The ASX-listed exchange-traded fund (ETF) Betashares Global Cybersecurity ETF (ASX: HACK) could be one of the most appealing funds to own this decade.
I'd expect governments and businesses to keep paying for cybersecurity, even in a recession, to ensure important information remains safe.
The HACK ETF aims to provide Aussie investors with exposure to the leading companies in the global cybersecurity sector. Its portfolio includes global cybersecurity giants as well as emerging players from a range of global locations.
It currently has 32 positions in the portfolio, including Crowdstrike, Palo Alto Networks, Thales, Check Point Software, Cloudflare, Okta, and Fortinet.
While the US makes up 77.8% of the ASX ETF's portfolio, there is also representation from countries like India, France, Israel, and Japan.
Having defensive earnings doesn't necessarily mean it's going to perform well – investors also want to see growth potential. Let's look at what's predicted for the industry.
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Strong growth projected to help the HACK ETF
According to Fortune Business Insights, the global cybersecurity market is expected to grow from US$193.7 billion in 2024 to US$562.72 in 2032, which would represent a compound annual growth rate (CAGR) of 14.3% over that period.
The reporting suggested that there are a number of growth trends that require cybersecurity, including growth of the Internet of Things (IoT), cloud technologies, e-commerce, and government. For example, it was reported:
The governments of India, Germany, France, Israel, Brazil, and other countries are investing in internet security solutions to secure their huge volume of confidential data and information. For instance, according to the European Cybersecurity Organization report, in 2020, the government in the U.K. financed around USD 2.30 billion to execute various network and internet security projects in defense and research. This investment would assist in driving the overall adoption rate for IT security solutions across multiple industries that will favor the market's growth during the forecast period.
Foolish takeaway
I think this ASX ETF has a lot of potential, with earnings seemingly on track to grow by double-digits annually over the next several years. Profit growth is normally the key driver of share price growth, so the HACK ETF is definitely one to watch (and possibly own).
