Exchange-traded fund commonly known as ETFs acts as a type of security that tracks a sector, commodity, or other assets. Along with this ETFs can be purchased, sold, and traded on the stock exchange similar to an ordinary stock. They can also track anything from a singular asset to a variety of securities. While noting this is a new space, this post explores the best cybersecurity ETFs available to retail investors.

ETFs help investors in the early stages of their investing journey or those short on time to invest in securities in a particular sector. Additionally, the fact that ETFs act as a marketable security help investors buy and sell them easily on the marketplace. In 2020, $7.7 trillion was invested in ETFs. (To find out more on cryptocurrency ETFs click here).

Cybersecurity ETFs

Cybersecurity in the 21^st century is one of the fastest-growing industries. With the world becoming increasingly digital, more companies and individuals are investing in cybersecurity to protect themselves. This in turn creates a flourishing market of cybersecurity stock.

Cybersecurity ETFs provide investors with diversification across the sector, therefore, avoiding the risks involved with individual winners.

The Best Cybersecurity ETFs

These cybersecurity ETFs possess the best one-year total returns. They include:

CIBR

First Trust Nasdaq Cybersecurity ETF commonly known as CBR takes place as one of the best performing cybersecurity ETFs. It tracks the Nasdaq CTA cybersecurity index which analyses the performance of cybersecurity companies in the technology and industrial sector.

CIBR has $5.6 billion in assets under management with performance over one year of 24.3%. The top three holdings under CIBR include Class A shares of Accenture PLC, Cisco Systems Inc. and, Palo Alto Networks Inc.

BUG

BUG otherwise known as Global X Cybersecurity ETF comes in at a close second as one of the best performing cybersecurity ETFs in the market. Unlike CIBR, it tracks several companies in the cybersecurity sector. Thus, BUG invests in companies that stand to benefit from the growing need of cybersecurity against virtual threats. In addition to its 69% US holdings, BUG also has companies in Britain, Israel, and Japan.

BUG possesses $1.1 billion in assets under management with a performance over one year of 23.6%. The top three holdings under BUG include Palo Alto Networks, Check Point Software Technologies Ltd., and Fortinet Inc. 

IHAK

iShares Cybersecurity and Tech ETF also known as IHAK possesses a comparatively lower performance over one year of 13.8%. IHAK tracks the NYSE FactSet Global Cyber Security Index which consists of technology and cybersecurity stocks.

IHAK holds $647.7 million in assets under management since its inception in 2019. While the majority of its holdings lie in the US, IHAK also has some based in Canada, Israel, Japan, and Taiwan. The top three holdings for IHAK include DocuSign Inc., Fortinet, and Juniper Networks Inc.

HACK

HACK also known as ETFMG Prime CyberSecurity comes fourth in the best performing cybersecurity ETFs. It tracks a tiered and equal-weighted index that focuses on companies providing cybersecurity and technology services.

It is also one of the first ETFs in the market to focus solely on cybersecurity. It has a performance over a year of 7.23% in 2021 and $2.12 billion assets under management. The top three holdings under HACK include Cisco Systems Inc, KnowBe4 Inc Ordinary Shares – Class A and, Cloudflare Inc.

Comparison of Cybersecurity ETFs Options

ETF	Expense Ratio	Key Holdings	Annual dividend yield
CIBR	0.60%	Class A shares of Accenture PLC, Cisco Systems Inc. and, Palo Alto Networks Inc.	0.11%
IHAK	0.47%	DocuSign Inc. , Fortinet, and Juniper Networks Inc.	0.13%
BUG	0.50%	Palo Alto Networks, Check Point Software Technologies Ltd., and Fortinet Inc.	0.07%
HACK	0.60%	Cisco Systems Inc, KnowBe4 Inc Ordinary Shares – Class A and, Cloudflare Inc	0.27%