WisdomTree the exchange traded fund (“ETF”) and exchange traded product (“ETP”) sponsor, has announced the launch of the WisdomTree Cybersecurity UCITS ETF (WCBR) on the London Stock Exchange, Borsa Italiana and Börse Xetra. WCBR seeks to track the price and yield performance, before fees and expenses, of the WisdomTree Team8 Cybersecurity Index (WTCBR), and has an expense ratio of 0.45%.
“Demand for protection against cyber-threats will increase as industries convert to online trading, more money changes hands electronically, more people do more work remotely, more home devices and previously personal items become connected, and as business and personal data and processing shifts increasingly to the cloud,” explained Chris Gannatti, Head of Research, Europe, WisdomTree. “The WisdomTree Cybersecurity UCITS ETF focuses on the future of cybersecurity. Companies included in the portfolio are chosen for their high exposure to 7 themes expected to drive the future growth of cybersecurity and must have proven revenue growth capability”.
WCBR seeks to track performance of the WisdomTree Team8 Cybersecurity Index (WTCBR), a basket of cybersecurity companies driving key developments and innovations in the industry. In keeping with WisdomTree’s approach to building thematic equity ETFs, it has partnered with cybersecurity, data and fintech experts Team8 to identify cyber-relevant companies and cybersecurity development themes.
Nadav Zafrir, Managing Partner at Team8, added, “In 2020, a rapid pace of digital transformation dramatically accelerated, and trust in our digital infrastructure went from very important to absolutely critical. Amidst unprecedented challenges, remaining digitally connected fostered impressive levels of functionality driven by agility and, in many cases, kept the lights on. This apparent digital resilience mustn’t fool us. Maintaining trust in our infrastructure is achievable but requires we have our eyes wide open and an immense cyber defense effort. We have partnered with WisdomTree to highlight the trends and innovative solutions we believe will enable a secure and resilient digital future.”
WCBR: What’s Under the Bonnet?
The WisdomTree Cybersecurity UCITS ETF offers exposure to high-growth companies that drive key developments and innovations in the pure-play cybersecurity market over the medium to long term.
In order to determine if a company is primarily involved in cybersecurity activities, the following are considered:
Exposure to Cybersecurity Development Themes: The key themes include privacy and digital trust, cloud security, shift-left security, smarter security, security of internet devices, perimeter-less world, and resilience and recovery.
Specialist Information: Specialist information identifies cyber-relevant companies, leveraging the research techniques of Team8.
Focus and Growth: The weighting mechanism of selected cybersecurity companies takes into account the extent of a company’s overall involvement in the cybersecurity development themes noted above while also tilting toward companies with higher revenue growth rates. The index members are also screened for the Environmental, Social and Governance (ESG) criteria defined within the WisdomTree ESG framework.
Alexis Marinof, Head of Europe, WisdomTree, said, “We’ve built a differentiated and focused strategy, which leverages Team8’s unrivalled expertise and knowledge of the cybersecurity industry. Our range of thematic ETFs has surpassed $1.2bn in assets under management, having launched a little over two years ago. Our approach of developing thematic strategies with third-party sector experts continues to resonate with investors who expect thematic ETFs to be a true reflection of the sector they are seeking to track. From our latest investor survey, we know nearly two-thirds (61%) of European professional investors expect to increase their allocations to thematic ETFs. We are always listening to investor demand and will look to continue providing the unique exposures investors want and come to expect from us”.
The WisdomTree Cybersecurity UCITS ETF, becomes the fourth ETF in WisdomTree’s thematic equity product range, joining the WisdomTree Artificial Intelligence UCITS ETF (WTAI), WisdomTree Cloud Computing UCITS ETF (WCLD) and WisdomTree Battery Solutions UCITS ETF (VOLT).