Australian investors are increasingly recognising growth opportunities presented by the global cybersecurity sector, as companies boost spending to protect themselves from the increasing number and sophistication of cyber-attacks.
The interest from investors in this sector has led to a more than doubling in size of BetaShares’ ASX-traded Global Cybersecurity ETF (ASX: HACK) over the last 12 months, with the Fund now approaching AUD150 million in assets under management.
The strong inflows in HACK were coupled with robust investment performance, with the ETF returning 19 per cent in the past 12 months to end January 2019, making it the best performing international equities ETFs trading on the Australian Securities Exchange (ASX) during the period.
BetaShares CEO, Alex Vynokur, says “Australian investors have recently been increasing their holdings to global exposures to capitalise on growth opportunities from sectors that have little or no representation in our local sharemarket – with cybersecurity being a good example.”
2018 saw accelerated cyber threat activity across an assorted range of targets. Symantec, one of the global leaders in cyber-security reported that overall web attacks on internet-capable computers increased by 56 per cent in 2018. Indeed, by December 2018, Symantec was blocking more than 1.3 million unique web attacks every day1. In addition, over 1.2 billion data breaches were recorded in 20182 in the US alone.
Several of the attacks that occurred last year were among the largest of all-time: Marriott, the world’s largest hotelier, announced breaches that may have involved as many as 500 million people who made reservations in their hotels. In the social networking realm, Facebook estimated that hackers stole user information from nearly 30 million people.
Closer to home, some recent cyberattacks in Australia making headlines include the targeting of Toyota’s servers that left staff locked out of their emails for two days; the ransomware attack against Malvern’s Cabrini Hospital in Victoria which scrambled the medical files of about 15,000 patients; and the high-level cyberattack on the Australian Parliament in early 2018.
“Cybersecurity is part of the ‘new world’ economy and it will continue to be critically important the more our lives, and consequently our personal data, move online,” says Vynokur.
In a world where smart, connected devices already far outnumber humans, spending on cybersecurity worldwide is expected to soar over the next decade.
The global cybersecurity market is currently worth around USD140 billion and is forecast to increase to USD248 billion by 20263. This suggests that, as cybercrime costs continue to rise for corporations and governments, so will overall spending for cybersecurity measures, thus positively impacting the cybersecurity industry.
“Demand drivers for the cybersecurity industry remain strong, and we believe investors will continue to recognise the opportunity to be part of this story and seek investment opportunities that provide access to this sector,” says Vynokur.
HACK provides instant access to a portfolio of the world’s leading cybersecurity companies, including Symantec, Verisign and Palo Alto Networks, all via a single trade on the ASX.