Nvidia is one of the most exciting stocks I own in my portfolio. And while it’s doing well year to date — up around 17% — there are some other investments that are doing much better.
One of them is L&G Cyber Security ETF (LSE:ISPY), which as the name suggests is a thematic exchange-traded fund. So far in 2026, this fund has rocketed 42%.
The more recent return though is even more impressive. Because since bottoming out at 2,026p towards the end of February, the share price has surged by roughly 61% to reach 3,269p today.
Can it keep going higher?
Back in fashion
L&G Cyber Security ETF holds a basket of 30 stocks involved in providing cybersecurity. With this vehicle, I get exposure to industry leaders like Cisco Systems, CrowdStrike, Cloudflare, Palo Alto Networks, and Fortinet.
Cybersecurity is experiencing huge growth as the digital revolution picks up steam. However, why I’m really bullish is because rapid advances in artificial intelligence (AI) are turbocharging hacks and therefore the need for cybersecurity.
Here’s what I wrote back in April 2023: “Cybersecurity threats are constantly changing as the technologies that hackers use get ever more sophisticated. And artificial intelligence is set to up the ante in this never-ending game of cat and mouse. This fund [L&G Cyber Security ETF] provides broad exposure to the whole industry.”
Since then, the share price is up 110%. But as mentioned, the recent performance has been extraordinarily strong. This is because cybersecurity stocks have taken off over the last few weeks.
Before that, these shares got caught up in the software sell-off after a powerful cybersecurity-focused AI model was developed by Anthropic (called Claude Mythos). Investors feared this could disrupt traditional cybersecurity firms.
Instead, Anthropic launched ‘Project Glasswing’ to strengthen global cybersecurity firms’ defences against AI cyberattacks. In the eyes of investors, this security tool became a strength rather than a vulnerability.
Very strong growth
Can the bull run continue? Well, it’s certainly possible. Anthropic is reportedly preparing to go public, so excitement around AI could continue for months, spilling over into cybersecurity.
According LGIM (Legal & General‘s asset management business), the global market for AI-based security products will reach more than $133bn by 2030, up from just $14.9bn in 2021.
Also, in the here and now, many of the ETF’s holdings are reporting very strong growth. For example, in Palo Alto’s fiscal third quarter, revenue jumped 31% to $3bn, while next-generation security annual recurring revenue surged 60% to $8.1bn.
The latest advancements at the AI frontier have increased the level of urgency around cybersecurity, and redefined the shape of the industry for the coming years.
Palo Alto CEO Nikesh Arora.
AI is driving a fundamental re-platforming of the Internet and a paradigm shift in how software is created and consumed; it’s shaping up to be the biggest tailwind we’ve ever seen in Cloudflare’s history.
Cloudflare CEO Matthew Prince.
Tread carefully
On the other hand, it’s important to note that many of these stocks are now expensive. And the fact that the portfolio is concentrated in just one area adds more risk.
Therefore, I wouldn’t go all-in on this ETF today. Instead, I would consider adding on dips, recognising that this is likely a multi-decade secular growth industry.
Should you invest £5,000 in Legal & General Ucits ETF Plc - L&g Cyber Security Ucits ETF right now?
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Ben McPoland owns shares in Cloudflare, CrowdStrike, L&G Cyber Security ETF, Legal & General, and Nvidia.
