With evolving cyber threats like ransomware and AI-driven attacks, businesses increasingly rely on advanced, AI-driven cybersecurity tools for real-time threat detection and mitigation. This growing need makes the cybersecurity ETFs a promising investment opportunity.
Therefore, investors might consider buying top cybersecurity ETFs: Global X Cybersecurity ETF (BUG), Amplify Cybersecurity ETF (HACK), and First Trust NASDAQ Cybersecurity ETF (CIBR).
Ransomware now threatens data leaks, making protection and response plans essential. As Zero Trust standards rise, businesses need strict access controls and multi-factor authentication, driving demand for cybersecurity. Stricter data privacy laws like GDPR and CCPA also require stronger data protection, further boosting cybersecurity market sentiment.
Moreover, the rising adoption of cybersecurity products is driven by automation tools that streamline real-time monitoring, threat detection, and response, reducing manual costs. These tools enhance remote work security through automated encryption, access controls, and continuous monitoring, fueling demand. Global spending on information security is projected to reach $212 billion in 2025, up 15.1% from 2024.
This growing demand for cybersecurity, combined with the diversified exposure offered by cybersecurity ETFs, makes these investments hard to overlook. They reduce the risk of single-stock investments while simplifying portfolio management. Notably, the global cybersecurity market is projected to expand from $193.73 billion in 2024 to $562.72 billion by 2032, with a CAGR of 14.3%.
With this promising outlook, let's dive into the top three Technology Equities ETFs, starting with number three.
ETF #3: Global X Cybersecurity ETF (BUG)
BUG is an exchange-traded fund launched and managed by Global X Management Company LLC. It invests globally in public equity markets, focusing on companies that develop and manage security protocols to prevent intrusions on systems, networks, applications, computers, and mobile devices, known as cybersecurity companies. It targets the information technology sector, investing in growth and value stocks across various market capitalizations. BUG seeks to track the performance of the Indxx Cybersecurity Index using a full replication technique.
With $774.70 million in AUM, the fund has a total of 23 holdings. BUG’s top holding is Palo Alto Networks, Inc. (PANW) with an 7.29% weighting, followed by Fortinet, Inc. (FTNT), with a 6.93% weighting, and Check Point Software Technologies Ltd. (CHKP) with 6.50%.
BUG has an expense ratio of 0.50%, lower than the category average of 0.58%. It currently has a NAV of $32.59. Its fund outflows came in at $16.40 million over the past month.
BUG has gained 14.3% over the past six months and 35.7% over the past year to close the last trading session at $32.77.
BUG’s strong outlook is reflected in its POWR Ratings. The ETF has an overall rating of A, translating to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
It has an A grade for Buy & Hold and Trade. Of the 119 ETFs in the B-rated Technology Equities ETFs group, it is ranked #28. Click here to access all of BUG’s POWR Ratings.
ETF #2: Amplify Cybersecurity ETF (HACK)
HACK is an exchange-traded fund launched and managed by Amplify Investments LLC and co-managed by Tidal Investments LLC. It invests in public equity markets worldwide, focusing on stocks of companies operating in the cybersecurity sector. The fund targets both growth and value stocks across diversified market capitalizations and seeks to track the performance of the Nasdaq ISE Cyber Security Select Index using a full replication technique.
With $1.86 billion in AUM, the fund has a total of 26 holdings. HACK’s top holding is Broadcom Inc. (AVGO) with a 10.24% weighting, followed by Cisco Systems, Inc. (CSCO) with a 7.53% weighting, and PANW with 6.10%.
HACK has an expense ratio of 0.60%, higher than the category average of 0.58%. It currently has a NAV of $73.17. Its fund outflows came in at $10.36 million over the past month.
The fund’s annual dividend of $0.13 yields 0.18% on the current share price. Its four-year average yield is 0.29%. Its dividend payouts have increased at a CAGR of 21.7% over the past five years.
HACK has gained 22.8% year-to-date and 40.5% over the past year to close the last trading session at $74.16.
HACK’s strong outlook is reflected in its POWR Ratings. The ETF has an overall rating of A, translating to a Strong Buy in our proprietary rating system.
It has an A grade for Buy & Hold and Trade. It is ranked #18 in the same group. To access all the POWR Ratings for HACK, click here.
ETF #1: First Trust NASDAQ Cybersecurity ETF (CIBR)
CIBR is an exchange-traded fund launched and managed by First Trust Advisors LP. It invests in public equity markets worldwide, focusing on stocks of companies operating in information technology, software and services, and technology hardware and equipment sectors. The fund targets both growth and value stocks across diversified market capitalizations and seeks to track the performance of the NASDAQ CTA Cybersecurity Index using a full replication technique.
With $7.11 billion in assets under management (AUM), CIBR’s top holding is CSCO with an 8.62% weighting, followed by CrowdStrike Holdings, Inc. Class A (CRWD), with an 8.60% weighting, and AVGO, with 8.28%. CIBR has a total of 33 holdings.
CIBR has an expense ratio of 0.59%, higher than the category average of 0.58%. It currently has a NAV of $62.95. Its fund inflows came in at $181.61 million over the past year.
The ETF pays an annual dividend of $0.27, which yields 0.42% on the current price. It has a four-year average dividend yield of 0.49%. Its dividend payouts have increased at a CAGR of 64.4% over the past three years and 34% over the past five years.
CIBR has gained 38.9% over the past year and 17.2% over the past three months to close the last trading session at $63.73.
CIBR’s POWR Ratings reflect its promising prospects. The ETF’s overall A rating equates to a Strong Buy in our proprietary rating system.
CIBR has an A grade for Buy & Hold and Trade. In the Technology Equities ETFs group, it is ranked #6. Click here to access all of CIBR’s POWR Ratings.
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CIBR shares were trading at $64.59 per share on Monday afternoon, up $0.86 (+1.35%). Year-to-date, CIBR has gained 20.18%, versus a 27.16% rise in the benchmark S&P 500 index during the same period.
About the Author: Abhishek Bhuyan
Abhishek embarked on his professional journey as a financial journalist due to his keen interest in discerning the fundamental factors that influence the future performance of financial instruments.
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