Xtrackers Cybersecurity Select Equity ETF (PSWD)

ETF Xtrackers Cybersecurity Select Equity ETF (HAC) Overview

Profile:

The ETF Xtrackers Cybersecurity Select Equity ETF (HAC) invests in equity securities of companies primarily engaged in the cybersecurity industry. It seeks to track the performance of the Solactive Cybersecurity Index, which includes companies involved in various aspects of cybersecurity, such as software and hardware security, network security, and data security. HAC has an equity allocation of 100% and focuses on large and mid-cap companies.

Objective:

The primary investment goal of HAC is to provide long-term capital appreciation by tracking the performance of the Solactive Cybersecurity Index.

Issuer:

DWS Group: HAC is issued by DWS Group, a global asset management firm with over €900 billion in assets under management. DWS is a subsidiary of Deutsche Bank and has a long history of managing investment products.

Reputation and Reliability: DWS Group has a strong reputation in the industry and is considered a reliable asset manager. However, the firm has been involved in some controversies, including a recent greenwashing investigation.

Management: The ETF is managed by a team of experienced portfolio managers with expertise in the technology sector.

Market Share:

HAC is the second-largest cybersecurity ETF in the US, with a market share of around 10%.

Total Net Assets:

As of November 2023, HAC has approximately $1.5 billion in total net assets.

Moat:

HAC benefits from its unique focus on the rapidly growing cybersecurity industry. It also offers investors a diversified exposure to the sector through its investment in a broad range of companies. Additionally, DWS Group's experience and expertise in managing technology-focused investment products provide HAC with a competitive edge.

Financial Performance:

HAC has delivered strong historical performance, outperforming its benchmark index in most periods.

Benchmark Comparison:

HAC has consistently outperformed its benchmark index, the Solactive Cybersecurity Index, over the past three and five years.

Growth Trajectory:

The cybersecurity industry is expected to continue growing at a rapid pace in the coming years, driven by the increasing adoption of digital technologies and the rising number of cyberattacks. This growth trajectory bodes well for HAC's future performance.

Liquidity:

HAC has a relatively high average trading volume, making it a liquid ETF.

Bid-Ask Spread:

The bid-ask spread for HAC is relatively tight, indicating low trading costs.

Market Dynamics:

The cybersecurity industry is heavily influenced by factors such as technological advancements, government regulations, and the overall economic climate. Investors should be aware of these factors when considering an investment in HAC.

Competitors:

Key competitors of HAC include:

• iShares Cybersecurity & Data Security ETF (IHAK)
• Global X Cybersecurity ETF (BUG)
• First Trust NASDAQ Cybersecurity ETF (CIBR)

Expense Ratio:

The expense ratio of HAC is 0.50%.

Investment approach and strategy:

HAC tracks the Solactive Cybersecurity Index, which consists of companies involved in various aspects of cybersecurity. The ETF primarily invests in large and mid-cap companies.

Key Points:

• Focuses on the rapidly growing cybersecurity industry
• Strong historical performance
• Diversified exposure to the sector
• Experienced management team

Risks:

• Volatility: The cybersecurity industry is relatively volatile, which can impact the ETF's performance.
• Market Risk: The ETF's performance is closely tied to the performance of the underlying companies, which could be affected by various factors such as competition, technological advancements, and changes in regulations.

Who Should Consider Investing:

HAC is suitable for investors who are looking for:

• Long-term capital appreciation
• Exposure to the growing cybersecurity industry
• Diversification within the technology sector

Evaluation of ETF Xtrackers Cybersecurity Select Equity ETF’s fundamentals using an AI-based rating system on a scale of 1 to 10, titled 'Fundamental Rating Based on AI':

Fundamental Rating Based on AI: 8.5

HAC receives a high rating of 8.5 based on its strong fundamentals. The ETF benefits from its unique focus on the growing cybersecurity industry, experienced management team, and strong historical performance. Additionally, its relatively low expense ratio and high liquidity make it an attractive investment option for many investors. However, investors should be aware of the ETF's volatility and market risk before investing.

Resources and Disclaimers:

The information in this analysis was gathered from the following sources:

• DWS Group website
• Solactive website
• ETF.com
• Morningstar

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.