5 Best Cybersecurity ETFs

In this article, we discuss 5 best cybersecurity ETFs to buy. If you want to read our detailed discussion on the cybersecurity market, head over to 10 Best Cybersecurity ETFs. 

5. iShares Cybersecurity and Tech ETF (NYSE:IHAK)

5-Year Performance as of August 6: 51.16%

iShares Cybersecurity and Tech ETF (NYSE:IHAK)’s main objective is to mirror the performance of the NYSE FactSet Global Cyber Security Index. This index comprises companies from both developed and emerging markets that operate in the fields of cyber security and technology. Established on June 11, 2019, the ETF holds net assets totaling $592 million as of August 4, 2023. iShares Cybersecurity and Tech ETF (NYSE:IHAK) has 37 stocks in its portfolio and comes with an expense ratio of 0.47%. It is one of the best cybersecurity ETFs to invest in. 

Science Applications International Corporation (NYSE:SAIC) is the largest holding of the iShares Cybersecurity and Tech ETF (NYSE:IHAK). Science Applications International Corporation (NYSE:SAIC) delivers technical, engineering, and IT services within the United States, offering technology integration, IT modernization, security, maintenance, training, and more. Their clientele spans U.S. military branches, NASA, Department of Defense, and Homeland Security, as well as federal civilian agencies. On June 5, Science Applications International Corporation (NYSE:SAIC) reported its results for the first quarter of fiscal 2024. The company reported a non-GAAP EPS of $2.14 and a revenue of $2.03 billion, outperforming Wall Street estimates by $0.33 and $70 million, respectively. 

According to Insider Monkey’s first quarter database, 17 hedge funds were bullish on Science Applications International Corporation (NYSE:SAIC), compared to 19 funds in the prior quarter. Phill Gross and Robert Atchinson’s Adage Capital Management is the leading position holder in the company, with 648,258 shares worth approximately $70 million. 

Here is what FPA Queens Road Small Cap Value Fund has to say about Science Applications International Corporation (NYSE:SAIC) in its Q4 2021 investor letter:

“Science Applications International Corp., a federal information technology contractor, declined during the year. The company which derives 98% of its revenue from the federal government, is a slow-growing, consistently profitable IT provider that supplements organic growth with add-on acquisitions. It operates in a competitive, low-margin business, but given the company’s visibility, entrenched position, and low valuation, we remain positive on the company’s outlook.”

4. SPDR S&P Software & Services ETF (NYSE:XSW)

5-Year Performance as of August 6: 57.34%

SPDR S&P Software & Services ETF (NYSE:XSW)’s main objective is to achieve investment results that closely match the overall return performance of the S&P Software & Services Select Industry Index. The ETF was introduced on September 28, 2011, and offers an expense ratio of 0.35% as of August 7, 2023. The fund holds net assets amounting to $320.67 million and a portfolio comprising 150 stocks. SPDR S&P Software & Services ETF (NYSE:XSW) is one of the best cybersecurity ETFs to watch. 

Palantir Technologies Inc. (NYSE:PLTR) is one of the top holdings of SPDR S&P Software & Services ETF (NYSE:XSW). Palantir Technologies Inc. (NYSE:PLTR) develops and implements software systems for the US intelligence community, aiding in counterterrorism inquiries and activities. On July 28, Wedbush Securities analyst Dan Ives initiated coverage of Palantir Technologies Inc. (NYSE:PLTR) with an Outperform rating and a price target of $25, noting that the company has constructed an unparalleled “AI fortress,” positioning it to have a significant role in the forthcoming artificial intelligence revolution.

According to Insider Monkey’s first quarter database, 31 hedge funds were bullish on Palantir Technologies Inc. (NYSE:PLTR), compared to 28 funds in the prior quarter. D E Shaw held the largest stake in the company, with 11.8 million shares worth just over $100 million. 

Here is what Tao Value has to say about Palantir Technologies Inc. (NYSE:PLTR) in its Q4 2021 investor letter:

“We have no new position this quarter and have made below changes to our portfolio. We also sold Palantir (PLTR) as I identified it subject to high retail bubble risk (using above method) and are not part of our core “Mindful Compounder” holdings.”

3. Evolve Cyber Security Index Fund (TSE:CYBR-B.TO)

5-Year Performance as of August 6: 57.55%

Evolve Cyber Security Index Fund (TSE:CYBR-B.TO) aims to mirror the results of the Solactive Global Cyber Security Index Canadian Dollar Hedged. The fund mainly invests in companies, whether domestic or global, engaged in cyber security via hardware and software development. Established on September 18, 2017, the ETF charges a management fee of 0.40%. Evolve Cyber Security Index Fund (TSE:CYBR-B.TO)’s portfolio consists of 39 stocks. It is one of the best cybersecurity ETFs to invest in. 

CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is one of the top holdings of Evolve Cyber Security Index Fund (TSE:CYBR-B.TO). CrowdStrike Holdings, Inc. (NASDAQ:CRWD) delivers cloud-based security solutions for endpoints, cloud workloads, identity, and data. On July 26, CrowdStrike Holdings, Inc. (NASDAQ:CRWD) announced that it is nearing the acquisition of cybersecurity startup Bionic.AI for an estimated acquisition cost ranging from $200 million to $300 million. Bionic.ai, based in Palo Alto, California, has secured $82 million in venture capital funding.

According to Insider Monkey’s first quarter database, 72 hedge funds were bullish on CrowdStrike Holdings, Inc. (NASDAQ:CRWD), compared to 66 funds in the last quarter. Ken Griffin’s Citadel Investment Group is the largest stakeholder of the company. 

Artisan Developing World Fund made the following comment about CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its Q1 2023 investor letter:

“Top contributors to performance for the quarter included graphics semiconductor company Nvidia, Southeast Asian e-commerce platform Sea, Latin American marketplace MercadoLibre, online travel marketplace Airbnb, and endpoint security company CrowdStrike Holdings, Inc. (NASDAQ:CRWD). CrowdStrike rebounded as its financial results eased demand-related concerns in its core endpoint business, while adoption in platform adjacencies continued to rise.”

2. First Trust NASDAQ Cybersecurity ETF (NASDAQ:CIBR)

5-Year Performance as of August 6: 66.58%

First Trust NASDAQ Cybersecurity ETF (NASDAQ:CIBR)’s primary goal is to track the price and yield performance of the Nasdaq CTA Cybersecurity Index. This index is designed to monitor the performance of firms operating within the cybersecurity sector. The ETF’s inception date was July 6, 2015, and it currently offers an expense ratio of 0.60%. As of August 4, 2023, the fund holds around $5 billion in net assets and has a portfolio comprising 35 stocks. First Trust NASDAQ Cybersecurity ETF (NASDAQ:CIBR) is one of the best cybersecurity ETFs to buy. 

Fortinet, Inc. (NASDAQ:FTNT) is one of the top holdings of First Trust NASDAQ Cybersecurity ETF (NASDAQ:CIBR). The company provides cybersecurity and networking solutions worldwide. On August 3, Fortinet, Inc. (NASDAQ:FTNT) reported a Q2 non-GAAP EPS of $0.38, beating market consensus by $0.04. The revenue increased 25.2% year-over-year to $1.29 billion, however, it fell short of Street estimates by $10 million. 

According to Insider Monkey’s first quarter database, Fortinet, Inc. (NASDAQ:FTNT) was part of 45 hedge fund portfolios, compared to 47 in the prior quarter. Andreas Halvorsen’s Viking Global is the leading stakeholder of the company, with 11.8 million shares worth $789.2 million. 

Conestoga Mid Cap Strategy made the following comment about Fortinet, Inc. (NASDAQ:FTNT) in its Q1 2023 investor letter:

“Fortinet, Inc. (NASDAQ:FTNT): FTNT is the worldwide market share leader in network security firewalls (by units). During the quarter, FTNT reported solid earnings and put forth better-than-feared 2023 guidance as demand appears to be more resilient (and broad-based) than expected. The company has been able to ship more firewalls as supply chain issues (primarily semiconductor chips) have eased considerably. As the ‘attack surface’ increases with ever more devices connected to the internet, FTNT’s long-term opportunities remain bright.”

1. Vanguard Information Technology Index Fund (NYSE:VGT)

5-Year Performance as of August 6: 125.97%

Vanguard Information Technology Index Fund (NYSE:VGT) aims to mirror the Information Technology Spliced Index’s performance, which gauges the returns of information technology sector stocks. Employing a passive approach, the fund follows a full-replication strategy. With an expense ratio of 0.10%, Vanguard Information Technology Index Fund (NYSE:VGT)’s net assets as of June 30, 2023 reached $61.3 billion. It is one of the top cybersecurity ETFs.

Cisco Systems, Inc. (NASDAQ:CSCO) is a prominent holding of Vanguard Information Technology Index Fund (NYSE:VGT). The company designs, manufactures, and sells networking and IT products worldwide. Cisco Systems, Inc. (NASDAQ:CSCO)’s offerings include networking, switching, routing, wireless, compute, and security products. On June 20, Cisco Systems, Inc. (NASDAQ:CSCO) introduced two AI-focused networking chips, the G200 and G202, to compete with existing market options. These chips aim to enhance AI and machine learning efficiency, potentially reducing switch usage by 40% and networking layers by 3%. This could result in a smaller carbon footprint for AI clusters, saving up to 9 million kWh annually, equivalent to 7.3 million pounds of coal or over 6,000 metric tons of carbon dioxide.

According to Insider Monkey’s first quarter database, Cisco Systems, Inc. (NASDAQ:CSCO) was part of 61 hedge fund portfolios, compared to 70 in the prior quarter. Cliff Asness’ AQR Capital Management is the leading stakeholder of the company, with 9.5 million shares worth $493.3 million. 

Artisan Value Fund made the following comment about Cisco Systems, Inc. (NASDAQ:CSCO) in its Q4 2022 investor letter:

“We had one sale this quarter, exiting network equipment company Cisco Systems, Inc. (NASDAQ:CSCO). We chose to use the proceeds on more attractive value opportunities as Cisco’s growth has come in below what we had hoped for, and the company is increasingly looking at M&A to augment its growth rate.”

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out 10 Oversold Blue Chip Stocks To Buy and 15 Countries with the Most IKEA Stores Worldwide in 2023.