Assets Under Management AUM

Cybersecurity ETFs rise after Russia invades Ukraine

The threat of cyberattacks has increased

Cybersecurity exchange-traded funds (ETFs) rose last week after Russia’s invasion of Ukraine heightened concerns about the possibility of an increase in digital attacks.

Europe’s largest cybersecurity ETF, the $2.7 billion L&G Cyber ​​Security UCITS ETF (ISPY), jumped 4% last Friday alone, a day after the invasion of Ukraine by Russia, while the WisdomTree Cybersecurity UCITS ETF (WCBR) and the Global X Cybersecurity UCITS ETF (BUG) both rose 4.6% over the past week, according to data from ETFLogic.

The Ukrainian government has been forced to bring in underground hackers in response to “massive” cyberattacks that are believed to have come from Russia as part of its war on the country.

Other countries are now on red alert, including the UK. Last month, the country’s National Cyber ​​Security Center (NCSC) called on companies to “strengthen their online defenses” against potential Russian hackers.

The company said in a statement: “While the NCSC is not aware of any current specific threats to UK organizations in relation to events in and around Ukraine, there has been a historical pattern of cyberattacks against the ‘Ukraine with international consequences.’

In response to Russia’s attacks, the hacking group Anonymous declared a “cyber war” against the Russian government before revealing that it had hacked into Russian TV channels and the Kremlin government website.

As a result, the cybersecurity industry stands to benefit from the significant increase in attacks against government agencies and large corporations that need to increase their digital defense spending.

Highlighting this, Alphabet revealed plans to spend more than $10 billion to improve cybersecurity over the next five years, while the industry as a whole is expected to reach $352 billion in 2026, up from $156 billion. in 2020, according to Mordor Intelligence.

Mike Wills, director of strategy and policy at cybersecurity and data security firm CSS Assure, said companies “should make themselves as hard to hack as possible at all times – but more so than ever”.

“From a strategic point of view, there is a significant risk that Russia will seek to create instability in Western countries and, in particular, in the United Kingdom, in order to divert attention from the situation in Ukraine and to focus on closer and acute issues within.”

The cheapest cybersecurity ETF in Europe is the iShares Digital Security UCITS ETF (LOCK) which charges 0.40% and has amassed $1.6 billion in assets under management (AUM) since its launch in September 2018.

Other cybersecurity ETFs include First Trust Nasdaq Cybersecurity UCITS ETF (FCBR) and Rize Cybersecurity and Data Privacy UCITS ETF (CYBR) which carry fees of 0.60% and 0.45%, respectively.

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