ‘the invisible enemy’, the partners in the joint venture report that the global growth prospects of the cyber security sector are compelling for investors. Since 2009, reported cyber security incidents have grown at the year-on-year compound annual growth rate of 66 per cent.
The announcement says: “As this threat grows, cyber security companies will likely see a continued and increasing demand for their services to protect individuals, corporates and governments from attack. Global technology research company Gartner has already predicted that, by 2018, more than half of organisations will use security services firms that specialise in data protection, security risk management and security infrastructure management to enhance their security postures. With the estimated cost of cyber crime reaching USD400 billion, the need for further preventative action against this risk is well evidenced.”
The methodology that allows the new ETF to capture the full economic value of the cyber security industry, is based on a globally diversified basket of cyber security focused companies that represent a professionally selected portfolio via a rules-based and UCITS-compliant index methodology, the announcement says. These are diversified across sub-industry, country and market capitalisation and offer focused exposure to cyber security companies.
