Cybersecurity spending is rocketing in 2023. Here's why this ASX ETF might benefit

The ASX ETF offers investors exposure to 36 large-cap global cybersecurity stocks, predominantly listed in the United States.

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Key points

  • Australia was hit by multiple high-profile cyber breaches last year
  • The majority of the nation’s biggest companies are ramping up their cybersecurity spending in 2023
  • The Betashares Global Cybersecurity ETF offers ASX investors exposure to 36 large-cap global cybersecurity stocks

ASX investors looking for an exchange-traded fund (ETF) with the potential to benefit from a reported surge in cybersecurity spending may want to look into the Betashares Global Cybersecurity ETF (ASX: HACK). 

The ASX ETF offers investors exposure to 36 large-cap global cybersecurity stocks, predominantly listed in the United States.

Its top holdings are Broadcom Inc, Cisco Systems Inc, Fortinet Inc, Infosys Ltd and Palo Alto Networks Inc.  

The ASX ETF doesn't, as yet, hold any Australian cybersecurity stocks as the market caps of these companies are still too small to be included.

At the current share price, the fund pays a trailing annual distribution yield of 8.3%, unfranked.

As you can see in the chart below, shares are up 6% over the past five trading days and down 17% over the past 12 months.

ASX ETF in the spotlight as cybersecurity spending rockets

Australia's biggest companies are ramping up their cybersecurity spending. Company managers appear spurred into action in the wake of major hacks in 2022, including breaches impacting millions of Optus and Medibank Private Ltd (ASX: MPL) customers.

That's according to research from Netskope, reported on by The Australian, which surveyed 300 Aussie executives.

That research found that 80% of companies employing at least 200 people will increase their cybersecurity spending in 2023. In 2022 that figure was 63%.

On the smaller end of the market, 41% of the companies said they were upping their spending to thwart hackers.

While that alone is unlikely to send this ASX ETF rocketing, the trend will surely be welcomed by global cybersecurity companies.

Commenting on the survey results, Netskope chief security officer for APAC, David Fairman said, "The data breaches that occurred last year deeply impacted the Australian community, but it seems there is some positive draw from those events."

Fairman added:

In the last decade, attitudinal gaps between technology and business leaders regarding cybersecurity have been a key factor slowing down cybersecurity improvements, and it seems that both teams are now – at last – on the same page, ready to bolster cyber defences for their organisations and customers.

ASX investors looking to potentially profit from this rising trend may wish to look into the HACK ETF.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Global Cybersecurity ETF. The Motley Fool Australia has positions in and has recommended BetaShares Global Cybersecurity ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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