Between e-commerce, remote work, and more devices being connected to the internet, there's no denying the need for cybersecurity in the long term. It's an increasingly more important area of technology that could provide investors with significant growth opportunities. According to estimates from researchers at Fortune Business Insights, the global cyber security market will be worth more than $376 billion by 2029, growing at a compounded annual growth rate of more than 13% until then.
A great way for investors to gain exposure to that industry is by investing in the First Trust NASDAQ Cybersecurity ETF (NASDAQ:CIBR). The exchange-traded fund (ETF) focuses on investments in companies that are, "primarily involved in the building, implementation, and management of security protocols applied to private and public networks, computers, and mobile devices in order to provide protection of the integrity of data and network operations."
More than 40% of its holdings are in software companies, followed by 18% that offer IT services, 16% that are involved with communication equipment, and 11% in professional services businesses. With 37 total holdings, this isn't an overly diversified ETF. But with a median market cap of more than $8 billion, these aren't small, risky companies within the fund. The top three stocks within the fund are Cisco Systems (NASDAQ:CSCO), Broadcom (NASDAQ:AVGO), and Infosys (NYSE:INFY), with each of those holdings accounting for more than 6% of the fund's total weight.
Year to date, the ETF has declined by 24% but in the long run, it can make for a solid investment to hang on to and benefit from the inevitable growth in cybersecurity products and services.
