Investing in cyber security is becoming increasingly popular, and for good reason. With the onslaught of cyber attacks on the rise, having the right protection is becoming more of a necessity rather than just a luxury. But, sifting through all of the investment options can be confusing and leave investors feeling overwhelmed. Choosing the right Cyber Security Exchange-Traded Fund (ETF) can help simplify the process.
One of the strongest Cyber Security ETFs on the market is the First Trust Nasdaq Cybersecurity ETF (NASDAQ:CIBR). This ETF offers a diversified portfolio of companies involved in business activities that facilitate the provision of, or the development and production of, cybersecurity products and information technology security services and solutions. This includes companies that develop online security software, build firewalls and computer networks, and provide cybersecurity services.
The CIBR ETF offers investors access to a diversified portfolio of cyber security companies while providing a hedge against individual stocks. For example, if one company’s stock loses value, investors can hedge those losses by holding a portfolio of other cyber security companies. The ETF also has an impressive history of year-on-year growth. Over the last 5 years, the CIBR ETF has had an average annual return of 28%.
Another strong Cyber Security ETF to consider is the iShares Cyber Security and Tech ETF (NASDAQ:IHAK). This fund is comprised of a mix of technology and cyber security companies offering products and services to detect and counter the threats posed by cybercrime. These are companies that provide cloud computing, next-generation firewall protection, analytics and consulting, and many other services geared towards protecting businesses from cyberattacks.
The IHAK ETF has had a solid performance over the last five years, returning an average of 25% per year. It has also seen impressive returns in the last two years, achieving gains of 31.5% and 11.8% respectively.
Ultimately, when it comes to determing which Cyber Security ETF to invest in, each investor’s goals and risk tolerance should be taken into account. However, the two ETFs mentioned here have proven track records of strong performance, making them great choices for any investor who is looking to add cyber security investments to their portfolio.