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One of the most important aspects of the technology sector is cybersecurity. The cybersecurity industry is full of competition, including major technology companies such as: microsoft and alphabet Not just small players; cloud strike and Z scaler.
With so many different companies operating in this sector, it can be difficult to choose one stock over another. Fortunately, investors have an option: index funds.of iShares Cybersecurity and Technology ETF (Ihak 0.49%) is one of the best cybersecurity exchange traded funds (ETFs) on the market.
Explore what makes this fund an attractive investment and evaluate how incremental monthly contributions can lead to greater wealth over time.
What is iShares Cybersecurity and Technology ETF?
The iShares Cybersecurity and Technology ETF is an index fund comprised of 35 different stocks. Companies with the largest weightings within the fund include CrowdStrike, Zscaler, palo alto networksand sentinel one.
Since its inception in 2019, the iShares Cybersecurity and Technology ETF has generated an average annual return of 14.5%. For reference, this is about 50% higher than the long-term average annual total return. S&P500Including dividends.
Of course, investors should keep in mind that the fund primarily holds growth stocks. The approximately 30 positions in the iShares Cybersecurity and Technology ETF provide some diversification, but the volatility of its underlying holdings could result in large gains or losses in any given year. there is.
Nevertheless, the cybersecurity industry is an evolving market that is expected to grow over the long term. And now, with generative AI powering a myriad of technology applications, the cybersecurity landscape appears well-positioned for further advances.
Image source: Getty Images.
How big is the cybersecurity artificial intelligence (AI) market?
Businesses of all sizes and even government agencies are at risk of hacking. The advent of natural language processing (NLP) and machine learning is becoming increasingly useful in areas such as threat detection and fraud prevention. The rate at which AI and cybersecurity protocols are being adopted by enterprises underscores the importance of these technologies and is likely to usher in growth for the industry.
The global market size for AI in cybersecurity is estimated to be worth $19 billion in 2022. However, according to industry research, this market could grow at a compound annual growth rate (CAGR) of 24% by 2032, and the total size could reach $155 billion.
Can you really create wealth by investing every month?
One of the biggest misconceptions about investing is that you need a lot of money to get started. This is incorrect. The iShares Cybersecurity and Technology ETF has consistently outperformed the broader market, but its returns will eventually normalize as many of its holdings grow into better-quality companies. It is appropriate to think that.
The table below shows how investing $200 each month and earning an average annual rate of return of 10% can save you hundreds of thousands of dollars.
| years | total savings |
|---|---|
| 10 years | $38,000 |
| 15 years | $76,000 |
| 20 years | $137,000 |
| 25 years | $236,000 |
| 30 years | $395,000 |
One of the most famous proponents of compound interest is Warren Buffett. A well-known investor, he has won with individual stocks, but also owns passive funds. As shown in the table above, with patience and regular giving, a disciplined savings strategy can build wealth for generations.
If you’re interested in investing in cybersecurity or artificial intelligence (AI) but don’t know where to start, the iShares Cybersecurity and Technology ETF is for you. Diverse deals with leading companies in the cybersecurity industry and their strong returns can lead to significant savings in the long run.
Alphabet executive Suzanne Frye is a member of The Motley Fool’s board of directors. Adam Spatacco has held positions at Alphabet, CrowdStrike, Microsoft, and Zscaler. The Motley Fool has positions in and recommends Alphabet, CrowdStrike, Microsoft, Palo Alto Networks, and Zscaler. The Motley Fool has a disclosure policy.
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