Digitization is perhaps one of the most influential long-term secular growth trends underway currently. Investors looking to take advantage of this trend have a number of great stocks to choose from. That said, valuations in this space remain elevated. Risk is heightened at these levels, increasing the value of using diversification tools such as Exchange Traded Funds (ETFs).
One ETF which provides direct exposure to the digitization trend is the Evolve Cyber Security Index ETF (TSX:CYBR). This ETF holds a wide range of companies focused on providing cyber security solutions to companies increasingly focused on expanding their digital footprint. The COVID-19 pandemic has accelerated digitization to a degree many had not anticipated. Digitization will continue to accelerate over the long term.
The need for cyber security solutions are likely to track this trend in lockstep, or perhaps even exceed the growth rate of other tech sub-sectors. This is due, in part, to the fact that many technology companies remain under-invested in their cyber security protocols. Therefore, this provides an outsized opportunity for investors today.
Any investment in high-flying sectors like cyber security comes with a meaningful level of market risk. Chasing investments in such sectors is not advisable. However, buying the dips and taking partial positions over time is a great way to gain exposure slowly over the long term.
Invest wisely, my friends.
