Cybersecurity is becoming more costly, and more critical. According to an IBM report, the average cost of a data breach has risen 10% over the past year to $4.88 million, the biggest one-year jump since before the COVID-19 pandemic.
A steady migration to cloud-based IT infrastructure and a hybrid workforce that spends significant time outside the office aren't making security any easier. As a result, cybersecurity is a big and fast-growing industry.
That rising risk is fueling growth across the cybersecurity industry. But individual cybersecurity stocks can be volatile, and it’s not always clear which companies will emerge as long-term winners. For investors who want exposure without betting on a single name, cybersecurity exchange-traded funds (ETFs) offer a diversified way to invest in this expanding market.
Top cybersecurity ETFs
Given the growing demand for cybersecurity, it's no surprise that there are a number of ETF options to choose from.
Exchange-Traded Fund (ETF) | Number of Stocks | Annual Expense Ratio | Assets Under Management |
|---|---|---|---|
First Trust Nasdaq Cybersecurity ETF (NASDAQ:CIBR) | 33 | 0.59% | $11.29 billion |
Amplify Cyber Security ETF (NYSEMKT:HACK) | 24 | 0.6% | $2.29 billion |
Global X Cybersecurity ETF (NASDAQ:BUG) | 24 | 0.51% | $1.14 billion |
iShares Cybersecurity and Tech ETF (NYSEMKT:IHAK) | 33 | 0.47% | $910 million |
WisdomTree Cybersecurity Fund (NASDAQ:WCBR) | 25 | 0.45% | $134 million |
Vanguard Information Technology ETF (NYSEMKT:VGT) | 314 | 0.09% | $119 billion |
1. First Trust Nasdaq Cybersecurity ETF
2. Amplify Cybersecurity ETF
NYSEMKT: HACK
Key Data Points
The Amplify Cybersecurity ETF (HACK -0.39%) has been around since 2014 and has amassed almost $2.3 billion in assets. It is also rebalanced quarterly and has performed very well since its inception. Its annual expense ratio is 0.6%. The big difference between it and First Trust's offering, though, is that the Amplify Cybersecurity ETF is made up of just 24 stocks.
That means more portfolio concentration of top names in the industry and fewer of the fund's investments spread out into smaller companies and international investments. There is significant overlap in the portfolios, as Broadcom and CrowdStrike are the Amplify fund's two largest holdings.
3. Global X Cybersecurity ETF
NASDAQ: BUG
Key Data Points
A relative newcomer, the Global X Cybersecurity ETF (BUG -0.28%) was launched in late 2019. It has scaled to $1.14 billion in investor funds and has outperformed both First Trust and Amplify since it launched. This Global X ETF is one of the most concentrated on this list, with just 24 stocks, and is heavily weighted toward large cybersecurity software companies.
As of late 2025, Zscaler (ZS +0.48%), CrowdStrike, and Palo Alto Networks made up almost 20% of the fund's total assets. Like the other ETFs here, Global X's product pays little in the way of dividends since the cybersecurity industry is focused primarily on growth. However, it has outperformed its peers in its short history.
4. iShares Cybersecurity and Tech ETF
NYSEMKT: IHAK
Key Data Points
Also launched in 2019, the iShares Cybersecurity and Tech ETF (IHAK -0.81%) comes from one of the largest financial institutions in the world: BlackRock (BLK -1.69%). It comprises 33 different cybersecurity company stocks and other tech companies involved in cybersecurity, and BlackRock charges a lower annual fee than many of its peers, at just 0.47%.
This ETF also isn't the most security-focused around. While many of the large cybersecurity players are in the portfolio, it also has a smattering of cloud computing names that are in security-adjacent niches.
5. WisdomTree Cybersecurity Fund
6. Vanguard Information Technology ETF
NYSEMKT: VGT
Key Data Points
Vanguard, whose founder, Jack Bogle, invented the index fund in 1976, doesn't have a specific ETF solely focused on cybersecurity. However, the Vanguard Information Technology ETF (VGT -1.01%) is worth mentioning. It is a broad-based index of the U.S. technology sector and is full of cybersecurity companies and other large businesses involved in security in some form.
With an annual expense ratio of just 0.09% and about 320 total holdings, the Vanguard Information Technology ETF is a great way for investors to get passive exposure to the development of cybersecurity, along with other growth trends in technology, such as cloud computing and semiconductor designers. The fund has been around since 2004 and has averaged 14.5% annually in total returns.
Pros and cons of investing in cybersecurity ETFs
Like most investments, there are pros and cons of buying cybersecurity ETFs in your portfolio. Here are a few of the benefits and potential drawbacks:
Pros:
- Broad exposure to cybersecurity without too much exposure to any individual stock.
- Takes the need to research stocks out of the equation.
- You'll make money if the cybersecurity industry does well, regardless of the top performers.
Cons:
- Cybersecurity ETFs have fees that tend to be on the higher end for ETFs.
- Less upside potential compared with directly investing in the top cybersecurity companies individually.
Factors to consider when choosing a cybersecurity ETF
There are a few things to keep in mind as you start your cybersecurity ETF search, whether you're thinking of buying one of the ETFs discussed here or are evaluating other options:
- Fees - The ETF's expense ratio tells you how much you're paying in fees annually, as a percentage of your investment. This shouldn't be the only thing you consider, but if one fund is substantially cheaper than another, it's worth taking into consideration.
- Concentration - How much of an ETF's assets are in its largest holdings? Some ETFs are far more "top-heavy" than others, so be sure to check the holdings list.
- Stocks owned - Does an ETF focus on the large and most recognizable cybersecurity companies, or does it primarily own smaller, lesser-known companies? Both can be good ways to invest, but be sure you know what you're buying.
How to incorporate cybersecurity ETFs into your portfolio
Cybersecurity ETFs can serve several purposes in your investment portfolio. For one thing, they can give you exposure to the exciting opportunity of cybersecurity without the homework involved with choosing individual stocks. This way, you can win over the long term regardless of which individual companies end up on top.
They can also add diversification to your portfolio, especially if you don't already have much technology or cybersecurity-specific exposure.
Cybersecurity is a long-term investment
With computing technology infiltrating every corner of the global economy, cybersecurity is poised to be one of the most important secular growth trends of the next decade and beyond.
Individual stocks that develop security technology services will be volatile, but investing in a basket of them could yield big returns over the long term. An ETF is a quick and easy way to gain investment portfolio exposure to this critical segment of the tech sector.
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FAQ
Cybersecurity ETF FAQ
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