Research > ETFs > ETF / ETP Commentary > 

Bright Horizon for Cybersecurity ETFs

Cybersecurity is in the spotlight, and that could be a plus for stocks and exchange traded funds, including the First Trust Nasdaq Cybersecurity ETF (CIBR ).However, investors should be careful of merely paying attention to CIBR because large-scale cyber attacks are in the news. While those headlines are relevant over the near-term, the cybersecurity investment thesis is supported by compelling long-term trends. Much of that is supported by governments realizing that they need to move rapidly to eliminate cybersecurity vulnerabilities.“In response to several high-profile data breaches, governments and regulators around the world are implementing new laws concerning data privacy and cybersecurity,” notes First Trust. “One of the most important and far-reaching is the European Union’s General Data Protection Regulation, or GDPR, which unified privacy laws across EU countries and applies to any company that collects the personal data of EU citizens.”In other words, some level of forward thinking and patience is required to be involved with CIBR. Trading the fund around near-term headlines is fine for active traders, but investors exhibiting patience with CIBR could be rewarded for exercising that virtue.For its part, CIBR has long since proved that it has staying power. The fund, which is more than six years old, follows the Nasdaq CTA Cybersecurity Index and has nearly $5 billion in assets under management.CIBR is relevant for another reason. Obviously, the First Trust ETF provides dedicated cybersecurity exposure — something broad market benchmarks and even old guard technology ETFs are often light on. In other words, investors that want basket exposure to cybersecurity stocks would be wise to do it with a fund like CIBR, not a traditional tech ETF. Then, there is the attractive long-term opportunity set available to investors in this industry.“Faced with the threat of cyberattacks and stringent new data privacy laws, organizations around the world have little choice but to increase their cybersecurity defenses, in our opinion,” adds First Trust. “Estimates are that worldwide cybersecurity spending will more than double from 2019 levels by 2024, rising to over $300 billion. Moreover, given the growing sophistication and persistence of cybercriminals, we expect cybersecurity spending to be less susceptible to cyclical slowdowns than other forms of technology spending.”Perhaps it’s not surprising that investors have added $1.28 billion in new capital to CIBR this year.For more news, information, and strategy, visit the Nasdaq Portfolio Solutions Channel.

Performance data shown is past performance and is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. Yield and return will vary, therefore you have a gain or loss when you sell your shares. For standard quarterly performance, go to the fund's Snapshot page by clicking on the ETF/ETP's symbol.

ETFs may trade at a premium or discount to their NAV and are subject to the market fluctuations of their underlying investments.

For iShares ETFs, Fidelity receives compensation from the ETF sponsor and/or its affiliates in connection with an exclusive long-term marketing program that includes promotion of iShares ETFs and inclusion of iShares funds in certain FBS platforms and investment programs. Please note, this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral. Additional information about the sources, amounts, and terms of compensation can be found in the ETF's prospectus and related documents. Fidelity may add or waive commissions on ETFs without prior notice. BlackRock and iShares are registered trademarks of BlackRock, Inc. and its affiliates.

FBS receives compensation from the fund's advisor or its affiliates in connection with a marketing program that includes the promotion of this security and other ETFs to customers ("Marketing Program"). The Marketing Program creates incentives for FBS to encourage the purchase of certain ETFs. Additional information about the sources, amounts, and terms of compensation is in the ETF's prospectus and related documents. Please note that this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral.

News, commentary (including "Related Symbols") and events are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.

Any data, charts and other information provided on this page are intended to help self-directed investors evaluate exchange traded products (ETPs), including, but limited to exchange traded funds (ETFs) and exchange traded notes (ETNs). Criteria and inputs entered, including the choice to make ETP comparisons, are at the sole discretion of the user and are solely for the convenience of the user. Analyst opinions, ratings and reports are provided by third-parties unaffiliated with Fidelity. All information supplied or obtained from this page is for informational purposes only and should not be considered investment advice or guidance, an offer of or a solicitation of an offer to buy or sell a particular security, or a recommendation or endorsement by Fidelity of any security or investment strategy. Fidelity does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating ETPs. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use. Determine which securities are right for you based on your investment objectives, risk tolerance, financial situation and other individual factors and re-evaluate them on a periodic basis.

Before investing in any exchange traded product, you should consider its investment objective, risks, charges and expenses. Contact Fidelity for a prospectus, offering circular or, if available, a summary prospectus containing this information. Read it carefully.