Category: Articles

Evolve Announces June 2024 Distributions for Certain Evolve Funds

Posted on by Veronica Carlasuc

TORONTO – June 19, 2024 – Evolve Funds Group Inc. (“Evolve”) is pleased to announce the distribution amounts per unit (the “Distributions”) for certain funds (the “Evolve Funds”), for the period ending June 30, 2024, as indicated in the table below.

The ex-dividend date and record date for the Distributions of the High Interest Savings Account Fund (“HISA”), US High Interest Savings Account Fund (“HISU.U”), Premium Cash Management Fund (“MCAD”) and US Premium Cash Management Fund (“MUSD.U”) is anticipated to be June 27, 2024. For the distributions for all other Evolve Funds, the ex-dividend date and record date is anticipated to be June 28, 2024. Unitholders of Evolve Funds on record date will receive cash distributions payable on or about July 8, 2024.

Evolve FundsTicker
Symbol
Distribution
per Unit
Frequency
Evolve Canadian Banks and Lifecos Enhanced Yield Index FundBANK$0.10000Monthly
Evolve Global Materials & Mining Enhanced Yield Index ETFBASE
BASE.B
$0.20000
$0.20000
Monthly
Monthly
Evolve Enhanced Yield Bond FundBOND
BOND.B
BOND.U
$0.19000
$0.19000
USD $0.19000
Monthly
Monthly
Monthly
Evolve US Banks Enhanced Yield FundCALL
CALL.B
CALL.U
$0.12500
$0.12500
USD $0.12500
Monthly
Monthly
Monthly
Evolve Automobile Innovation Index FundCARS
CARS.B
CARS.U
$0.02000
$0.02000
USD $0.02000
Monthly
Monthly
Monthly
Evolve Cyber Security Index FundCYBR
CYBR.B
CYBR.U
$0.01000
$0.01000
USD $0.01000
Monthly
Monthly
Monthly
Evolve Cloud Computing Index FundDATA
DATA.B
$0.01000
$0.01000
Monthly
Monthly
Evolve Active Canadian Preferred Share FundDIVS$0.07000Monthly
Evolve Active Global Fixed Income FundEARN$0.12500Monthly
Evolve European Banks Enhanced Yield ETFEBNK
EBNK.B
EBNK.U
$0.14500
$0.14500
USD $0.14500
Monthly
Monthly
Monthly
Evolve Innovation Index FundEDGE
EDGE.U
$0.00500
USD $0.00500
Monthly
Monthly
Evolve S&P 500® Enhanced Yield FundESPX
ESPX.B
ESPX.U
$0.15500
$0.15500
USD $0.15500
Monthly
Monthly
Monthly
Evolve S&P/TSX 60 Enhanced Yield FundETSX$0.16000Monthly
Evolve Active Core Fixed Income FundFIXD$0.05500Monthly
Evolve E-Gaming Index ETFHERO$0.05000Monthly
High Interest Savings Account FundHISA$0.18469Monthly
US High Interest Savings Account FundHISU.UUSD $0.41544Monthly
Evolve Future Leadership FundLEAD
LEAD.B
LEAD.U
$0.10500
$0.10500
USD $0.10500
Monthly
Monthly
Monthly
Evolve Global Healthcare Enhanced Yield FundLIFE
LIFE.B
LIFE.U
$0.16000
$0.16000
USD $0.16000
Monthly
Monthly
Monthly
Premium Cash Management FundMCAD$0.40765Monthly
US Premium Cash Management FundMUSD.UUSD $0.44413Monthly
Evolve NASDAQ Technology Index FundQQQT
QQQT.B
QQQT.U
$0.03000
$0.03000
USD $0.03000
Monthly
Monthly
Monthly
Evolve NASDAQ Technology Enhanced Yield Index FundQQQY$0.32000Monthly
Evolve FANGMA Index ETFTECH
TECH.B
TECH.U
$0.00160
$0.00160
USD $0.00160
Monthly
Monthly
Monthly

Distributions for the funds will vary from period to period.  For further in

formation regarding the Distributions, please visit www.evolveetfs.com

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds. ETFs and mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units. Please read the prospectus before investing.

Certain statements contained in this news release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

About Evolve Funds Group Inc.

With $7 billion in assets under management, Evolve is one of Canada’s fastest growing ETF providers since launching its first ETF in September 2017. Evolve specializes in bringing innovative ETFs to Canadian investors. Evolve’s suite of ETFs provide investors with access to: (i) index-based income strategies; (ii) long term investment themes; and (iii) some of the world’s leading investment managers. Established by a team of industry veterans with a proven track record of success, Evolve creates investment products that make a difference.  For more information, please visit www.evolveetfs.com

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External Link: http://www.newswire.ca/en/releases/archive/June2024/19/c5976.html

CONTACT INFORMATION: Evolve ETFs, info@evolveetfs.com, t. 416.214.4884, tf. 1.844.370.4884

MEDIA CONTACT: Keith Crone, kcrone@evolveetfs.com, 416.966.8716

The S&P 500® Index and the S&P/TSX 60 Index are each a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”), and has been licensed for use by the Evolve Funds. S&P® and S&P 500® are trademarks of S&P Global, Inc. or its affiliates (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). It is not possible to invest directly in an index. The Evolve Funds are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, any of their respective affiliates (collectively, “S&P Dow Jones Indices”). S&P Dow Jones Indices does not make any representation or warranty, express or implied, to the owners of the Evolve Funds or any member of the public regarding the advisability of investing in securities generally or in the Evolve Funds particularly or the ability of the S&P 500® Index and the S&P/TSX 60 Index to track general market performance.  Past performance of an index is not an indication or guarantee of future results. S&P Dow Jones Indices’ only relationship to the Evolve Funds with respect to the S&P 500® Index and the S&P/TSX 60 Index is the licensing of the Indexes and certain trademarks, service marks and/or trade names of S&P Dow Jones Indices and/or its licensors.  The S&P 500® Index and the S&P/TSX 60 Index are determined, composed and calculated by S&P Dow Jones Indices without regard to the Evolve Funds.  S&P Dow Jpones Indices have no obligation to take the needs of the Evolve Funds or the owners of the Evolve Funds into consideration in determining, composing or calculating the S&P 500® Index and the S&P/TSX 60 Index. S&P Dow Jones Indices has no obligation or liability in connection with the administration, marketing or trading of the Evolve Funds. There is no assurance that investment products based on the S&P 500® Index or the S&P/TSX 60 Index will accurately track index performance or provide positive investment returns.  S&P Dow Jones Indices LLC is not an “investment adviser, commodity trading advisory, commodity pool operator, broker dealer, fiduciary, promoter” (as defined in the Investment Company Act of 1940, as amended), “expert” as enumerated within 15 U.S.C. s. 77k(a) or tax advisor.  Inclusion of a security, commodity, crypto currency or other asset within an index is not a recommendation by S&P Dow Jones Indices to buy, sell, or hold such security, commodity, crypto currency or other asset, nor is it considered to be investment advice or commodity trading advice.

S&P DOW JONES INDICES DOES NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE S&P 500® INDEX AND THE S&P/TSX 60 INDEX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO.  S&P DOW JONES INDICES SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN.  S&P DOW JONES INDICES MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY THE EVOLVE FUNDS, THE OWNERS OF THE EVOLVE FUNDS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500® INDEX AND THE S&P/TSX 60 INDEX OR WITH RESPECT TO ANY DATA RELATED THERETO.  WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBLITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE.  S&P DOW JONES INDICES HAS NOT REVIEWED, PREPARED AND/OR CERTIFIED ANY PORTION OF, NOR DOES S&P DOW JONES INDICES HAVE ANY CONTROL OVER, THE LICENSEE PRODUCT REGISTRATION STATEMENT, PROSPECTUS OR OTHER OFFERING MATERIALS. THERE ARE NO THIRD-PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND THE EVOLVE FUNDS OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.

Nasdaq®, Nasdaq-100®, Nasdaq-100 Index®, Nasdaq-100 Technology Sector Adjusted Market-Cap Weighted™ Index are trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by Evolve ETFs. The Product(s) have not been passed on by the Corporations as to their legality or suitability. The Product(s) are not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).

Evolve applies to launch index ETFs that offset the carbon footprint of stocks

Posted on by Evolve ETFs

Clare O’Hara, WEALTH MANAGEMENT REPORTER

Published April 13, 2021

As Canadian companies begin to set targets on how they can help reduce greenhouse gases, Evolve Funds Group Inc. is aiming to launch one of the country’s first investment funds that will offset the carbon footprint of North America’s primary stock indices.

Evolve announced on Tuesday it has filed with the Ontario Securities Commission to launch a set of “CleanBeta” exchange-traded funds that will trade on the Toronto Stock Exchange under the symbols SIXT and FIVE.

The Evolve S&P/TSX 60 CleanBeta fund (SIXT) and the Evolve S&P 500 CleanBeta fund (FIVE) will track the performance of S&P/TSX 60 and S&P 500 indices, respectively, while striving to offset the carbon footprint of the companies in the portfolios.

“Carbon dioxide is the primary contributor to our world’s greenhouse gases. Investors are now demanding that countries and companies work to reduce these emissions, however, this cannot take place overnight,” Evolve chief executive officer Raj Lala said in a statement.

“Currently, trying to invest in only carbon neutral companies results in a significant narrowing of the investable universe. Our [funds] deliver commonly used traditional indices and strive to offset the carbon emissions from these companies, in order to deliver a clean beta solution.”

The collaboration with the S&P/TSX 60 is rare for a retail Canadian ETF, Mr. Lala said.

“As an independent index provider our goal is to provide investor choice in the market and we are attracted to any opportunities that provide new innovative ways to implement passive index strategies,” said Michael Orzano, senior director of global equity indices at S&P Dow Jones Indices. “This provides yet another choice for market participants to gain core equity exposure in both Canada and the U.S.”

If the funds are approved, Evolve intends to offset the carbon in both portfolios by using a carbon footprint calculation provided by S&P Dow Jones called Trucost, which uses data to determine the carbon exposure of the companies in each index.

Evolve will then employ a variety of strategies, such as purchasing and retiring carbon credits, as a means to neutralize the full carbon footprints.

For example, based on estimates of the carbon footprint of the S&P/TSX 60, Trucost anticipates the fund will pay about US$20 per tonne of carbon, which translates into approximately 0.17 per cent of net assets.

Amy West, global head of TD Securities’ sustainable finance and corporate transitions group, said the use of carbon offset and carbon removal credits in investment products is an encouraging sign to help assist in the transition to net zero by 2050.

“It is going to be important that we are tackling greenhouse gas emissions head on, and part of how we do that can be done two ways,” Ms. West said in an interview. “Companies can lower their GHG emissions though operational improvements, but the rapid development of carbon offsetting and carbon removal markets as part of that plan is going to have a pretty big role to play as well.”

Individual investors are also driving the conversation for more carbon-neutral products, said Charlie Spiring, chairman of Wellington-Altus Holdings Inc., an independent wealth manager with about $15-billion in assets.

“Advisers are paying closer attention to carbon-neutral products as clients are increasing the demand for green investing,“ Mr. Spiring said. “The last five years haven’t really given us a lot of great solutions. Some are expensive and some are modest stocks that push the button but [carbon offsets] can easily allow investors to clear their conscience as they align their interests with their beliefs.”

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Wealth Professional Canada’s Hot List 2020

Posted on by Evolve ETFs

July 2020 Issue

There are many individuals throughout the financial industry with the power to significantly affect advisors’ work, from the top decision-makers at Canada’s largest financial institutions to the heads of fund providers, regulatory bodies and major advisory firms.

This year’s Hot List shines a light on 50 of these professionals, all of whom have made an indelible mark on the wealth management landscape over the past 12 months. Whether they’ve pioneered a new investment innovation or tirelessly advocated for advisors, their collective contributions are a large part of what makes Canada’s wealth management industry so strong. 

 

Hot List 2020, Raj Lala

As president and CEO of Evolve ETFs, Raj Lala saw his firm’s disruptor-oriented strategy triumph in March. Of more than 500 equity ETFs on the TSX, only five stayed positive as COVID-19 barreled into the Canadian economy; three of those five funds came from Evolve. In the unique circumstances of a pandemic-driven market crash, Evolve’s healthcare, cybersecurity, and video game thematic ETFs were ideally placed to grow. In fact, the Evolve Global Healthcare Enhanced Yield Fund was the highest-performing equity ETF on the TSX in March.

“When we were starting to put these products together, we didn’t contemplate this environment,” Lala told WP. “I don’t think anybody would’ve contemplated this environment. However, when we do put products together, we talk about how this sector will perform in a challenged market and, more importantly, in a challenged economy.”

Source: Wealth Professional Canada

To view the full list and original article, click here.

Seven Well-Managed Preferred Share Funds

Posted on by Evolve ETFs

Investor Newsletter Published June 25, 2020

One of the more humbling things an income investor can attempt is to manage a portfolio of preferred shares.

Preferreds are more complex than you think and not easy to research because so much less has been written about them in comparison with common shares. If you’re ready to hand the job of managing your pref shares to a pro, long-time preferred share analyst John Nagel has some thoughts for you.

Mr. Nagel, currently managing director of preferred shares at Leede Jones Gable Inc., recently put together a list of seven actively managed preferred share exchange-traded funds that he considers to be well managed. Here are the funds he included:

  • Horizons Active Preferred Share ETF (HPR-T): Mr. Nagel praised the managers of this fund, Fiera Capital, which is one of the country’s largest managers of preferred shares. Globeinvestor.com pegs the dividend yield at 5.8 per cent, and the one-year total return to May 31 was minus 12.8 per cent.
  • Evolve Active Canadian Preferred Share Fund (DIVS-T): Managed by Addenda Capital since April 1. Mr. Nagel said they’ve been investing client assets in pref shares for decades. The yield was 6.3 per cent, while the one-year total return was minus 13 per cent.
  • Dynamic iShares Active Preferred Shares ETF (DXP-T): Mr. Nagel said this ETF can diversify into bonds. Yield of 5.3 per cent, one-year return of minus 12.7 per cent.
  • NBI Active Canadian Preferred Shares ETF (NPRF-T): Capital preservation is a focus of this fund. Yield of 4.5 per cent, one-year return of minus 10.6 per cent.
  • Lysander-Slater Preferred Share ActivETF (PR-T): Mr. Nagel said management focuses on capital preservation and has 20 years of experience in the preferred share market. Yield of 5.7 per cent, one-year return of minus 16.4 per cent.
  • RBC Canadian Preferred Share ETF (RPF-T): Focuses on rate reset preferreds, where the dividend is reset every five years to adjust to changing interest rates. Yield of 6.2 per cent, one-year return of minus 14 per cent.
  • Purpose Canadian Preferred Share Fund (RPS-NEO): Focus on capital preservation and tax-efficient income. Yield of 6.9 per cent, one-year return of minus 16.2 per cent.

A benchmark for these funds would be the S&P/TSX Preferred Share Index, which had a one-year total return to May 31 of minus 10 per cent. You can invest in this index through the iShares S&P/TSX Canadian Preferred Share Index ETF (CPD-T), which has a yield of 5.8 per cent.

— Rob Carrick, personal finance columnist

External Source: https://www.theglobeandmail.com/investing/investment-ideas/article-shorts-place-record-bets-against-tsx-equities-etf-plus-seven-well/

Investors scoring big with e-gaming ETFs during the pandemic

Posted on by Evolve ETFs

MARY GOODERHAM
SPECIAL TO THE GLOBE AND MAIL
PUBLISHED JUNE 11, 2020

With the COVID-19 pandemic leaving people stuck at home with no professional sports to watch, even some more staid pursuits such as chess, sudoku and crosswords have become hyped-up online spectator events.

The surge in demand for these and other online games to escape reality and fill time has supercharged the electronic-gaming sector. Niche exchange-traded funds (ETFs) that include game developers, publishers and hardware-sellers – as well as the burgeoning e-sports sector that features tournaments with professional gamers – are experiencing a surge of inflows and strong returns so far this year.

“The lockdown has been good for video-gaming companies,” says Lara Crigger, senior staff writer at ETF.com in New Orleans, saying that some e-games ETFs have seen more than half of their total flows come over the past few months.

U.S.-based e-gaming ETFs that have performed particularly well in the pandemic hold a blend of traditional game makers as well as online and e-sports, Ms. Crigger says. These include the VanEck Vectors Video Gaming & eSports ETF (ESPO-Q), which has returned more than 25 per cent year-to-date and the Global X Video Games & Esports ETF (HERO-Q), which is up by about 28 per cent so far this year. (All data from Morningstar as of June 8.)

The fact that e-sports events can’t be held in stadiums and arenas right now, and have moved online, removes extra revenues for some operators, Ms. Crigger says.

It’s why the Roundhill Bitkraft eSports & Digital Entertainment ETF (NERD-A), a small pure eplay fund with AUM of about US$18-million, has seen a lower year-to-date return of 20 per cent, compared with its peers, and more modest inflows.

Meanwhile the oldest e-gaming fund, the Wedbush ETFMG Video Game Tech ETF (GAMR-A), has seen a small decline in flows, Ms. Crigger says. GAMR holds a more diverse gaming portfolio, including consumer discretionary companies and bricks-andmortar retailers, which have been bruised in the current stayat-home environment. Still, GAMR, with an AUM of about US$90-million, has returned about 20 per cent year-to-date.

The Evolve E-Gaming Index ETF (HERO-T), Canada’s first and only ETF in the sector, has an AUM of $11.6-million and returned 21 per cent year-to-date.

“People need to find things that they themselves can do and their kids can do,” says Raj Lala, chief executive of Evolve Funds Group Inc. in Toronto, saying that video games are attracting diverse age groups and appealing increasingly to women. He says e-gaming offers social interaction at a distance and a fix for sports junkies missing their basketball and hockey championships and baseball spring training.

“[E-gaming] has really taken on its own life,” Mr. Lala says, citing data showing that about 13 per cent of YouTube’s viewership today is devoted to gaming.

Average daily playtime for “shooter-type” high-action video games grew to 60 minutes in March from 38 minutes in December, according to the research firm Newzoo.

It says mobile gaming has seen the biggest increase in engagement and revenues as a result of the COVID-19 lockdown measures, and forecasts that the world’s 2.7 billion gamers will spend US$159-billion on games in 2020, with the market surpassing US$200-billion by 2023.

Mr. Lala expects some online gaming action to be offset by live professional sports when it eventually returns.

However, he says that e-gaming manufacturers are constantly releasing higher-quality products that have richer graphics and bring ancillary revenues from advertisers and add-on fees. The sector also has “recession resilience,” Mr. Lala says, with users seeing gaming as an economical entertainment option in troubling times expected ahead.

“A lot of investors are becoming savvy now, they’re realizing that the world is going to be different and they’re looking for ways to participate in some of those changes,” Mr. Lala says.

David Kletz, vice-president and portfolio manager at Forstrong Global Asset Management Inc. in Toronto, says that with new online releases, multipleplatform access and extra revenue-drivers such as in-app purchases, the gaming industry is becoming more robust and “investable” than in the old days of consoles and games on CD.

“It’s definitely a much more resilient business model,” Mr. Kletz says. “It’s an interesting transition.”

He says that the development of subscription-based games, akin to a “Netflix for gaming,” are a growing source of revenue for major names such as Apple Inc., Microsoft Corp. and Alphabet Inc.’s Google. “I don’t even need to leave my house; all I need is my internet connection and off we go.”

E-sports currently represent a fraction of the industry but have an opportunity for “massive scale,” Mr. Kletz says. “The number of people that tune into this stuff is insane.”

The industry is looking to further monetize that phenomenon, which is critical from an investment standpoint. “There’s a lot of untapped potential there,” Mr. Kletz adds.

Ms. Crigger agrees that “esports is the future of gaming,” and even with the end of the pandemic, the largest growth in gaming will be in offering such activities online.

“They’re ridiculously lucrative,” she says. “People are attracted to the idea that we’re all stuck at home now, so let’s try and play that trend.”

Still, she cautions that, while gaming is a “cool theme,” investors in these ETFs run the risk of doubling up on their exposure to technology names and to the Asia-Pacific region.

“You have to make sure you’re not just backing a story; you’re backing an exposure that is distinct and unique and actually diversifying your portfolio,” Ms. Crigger says.

“And make sure it isn’t something you already hold in a different wrapper.”

 

Why cybersecurity is a sector worth investing in

Posted on by Evolve ETFs
BRENDA BOUW
SPECIAL TO THE GLOBE AND MAIL
PUBLISHED MAY 4, 2020

Cybersecurity has become top of mind for many organizations as much of our interactions shift online because of COVID-19. The renewed focus on online safety is also a potential investment opportunity for financial advisors and investors looking for sectors that could withstand the current market volatility.In recent weeks, many cybersecurity stocks and investment funds have been outperforming the broader markets, which have been whipsawed by economic uncertainty from the coronavirus. Specifically, some cybersecurity investments have seen either modest gains or single-digit losses year-to-date compared to double-digit declines for broader indexes such as the S&P/TSX Composite Index or the S&P 500.Some advisors believe exchange-traded funds (ETFs) could be the best way to play the sector because of their diversified portfolios that include cybersecurity hardware, software and services companies. There’s also a growing need for corporations to spend more on various cybersecurity measures to protect their data and their brand.

“Cybersecurity is basically insurance to make sure your company remains viable for generations to come because one breach could throw it all out the window,” says John De Goey, portfolio manager at Wellington-Altus Private Wealth Inc. in Toronto.

Ernst & Young Global Ltd.’s (EY) EY Global Information Security Survey 2020 reports that 59 per cent of the 1,300 organizations surveyed worldwide last autumn have faced a “material or significant” cybersecurity incident in the previous 12 months, while 48 per cent of boards of directors believe that cyberattacks and data breaches will more than moderately impact their business in the next 12 months. About one-fifth of the attacks came from so-called “hacktivists” and almost a quarter came from organized crime groups. The report also states that 86 per cent of companies surveyed cited crisis prevention and compliance as top reasons to boost their cybersecurity spending.

One of the top cybersecurity ETFs is First Trust NASDAQ Cybersecurity ETF (CIBR-Q), with assets of US$1.4-billion and a management expense ratio (MER) 0.6 per cent. Some of its top holdings include information-technology (IT) services company Okta Inc. (OKTA-Q), communications equipment provider Cisco Systems Inc. (CSCO-Q) as well as software companies Splunk Inc. (SPLK-Q) and Palo Alto Networks Inc. (PANW-N). The ETF has lost 3.3 per cent year-to-date. (All performance numbers are total price returns as of April 20 from Morningstar Canada.)

Another is ETFMG Prime Cyber Security ETF (HACK-A), which includes security hardware and software companies as well as those providing cybersecurity as a service. This ETF, with assets under management (AUM) of US$1.3-billion and an MER of 0.6 per cent, has dropped 3 per cent so far this year.

iShares Cybersecurity and Tech ETF (IHAK-A) has a much-larger AUM of US$24.7-million and some of its top holdings include IT companies Citrix Systems Inc. (CTXS-Q), Docusign Inc. (DOCU-Q) and Akamai Technologies Inc. (AKAM-Q). Its MER is 0.47 per cent. The ETF has fallen 2.5 per cent year-to-date.

Evolve Cyber Security Index Hedged ETF (CYBR-T), Canada’s first cybersecurity ETF, has an AUM of $61.8-million, an MER of 0.63 per cent and has returned 3.35 per cent so far this year. The unhedged version (CYBR.B-T) has an AUM of about $16.4-million, an MER of 0.66 per cent and has returned 12.6 per cent year-to-date.

About 70 per cent of this ETF’s holdings include U.S.-based companies such as Okta, Fortinet Inc. (FTNT-Q) and Palo Alto Networks – alongside other names from Israel, China, Japan and Britain.

Evolve Funds Group Inc. chief executive Raj Lala says cybersecurity plays are largely recession-proof as companies ramp up spending on cybersecurity amid a steady increase in cyberattacks.

Mr. De Goey says a handful of his clients have asked to have this Evolve ETF in their portfolios as a broader play on the cybersecurity market.

“Cybersecurity is about as safe a place you can get in the technology space,” he says.

Mr. De Goey is considering adding the cybersecurity play to some of his other discretionary portfolios when the markets start to stabilize, using cash his firm now has sitting on the sidelines.

“I’m looking at what I can do when it’s safe to go back into the water, which I don’t think will be anytime soon,” he says. “When we finally look as though we’ve reached the bottom… this is the sort of thing I would look at because it’s safe and I think there are actually above-average returns.”

Mr. De Goey also looks at cybersecurity through the environmental, social and governance (ESG) lens, with a focus on governance. “If you want to talk about governance, any firm that doesn’t do a completely thorough job of maintaining cybersecurity will have their governance called into question,” he says.

Jeff Hull, senior financial advisor at Manulife Securities Inc. in Mississauga, says it’s not just companies that rely on cybersecurity, but also consumers who use connected technology such as smart doorbells, baby monitors and household appliances.

He says there’s a wide range of companies in the sector that offer different products and services – some that might not be as advanced or well used as others – and cautions advisors and investors to do their homework before buying.

“Dig deep and then deeper to make sure you and your client understand the cyber company [you’re] buying, why [you’re] buying that company and the truth behind the math because a lot of cyber companies have a high cash burn,” Mr. Hull says.

Related Link: https://www.theglobeandmail.com/investing/globe-advisor/advisor-etfs/article-why-cybersecurity-is-a-sector-worth-investing-in/