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Strengthen Your Portfolio With These Cybersecurity ETFs
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Key Takeaways
AI safety concerns and rising cyber threats are creating new tailwinds for the cybersecurity sector.
The S&P Kensho Cyber Security Index has gained 49.2% YTD.
Cybersecurity ETFs offer diversified exposure to a sector benefiting from rising AI risks.
Despite growing concerns over AI safety, stretched valuations and financing risks, Wall Street has not given up on AI. While investors continue to debate whether the AI rally can be sustained, many market participants remain optimistic about the technology’s long-term potential.
The current market environment makes one thing clear — despite bouts of market volatility, AI is here to stay. AI-related stocks continue to drive gains. The tech-heavy Nasdaq Composite gained 0.45% on Tuesday, bringing its gains over the past five trading sessions to 2.25% and its one-month advance to 3.81%.
As AI integration accelerates, growing safety concerns are raising questions about the long-term outlook for AI infrastructure and the massive capital investments flowing into the ecosystem. One clear beneficiary, however, could be cybersecurity.
AI Safety Concerns Boost Cybersecurity Demand
As emphasis on AI safety and protection against emerging threats grows, cybersecurity firms could be well positioned to benefit from efforts to secure AI infrastructure and mitigate AI-related risks. As these risks evolve, protecting AI systems and infrastructure is likely to become a greater priority for businesses and economies, potentially creating an additional tailwind for cybersecurity companies.
The outlook for cybersecurity appears even more promising amid rising AI safety concerns, as reflected in the strong performance of the S&P Kensho Cyber Security Index. The index, which tracks companies with significant exposure to cybersecurity-related activities, has gained about 4% in October so far and 31.5% over the past year. The index has added around 49.2% year to date.
This theme is also supported by Morgan Stanley analysts, who have Overweight ratings on Palo AltoNetworks (PANW - Free Report) , CrowdStrike (CRWD - Free Report) and Okta (OKTA - Free Report) , citing increased attention to AI safety risks as a major tailwind for cybersecurity spending, as quoted on Yahoo Finance.
Morgan Stanley also forecasts 23% annual growth in corporate cybersecurity software spending through 2028, with growth potentially reaching 33% if major cyberattacks trigger new government mandates.
AI Safety Concerns Isn’t the Only Cybersecurity Catalyst
The rising threat of AI-enabled cybercrime makes AI expansion and cybersecurity demand two sides of the same coin, as the growth of one increasingly drives the need for the other. As AI makes cyberattacks more sophisticated and scalable, the need for stronger cybersecurity defenses is becoming increasingly important.
The risk posed by rogue AI agents is reinforced by Jay Chaudhry, founder and CEO of Zscaler (ZS - Free Report) , as quoted on another Yahoo Finance article. According to Chaudhry, rogue AI agents represent one of the biggest risks today. Without proper monitoring and centralized controls, AI agents can make unintended mistakes, expose sensitive customer information and increase cyberattack risks.
Additionally, the long-term outlook for cybersecurity is also supported by the growing role of cyberwarfare in an increasingly fragile geopolitical environment. As conflicts extend into the digital domain, rising cyberattacks are driving greater investment in military-grade cybersecurity, strengthening the sector’s long-term growth prospects.
Why Cybersecurity Deserves a Bigger Portfolio Allocation
One factor that sets cybersecurity apart is its potential resilience in the current economic environment. Cyber threats persist across market conditions, making cybersecurity a relatively resilient investment theme across both bull and bear markets.
At the same time, AI cannot scale securely without robust cybersecurity infrastructure, making cybersecurity a complementary theme for investors seeking exposure to the broader AI growth story.
This combination of resilience and AI-driven demand strengthens cybersecurity’s appeal as an investment theme, offering an opportunity for investors across a range of views on the AI trade.
ETFs to Invest in Cybersecurity
This backdrop highlights why cybersecurity funds deserve a place on investors’ radar, regardless of their outlook on the AI trade. This is where cybersecurity ETFs come into play.
For investors looking to increase their exposure to cybersecurity, ETFs offer a convenient way to gain diversified access to the broader cybersecurity landscape. By spreading exposure across cybersecurity players positioned to benefit from the highly optimistic outlook for the sector, these funds offer investors a way to participate in the sector’s growth without having to pick individual winners.
Here are a few cybersecurity ETFs worth considering for investors looking to capitalize on the sector’s growth potential.
First Trust NASDAQ Cybersecurity ETF seeks to track the performance of the Nasdaq CTA Cybersecurity Index. The fund charges an annual fee of 0.58% and has an asset base of $17.94 billion. CIBR has a one-month average trading volume of about 1.77 million shares and a dividend yield of 0.37%.
First Trust NASDAQ Cybersecurity ETF has gained around 3% since the start of the week and about 15% over the past month. The fund has added around 51% year to date and about 38% over the past year.
Amplify Cybersecurity ETF seeks to track the performance of the Nasdaq ISE Cyber Security Select Index. The fund charges an annual fee of 0.60% and has an asset base of $3.39 billion. HACK has a one-month average trading volume of about 337,000 shares and a dividend yield of 0.05%.
Amplify Cybersecurity ETF has gained around 3.8% since the start of the week and about 16% over the past month. The fund has added around 59% year to date and about 43% over the past year.
Global X Cybersecurity ETF seeks to track the performance of Indxx Cybersecurity Index. The fund charges an annual fee of 0.50% and has an asset base of $2.16 billion. BUG has a one-month average trading volume of about 1.45 million shares and a dividend yield of 0.02%.
Global X Cybersecurity ETF has gained around 3.8% since the start of the week and about 19.3% over the past month. The fund has added around 60% year to date and about 36% over the past year.
iShares Cybersecurity & Tech ETF seeks to track the performance of the NYSE FactSet Global Cyber Security Index. The fund charges an annual fee of 0.47% and has an asset base of $1.18 billion. IHAK has a one-month average trading volume of about 144,000 shares and a dividend yield of 0.06%.
iShares Cybersecurity & Tech ETF has gained around 3.1% since the start of the week and about 13.5% over the past month. The fund has added around 47% year to date and about 33% over the past year.
WisdomTree Cybersecurity Fund seeks to track the performance of WisdomTree Team8 Cybersecurity Index. The fund charges an annual fee of 0.45% and has an asset base of $193.1 million. WCBR has a one-month average trading volume of about 90,000 shares.
WisdomTree Cybersecurity Fund has gained around 3.2% since the start of the week and about 22% over the past month. The fund has added around 73% year to date and about 49% over the past year.
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Strengthen Your Portfolio With These Cybersecurity ETFs
Key Takeaways
Despite growing concerns over AI safety, stretched valuations and financing risks, Wall Street has not given up on AI. While investors continue to debate whether the AI rally can be sustained, many market participants remain optimistic about the technology’s long-term potential.
The current market environment makes one thing clear — despite bouts of market volatility, AI is here to stay. AI-related stocks continue to drive gains. The tech-heavy Nasdaq Composite gained 0.45% on Tuesday, bringing its gains over the past five trading sessions to 2.25% and its one-month advance to 3.81%.
As AI integration accelerates, growing safety concerns are raising questions about the long-term outlook for AI infrastructure and the massive capital investments flowing into the ecosystem. One clear beneficiary, however, could be cybersecurity.
AI Safety Concerns Boost Cybersecurity Demand
As emphasis on AI safety and protection against emerging threats grows, cybersecurity firms could be well positioned to benefit from efforts to secure AI infrastructure and mitigate AI-related risks. As these risks evolve, protecting AI systems and infrastructure is likely to become a greater priority for businesses and economies, potentially creating an additional tailwind for cybersecurity companies.
The outlook for cybersecurity appears even more promising amid rising AI safety concerns, as reflected in the strong performance of the S&P Kensho Cyber Security Index. The index, which tracks companies with significant exposure to cybersecurity-related activities, has gained about 4% in October so far and 31.5% over the past year. The index has added around 49.2% year to date.
This theme is also supported by Morgan Stanley analysts, who have Overweight ratings on Palo Alto Networks (PANW - Free Report) , CrowdStrike (CRWD - Free Report) and Okta (OKTA - Free Report) , citing increased attention to AI safety risks as a major tailwind for cybersecurity spending, as quoted on Yahoo Finance.
Morgan Stanley also forecasts 23% annual growth in corporate cybersecurity software spending through 2028, with growth potentially reaching 33% if major cyberattacks trigger new government mandates.
AI Safety Concerns Isn’t the Only Cybersecurity Catalyst
The rising threat of AI-enabled cybercrime makes AI expansion and cybersecurity demand two sides of the same coin, as the growth of one increasingly drives the need for the other. As AI makes cyberattacks more sophisticated and scalable, the need for stronger cybersecurity defenses is becoming increasingly important.
The risk posed by rogue AI agents is reinforced by Jay Chaudhry, founder and CEO of Zscaler (ZS - Free Report) , as quoted on another Yahoo Finance article. According to Chaudhry, rogue AI agents represent one of the biggest risks today. Without proper monitoring and centralized controls, AI agents can make unintended mistakes, expose sensitive customer information and increase cyberattack risks.
Additionally, the long-term outlook for cybersecurity is also supported by the growing role of cyberwarfare in an increasingly fragile geopolitical environment. As conflicts extend into the digital domain, rising cyberattacks are driving greater investment in military-grade cybersecurity, strengthening the sector’s long-term growth prospects.
Why Cybersecurity Deserves a Bigger Portfolio Allocation
One factor that sets cybersecurity apart is its potential resilience in the current economic environment. Cyber threats persist across market conditions, making cybersecurity a relatively resilient investment theme across both bull and bear markets.
At the same time, AI cannot scale securely without robust cybersecurity infrastructure, making cybersecurity a complementary theme for investors seeking exposure to the broader AI growth story.
This combination of resilience and AI-driven demand strengthens cybersecurity’s appeal as an investment theme, offering an opportunity for investors across a range of views on the AI trade.
ETFs to Invest in Cybersecurity
This backdrop highlights why cybersecurity funds deserve a place on investors’ radar, regardless of their outlook on the AI trade. This is where cybersecurity ETFs come into play.
For investors looking to increase their exposure to cybersecurity, ETFs offer a convenient way to gain diversified access to the broader cybersecurity landscape. By spreading exposure across cybersecurity players positioned to benefit from the highly optimistic outlook for the sector, these funds offer investors a way to participate in the sector’s growth without having to pick individual winners.
Here are a few cybersecurity ETFs worth considering for investors looking to capitalize on the sector’s growth potential.
First Trust NASDAQ Cybersecurity ETF (CIBR - Free Report)
First Trust NASDAQ Cybersecurity ETF seeks to track the performance of the Nasdaq CTA Cybersecurity Index. The fund charges an annual fee of 0.58% and has an asset base of $17.94 billion. CIBR has a one-month average trading volume of about 1.77 million shares and a dividend yield of 0.37%.
First Trust NASDAQ Cybersecurity ETF has gained around 3% since the start of the week and about 15% over the past month. The fund has added around 51% year to date and about 38% over the past year.
Amplify Cybersecurity ETF (HACK - Free Report)
Amplify Cybersecurity ETF seeks to track the performance of the Nasdaq ISE Cyber Security Select Index. The fund charges an annual fee of 0.60% and has an asset base of $3.39 billion. HACK has a one-month average trading volume of about 337,000 shares and a dividend yield of 0.05%.
Amplify Cybersecurity ETF has gained around 3.8% since the start of the week and about 16% over the past month. The fund has added around 59% year to date and about 43% over the past year.
Global X Cybersecurity ETF (BUG - Free Report)
Global X Cybersecurity ETF seeks to track the performance of Indxx Cybersecurity Index. The fund charges an annual fee of 0.50% and has an asset base of $2.16 billion. BUG has a one-month average trading volume of about 1.45 million shares and a dividend yield of 0.02%.
Global X Cybersecurity ETF has gained around 3.8% since the start of the week and about 19.3% over the past month. The fund has added around 60% year to date and about 36% over the past year.
iShares Cybersecurity & Tech ETF (IHAK - Free Report)
iShares Cybersecurity & Tech ETF seeks to track the performance of the NYSE FactSet Global Cyber Security Index. The fund charges an annual fee of 0.47% and has an asset base of $1.18 billion. IHAK has a one-month average trading volume of about 144,000 shares and a dividend yield of 0.06%.
iShares Cybersecurity & Tech ETF has gained around 3.1% since the start of the week and about 13.5% over the past month. The fund has added around 47% year to date and about 33% over the past year.
WisdomTreeCybersecurity Fund (WCBR - Free Report)
WisdomTree Cybersecurity Fund seeks to track the performance of WisdomTree Team8 Cybersecurity Index. The fund charges an annual fee of 0.45% and has an asset base of $193.1 million. WCBR has a one-month average trading volume of about 90,000 shares.
WisdomTree Cybersecurity Fund has gained around 3.2% since the start of the week and about 22% over the past month. The fund has added around 73% year to date and about 49% over the past year.