Global X ETFs has launched a new exchange-traded fund (ETF) offering investors access to the expanding cybersecurity market at an annual management fee of 0.47 per cent.
The Global X Cybersecurity ETF (ASX: BUGG) tracks the Indxx Cybersecurity Index, which focuses on companies generating over half of their revenue from cybersecurity activities.
Global X chief executive Evan Metcalf noted the BUGG ETF would tap into the growing interest in cybersecurity and Australian investors were familiar with its importance following the data breaches that hit Medibank and Optus recently.
“BUGG invests in a well-diversified portfolio of companies that have the potential to generate significant value for investors by being at the forefront of cybersecurity. We are proud to bring this very important thematic ETF to Australian investors,” Metcalf said.
Global X head of thematic solutions Scott Helfstein underscored the limited options available to Australian investors in the cybersecurity sector and highlighted the value of the newly launched fund as an avenue to tap into the market, especially as global cybersecurity threats continue to rise.
“There is very little overlap between BUGG and the S&P 500 and Nasdaq 100, with only five companies appearing in the three indices. All of which are less than 0.6 per cent of the total index weighting – meaning many investors are likely missing out on growth of the cybersecurity industry if they are only exposed to broad US indices, even if it is tech-heavy like the Nasdaq,” Helfstein said.
“BUGG can be used by investors in their portfolio as a pure-play thematic tilt towards this important megatrend, which is expected to rapidly develop over the coming years as investment in the space accelerates.”
The new fund marks the 35th ETF listed by Global X on the Australian Securities Exchange, expanding its range of technology-focused funds, and was made available for trading from today.
In addition to this cybersecurity offering, Global X ETFs also announced a reduction in the annual management fee for its Global X Semiconductor ETF (ASX: SEMI) from 0.57 per cent to 0.45 per cent.
The fee reduction aims to offer more local investors the opportunity to tap into the thriving semiconductor sector, which has recently witnessed substantial growth and is projected to sustain a compound annual growth rate of over 30 per cent through the end of the decade, the company said.