If I told you that one ASX exchange-traded fund (ETF) has consistently returned more than 18% per annum for almost a decade, I wouldn't blame you for being a little sceptical. After all, 18% per annum is far beyond the dreams of most ASX investors, even those who invest for a living.
It's the kind of performance that made Warren Buffett an investing legend (albeit over a much longer stretch). To illustrate, hitting an 18% return over ten years would turn a $10,000 investment into almost $60,000.
Yet that's exactly what the BetaShares Global Cybersecurity ETF (ASX: HACK) has delivered.
Yes, according to the provider, and as of 29 May, HACK units have returned an average of 18.01% per annum since this ASX ETF's stock market listing back in August of 2016. That metric includes unit price growth as well as dividend distributions.
The returns have been almost as generous over more recent timespans too.
This ASX ETF has averaged 16.74% per annum over the five years to 29 May, and 22.05% over three years. Its 12-month return has been relatively lacklustre at a still-respectable 10.9%.
This all goes to show, at least in my view, that investing in an industry enjoying powerful structural tailwinds can pay off handsomely.
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What's behind this ASX ETF's blazing performance?
That's exactly where cybersecurity finds itself. It doesn't require a huge level of mental gymnastics to work backwards here. The past decade has seen the acceleration of the digitalisation of the global economy. Our personal lives, commercial relationships and transactions, and governmental interactions have never been more dependent on the internet.
Whilst this has borne heavy fruit in terms of ease and access, they have also necessitated an ever-rising investment in securing these communication channels.
The biggest winners from this transition have been the companies that can be found in the portfolio of the BetaShares Global Cybersecurity ETF. HACK aims to hold the world's best cybersecurity stocks. That list currently includes names like Palo Alto Networks, CrowdStrike Holdings, Cloudflare, Broadcom, and Okta.
Most of HACK's holdings originate in the United States. However, some hail from other countries, including Israel, France, Canada and India.
Now, like any investment, there's no guarantee that HACK will deliver 18% per annum from here until mid-2036. None of us knows what lies in store for this ASX ETF.
However, what we do know is that cybersecurity investment looks likely to continue to increase for the foreseeable future. I think that puts this ASX ETF in an advantageous position.
The BetaShares Global Cybersecurity ETF charges a management fee of 0.67% per annum.
