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) | 32 | 0.58% | $10.00 billion |
Amplify Cyber Security ETF (NYSEMKT:HACK) | 23 | 0.6% | $1.97 billion |
Global X Cybersecurity ETF (NASDAQ:BUG) | 29 | 0.51% | $853 million |
iShares Cybersecurity and Tech ETF (NYSEMKT:IHAK) | 38 | 0.47% | $735 million |
WisdomTree Cybersecurity Fund (NASDAQ:WCBR) | 25 | 0.45% | $120 million |
Vanguard Information Technology ETF (NYSEMKT:VGT) | 320 | 0.09% | $130 billion |
Xtrackers Cybersecurity Select ETF (NYSEMKT:PSWD) | 51 | 0.20% | $7.04 million |
1. First Trust Nasdaq Cybersecurity ETF
TSX: CIBR
Key Data Points
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 +0.93%). 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).
2. Amplify Cybersecurity ETF
NYSEMKT: HACK
Key Data Points
The Amplify Cybersecurity ETF (HACK -0.38%) 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.
3. Global X Cybersecurity ETF
NASDAQ: BUG
Key Data Points
A relative newcomer, the Global X Cybersecurity ETF (BUG -0.69%) 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 -1.14%), and Fortinet (FTNT -0.31%) 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.
4. iShares Cybersecurity and Tech ETF
NYSEMKT: IHAK
Key Data Points
NASDAQ: WCBR
Key Data Points
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 dedicated ETF focused on cybersecurity. However, the Vanguard Information Technology ETF (VGT -0.35%) 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.
7. Xtrackers Cybersecurity Select Equity ETF
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 tend to have fees on the higher end for ETFs.
- Lower upside potential than investing directly in the top cybersecurity companies.
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 shows how much you're paying in fees each year, 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 considering.
- 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.
Future outlook for the cybersecurity industry
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.
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
About the Author
Matt Frankel, CFP has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cisco Systems and Zscaler. The Motley Fool recommends BlackRock. The Motley Fool has a disclosure policy.
