China-linked Salt Typhoon hackers breached nine companies, Russian-backed groups targeted Ukrainian military devices via Starlink, and Cyberhaven’s browser extension fell victim to hijacking.
These headlines kept newsrooms abuzz during the holiday season. Evidently, cybercrimes are here to stay and getting increasingly sophisticated to boot, thus necessitating larger investments in cybersecurity measures.
Here are three ETFs with exposure to cybersecurity companies for investors who don’t want to choose specific stocks, but want to reap the benefits of a hot market:
Global X Cybersecurity ETF BUG boasts assets of $806.52 million under management and an expense ratio of 0.50%. Its impressive portfolio of stocks includes the biggest names in the cybersecurity sector across the U.S., Israel, Japan and South Korea.
Fortinet Inc. FTNT, CrowdStrike Holdings CRWD, Check Point Software CHKP, Zscalar ZS, Palo Alto Networks PANW, and CyberArk Software CYBR are among the top 10 holdings, with 6.92%, 6.76%, 5.85%, 5.75%, 5.68%, and 5.14% allocations, respectively. Coming to some numbers, a Return on Equity of 17.80% and a drop in the P/E ratio from 48.06 in 2023 to 33.93 in 2024 might interest investors looking to cash in on the rising trend in cybersecurity.
The "O.G." cybersecurity-focused fund, the Amplify Cybersecurity ETF HACK was the first ETF to hop on the cybersecurity niche bandwagon. It derives its investment strategies from the Nasdaq ISE Cyber Security Select Index, and has $1.93 billion assets under management. 81.5% of the fund is dedicated to large-cap ($10 billion and more) stocks.
Broadcom AVGO, with its plethora of cybersecurity products, currently holds the biggest piece of the pie at almost 14%. Cisco Systems CSCO, Palo Alto, CrowdStrike, and Fortinet also hold significant portions of the fund. The ETF's expense ratio is 0.60%.
iShares Cybersecurity and Tech ETF IHAK is owned by one of the largest financial institutions in the world, BlackRock BLK. With an expense ratio of 0.47%, it is relatively cheaper than its peers. Though not entirely cybersecurity-focused, the fund with an AUM of $930 million, includes significant investments in security plays like CyberArk, Fortinet, CrowdStrike, Check Point and Palo Alto. The fund mirrors the NYSE FactSet Global Cyber Security Index, which is composed of cybersecurity companies.
Why Investing in Cybersecurity is Important
The growth in the number of generative A.I. tools and platforms is opening doors for information technology reinvention. Simultaneously, cybercriminals have been adopting the same upgraded technology to up their games.
In May, the FBI warned that attackers are now using A.I. tools to upgrade phishing methods. "As technology continues to evolve, so do cybercriminals’ tactics. Attackers are leveraging AI to craft highly convincing voice or video messages and emails to enable fraud schemes against individuals and businesses alike," said FBI Special Agent in Charge Robert Tripp.
“These sophisticated tactics can result in devastating financial losses, reputational damage, and compromise of sensitive data," read an excerpt from its note to media last May.
Moreover, Statista projects that the global “Estimated Cost of Cybercrime” will rise consistently between 2024 and 2029, increasing by $6.4 trillion (69.41%) to reach a peak of $15.63 trillion by 2029.
With critical infrastructure, government data, education, and personal data caught in the crosshairs, investments in cybersecurity have become the need of the hour, bringing exponential growth potential to this market.
See Next:
Photo: Shutterstock
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
