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4 Best-Performing Stocks of the Best ETF of April

Sweta Killa
·4-min read

Simplify Volt Cloud and Cybersecurity Disruption ETF VCLO topped the list of the best-performing ETFs in April with double-digits returns.

Thematic investing has been seeing huge growth and has become the most popular niche strategy this year. This is especially true, as the pandemic has changed the consumer and business landscape, leading to new trends and new ways of investment. Investors are pouring a lot of money into these ETFs focused on themes like cloud computing, e-commerce, disruptive growth, work from home, video gaming, esports, marijuana, alternative energy or 3D printing (read: 5 Sector ETFs That Crushed the Market in April).

In particular, the rapid adoption of cloud computing, big data, IoT, virtual reality, AI, machine learning, digital communication and 5G technology are raising the need for more stringent cyber security from hackers, leading to an upsurge in cyber security stocks. New mobile technologies have also increased mobile attacks, leading to a spike in protection against cyber threats. We have seen years’ worth of digital transformation in months in the wake of the COVID-19 pandemic. The digital transformation has further increased the risk of security breaches and threats.

As a result, global spending on cybersecurity is growing each year and will continue to increase indefinitely. Gartner estimates the global information security market to witness a five-year CAGR of 8.5% to $170.4 billion in 2022. According to Canalys, the worldwide cybersecurity market is poised to grow by 10% this year to $60 billion. Web and email security (12.5%) will grow the most, followed by vulnerability and security analytics (11%), data security (6.6%) and network security (8%).

Per Statista, spending on cybersecurity solutions is set to soar to nearly $250 billion by 2023. According to a study by Markets and Markets, the global cybersecurity market is projected to grow to $248.26 billion by 2023 from $152.7 billion in 2018 at a CAGR of 10.6% (read: A Quick Guide to Cyber Security ETFs).

Let’s take a closer look at the fundamentals of VCLO.

VCLO in Focus

This thematic investment product is actively managed and is designed to concentrate on those few disruptive companies poised to dominate the new era of the cloud and then enhance the concentrated exposure with options. It holds 23 securities in its basket with the largest allocation to the top three firms that collectively make up for 70.8% of the total assets. The ETF is a high-cost choice, charging 1.02% in annual fees. It has accumulated $1.8 million in its assets since its inception in late December and trades in an average daily volume of 5,000 shares.

Though most of the stocks in the fund’s portfolio delivered strong returns, a few have gained in double digits last month. Below we have highlighted a few best-performing stocks in the ETF with their respective positions in the fund’s basket:

Best-Performing Stocks of VCLO

Cloudflare Inc. NET: This Colorado-based company provides platform protects and accelerates any Internet application online without adding hardware, installing software or changing a line of code. The stock makes up for 25% allocation in the fund’s basket and its options account for 4.4% share. It has gained about 18% in a month and has a Zacks Rank #3 (Hold) and a Growth Score of B.

Okta Inc. OKTA: This United States-based company is a provider of identity for the enterprise. It has gained 17.4% in a month and makes up for 2.2% share in the fund’s basket. The stock has a Zacks Rank #3 and a Growth Score of B.

CrowdStrike Holdings Inc. CRWD: This California-based CrowdStrike is a leader in next-generation endpoint protection, threat intelligence and cyberattack response services. It accounts for 22.9% of assets in VCLO and its options make up for 1.2% share. CrowdStrike has delivered incredible returns of 11.5% in a month. The stock has a Zacks Rank #4 (Sell) and a Growth Score of B.

Zscaler Inc. ZS: This California-based company is one of the world’s leading providers of cloud-based security solutions. The stock takes 1.9% in the fund’s basket and has gained 6.7% in a month. Zscaler has a Zacks Rank #3 (read: A Comprehensive Guide to Cloud Computing ETFs).

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Okta, Inc. (OKTA) : Free Stock Analysis Report
 
Zscaler, Inc. (ZS) : Free Stock Analysis Report
 
CrowdStrike Holdings Inc. (CRWD) : Free Stock Analysis Report
 
Cloudflare, Inc. (NET) : Free Stock Analysis Report
 
S-V CL CY SEC D (VCLO): ETF Research Reports
 
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