The global cybersecurity market is expected to expand at a healthy compound annual growth rate (CAGR) of 10.0% through 2027 as cybercrime affects more individuals, companies, and governments. Investors seeking to profit from this trend may consider owning a wide spectrum of cybersecurity stocks through exchange-traded funds (ETFs). Betting on individual stocks can be especially risky in young, fast-evolving industries. The cybersecurity industry as represented by the S&P Kensho Cyber Security Index has exactly matched the performance of the broader market in the past year. Both the cybersecurity index and the S&P 500 have 1-year trailing total returns of 22.1%.
- The cybersecurity industry has exactly matched the performance of the S&P 500 in the past year.
- The ETFS with the best 1-year trailing total return are IHAK, HACK, and CIBR.
- The top holdings of these ETFs are DocuSign Inc., SailPoint Technologies Holdings Inc., and Crowdstrike Holdings Inc., respectively.
There are 4 ETFs focused on the cybersecurity sector. The best performing cybersecurity sector ETF is the iShares Cybersecurity and Tech ETF (IHAK). Below, we'll look at the top 3 cybersecurity ETFs as measured by 1-year trailing total returns. All data is as of August 31, 2020.
- 1-Year Trailing Total Return: 39.1%
- Expense Ratio: 0.47%
- Annual Dividend Yield: 0.71%
- 3-Month Average Daily Volume: 61,471
- Assets Under Management: $123.9 million
- Inception Date: June 11, 2019
- Issuer: iShares
IHAK is a multi-cap blended fund focused on U.S.-listed technology cybersecurity companies. The fund tracks the NYSE FactSet Global Cyber Security Index, which has more than 40 cybersecurity stocks focused on hardware, software, and other services. The fund's top holdings include DocuSign Inc. (DOCU), the electronic agreements manager; Zscaler Inc. (ZS), the cloud-based information security firm; and Crowdstrike Holdings Inc. (CRWD), the threat intelligence and cyberattack response company.
- 1-Year Trailing Total Return: 33.1%
- Expense Ratio: 0.60%
- Annual Dividend Yield: 1.30%
- 3-Month Average Daily Volume: 173,367
- Assets Under Management: $1.6 billion
- Inception Date: November 12, 2014
- Issuer: ETF Managers Group
HACK tracks the ISE Cyber Security Index, which focuses on companies developing hardware and software to protect data as well as companies providing cybersecurity services. HACK is the first ETF to focus on the cybersecurity industry and classifies its holdings as either infrastructure or service providers. The fund's top holdings include SailPoint Technologies Holdings Inc. (SAIL), the identity governance company; Cloudflare Inc. (NET), the website security company; and Splunk Inc. (SPLK), the data analytics company.
- 1-Year Trailing Total Return: 30.2%
- Expense Ratio: 0.60%
- Annual Dividend Yield: 1.33%
- 3-Month Average Daily Volume: 451,198
- Assets Under Management: $2.2 billion
- Inception Date: July 6, 2015
- Issuer: First Trust
CIBR is a multi-cap growth fund targeting U.S.-listed stocks. The fund tracks the NASDAQ CTA Cyber Security Index. Its holdings must be classified as a cybersecurity company by the Consumer Technology Association and have a minimum market cap of $250 million. The fund's top holdings include Crowdstrike Holdings; Splunk; and Broadcom Inc. (AVGO), the semiconductor and infrastructure software company.