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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.

Given the growing demand for cybersecurity, it's no surprise that there are a number of ETF options to choose from.
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:
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:
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.
While there's no way to predict with any accuracy what any individual cybersecurity stocks or ETFs will do over a given period of time, there are some good reasons to consider adding some exposure to your portfolio.
The global cybersecurity market is estimated at about $248 billion in 2026 and is expected to reach nearly $700 billion by 2034, as AI advancements, quantum computing, and other emerging technologies create a growing need for threat detection. AI, in particular, could be both a benefit and a threat, as it creates a massive expansion in the volume of data flowing around the world, but also the possibility of AI-driven malware. In short, while it's tough to pick individual winners, it's fair to say the cybersecurity industry has massive opportunities ahead, which is a strong argument for using the ETF approach to invest.
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.





With over $11 billion in assets under management, the First Trust Nasdaq Cybersecurity ETF (CIBR +0.25%) is by far the largest pure-play ETF in this part of the technology sector. This large financial services firm offers a variety of investment products, and its cybersecurity offering is one of the longest-tenured in the ETF world. Its inception dates back to 2015, and the fund's shares have more than tripled since then.
The First Trust Cybersecurity ETF currently comprises 32 cybersecurity companies, almost all of which are listed on a U.S. stock exchange. A handful of stocks are in adjacent industries, such as aerospace and defense, where security services are prominently featured.
At the time of this writing, the top three holdings (which comprise about 24% of the fund's assets) are large tech companies Broadcom (NASDAQ:AVGO), Palo Alto Networks (NASDAQ: PANW), and Cisco Systems Inc. (CSCO +1.17%). The ETF is rebalanced quarterly and has an annual expense ratio of 0.58% ($5.80 in fees are deducted from the fund's performance each year for every $1,000 invested).
The Amplify Cybersecurity ETF (HACK +0.33%) has been around since 2014 and has amassed $2 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 comprises just 23 stocks.
That means greater portfolio concentration in top names in the industry and fewer of the fund's investments in smaller companies and international investments. There is significant overlap in the portfolios, as Broadcom is the Amplify fund's largest holding.
A relative newcomer, the Global X Cybersecurity ETF (BUG +0.23%) was launched in late 2019. It has grown to more than $850 million in investor funds and has outperformed both First Trust and Amplify since its launch. This Global X ETF is one of the more concentrated on this list, with just 29 stocks, and is heavily weighted toward large cybersecurity software companies.
As of Spring 2026, and Palo Alto Networks, Akamai Technologies (AKAM +1.05%), and Fortinet (FTNT -0.34%) made up almost 27% of the fund's total assets. Like the other ETFs here, Global X's product pays little in dividends since the cybersecurity industry is focused primarily on growth. However, it has outperformed its peers in its short history.
The Xtrackers Cybersecurity Select Equity ETF (PSWD +0.39%) is a relative newcomer, formed in mid-2023, and is the smallest ETF on this list by far, with just $7 million in assets. But it could be worth a look, as with a 0.20% expense ratio, it is by far the cheapest of the pure-play cybersecurity ETFs on this list.
It is a more diversified fund than most of the other pure plays, with about 50 holdings. Palo Alto, Akamai, and Fortinet round out the top three, and there is substantial exposure to international cybersecurity stocks as well.

Also launched in 2019, the iShares Cybersecurity and Tech ETF (IHAK +0.51%) comes from one of the largest financial institutions in the world: BlackRock (BLK +0.13%). It comprises 38 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 includes a smattering of cloud computing names in security-adjacent niches.
Vanguard, whose founder Jack Bogle invented the index fund in 1976, doesn't have a dedicated ETF focused on cybersecurity. However, the Vanguard Information Technology ETF (VGT +0.26%) 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 13.8% annually in total returns.
The WisdomTree Cybersecurity Fund (WCBR -0.26%) is the newest ETF on this list, with an inception date of January 2021. While the company has accumulated only $120 million in assets so far, it offers a competitively priced product with annual fees of only 0.45%.
This ETF is one of the most concentrated funds here, with just 25 cybersecurity stocks. CrowdStrike is the largest position, while Datadog (DDOG -0.88%) and Cyberark Software (NASDAQ:CYBR) round out the top three. The stocks within this ETF are rebalanced twice a year.