Can the ASX-listed HACK ETF provide exposure to shares fighting what Warren Buffett calls the ‘number one problem with mankind’?


A 2020 report from the World Economic Forum (WEF) found that around 1 million new people log onto the internet every day. Other reports predict 7.5 billion people will connect to the internet by 2032.

Accompanying this growth is a rapid uptrend in the number of cyber threats. These range from attacks on devices to shutting down entire power grids.

The cost of cybercrime is expected to grow by 15% each year until 2025, hitting US$10.5 trillion annually. That’s an increase from US$6 trillion in 2021.

Investing phenom Warren Buffett went as far to say that, whilst he didn’t know that much about cybercrime, he did “think that [it’s] the number one problem with mankind”.

These projected growth numbers in cybersecurity are astronomical. And investors are now surely wondering how to gain exposure to the space.

With the Betashares Global Cybersecurity ETF (ASX: HACK), that is now possible.

Managers of the HACK ETF aim to track a benchmark that follows companies in the global cybersecurity sector.

That benchmark is the Nasdaq Consumer Technology Association Cybersecurity Index (NQCYBR).

With HACK, investors can obtain “diversified, cost-effective exposure to global cybersecurity companies,” according to BetaShares (the licensed distributor of the funds in Australia).

This is “a sector that is heavily under-represented on the ASX,” it says.

With that, let’s break down the fund’s asset allocation into its individual components.

The concentration of holdings is in the United States, with 85% of assets located there. Israel follows with 3.8%, then India with 3%.

The majority of shares are also within the systems software sector, at roughly 62%.

Following this, around 12.5% of funds are allocated to communication equipment, then 10% to research and consulting services.

The ETF has performed to its expectations. It has tracked its benchmark closely over the last 12 months with minimal tracking error.

HACK is down around 5%, whereas its index is down 13% at the time of writing, and the S&P/ASX 200 Index (ASX: XJO) is down 7%.

Source: Read More

We’ve Already Come Too Far To End This Now.

Subscribe To Our Weekly Newsletter

Get notified about new articles