Best Cyber Security ETF UK – Compare Top ETFs 2021

Cyber security has never been more important than now. Hacks, ransomware and DDOS attacks have been rising exponentially over the past several years. This has led to an increase in demand for cyber security services causing stock and ETF prices covering this sector to surge higher. Cyber security is now one of the hottest sectors for investors to invest in. 

In this ‘Best Cyber Security ETF’ guide, we go through some of the best cyber security ETFs to invest in and how to invest in them 100% commission free!

Best Cyber Security ETF UK 2021 List

If you’re looking for the best cyber security ETF to invest in for this year, then look no further. Below is a list of the top 10 cyber security ETFs to focus on. 

1. First Trust Nasdaq Cybersecurity ETF – World’s Largest Cybersecurity  ETF – Invest now
2. Global X Cybersecurity ETF – Second Largest Cybersecurity Fund in the World – Invest now
3. L&G Cyber Security ETF – Best Tracker Fund of the ISE Cyber Security Index – Invest now
4. PureFunds ISE Cyber Security ETF – Rebranded to ETFMG  Prime Cyber Security ETF
5. ETFS ISE Cyber Security GO UCITS ETF – Ireland Based Cyber Security Fund
6. iShares Cybersecurity & Tech ETF – Top Rated Cybersecurity ETF Backed by BlackRock
7. WisdomeTree Cybersecurity Fund – Specialist Cybersecurity Investment Team
8. Rize Cybersecurity & Data Privacy ETF – Europe’s First Cybersecurity ETF
9. ProShares Ultra Nasdaq Cybersecurity Fund – 2x Leveraged Index ETF
10. Simplify Volt Cloud & Cybersecurity Disruption ETF – Cloud Computing & Cybersecurity Focused

These ETFs cover a wide range of ETF cyber security providers. Each of them will have a specific focus on the sector such as investing in cybersecurity companies, cloud computing stocks or data privacy stocks. 

Each of the ETFs will track the performance of a specific benchmark which is usually an index of the cybersecurity sector. They will also publish a prospectus which details their allocation, expense ratio, total return, market cap, ESG rating and NAV (net asset value).

In the next section, we go through each of these cyber security ETFs in detail and then go through a step by step process on how to invest in them 100% commission with top-rated broker eToro.

Best Cyber Security ETFs UK Reviewed

Let’s take a look at each one of the cybersecurity ETFs to find the right one for your investment objectives and investment strategy. 

1. First Trust Nasdaq Cybersecurity ETF – World’s Largest Cybersecurity  ETF

The First Trust Nasdaq Cybersecurity ETF (ticker CIBR) is the world’s largest exchange-traded fund that focuses on the cybersecurity sector. The aim of the fund is to seek returns that correspond to the price of the equity index Nasdaq CTA Cybersecurity Index. 

As such the fund investors into companies that are engaged in the creation, implementation and management of security protocols focused on public and private networks, mobiles and computers. 

For the fund to invest, the cybersecurity company must have a global market cap of $250 million and a three-month average daily trading volume of $1 million to ensure enough liquidity. 

The recent price action of the First Trust Nasdaq Cybersecurity ETF is shown above in a chart taken from eToro. The price activity of the ETF was fairly range based at the beginning of the year before breaking out into a long-term uptrend. 

The ransomware attack on the United State’s largest oil pipeline system called the Colonial Pipeline earlier in the year, has led to investors pouring into cybersecurity ETFs like this one. The stock is now trading at all-time high price levels and is at the top of the best cyber security ETF list. 

68% of retail investor accounts lose money when trading CFDs with this provider.

2. Global X Cybersecurity ETF – Second Largest Cybersecurity Fund in the World

The Global X Cybersecurity ETF (BUG) is the world’s second-largest cybersecurity fund. It has net assets of around $990 million and a low total expense ratio of 0.5%. 

Overall, the fund has 31 holdings which include popular cybersecurity companies such as Zscaler, Fortinet, Crowdstrike Holdings Inc, Palo Alto Networks and others. 

According to the fund’s factsheet, the aim of the fund is to invest in companies that are likely to benefit from the increased adoption of cybersecurity technology. This is mainly companies that focus on the development and management of security protocols that prevent attacks and intrusion into different systems. 

The Global X Cybersecurity ETF is up more than 100% since inception and is trading at record highs. This highlights the long term growth opportunities in the cybersecurity sector and why this ETF is considered one of the best cyber security ETFs around. 

68% of retail investor accounts lose money when trading CFDs with this provider.

3. L&G Cyber Security ETF – Best Tracker Fund of the ISE Cyber Security Index

The L&G Cyber Security UCITS ETF (HURNTR) is available to invest indirectly from the LGIM Cyber Security ETF product which is on the L&G Investment Management portal. It is a popular cyber security ETF UK product among UK investors. 

Essentially, the L&G Cyber Security ETF is a tracker fund of the ISE Cyber Security UCITS Index which is part of the Nasdaq ISE Indexes range. The L&G Cyber Security ETF has 63 securities in the fund which includes companies such as Darktrace and Palo Alto Networks. 

According to the L& Cyber Security UCITS ETF factsheet, the aim of the fund is to track the results of companies who are actively involved in providing cyber security services and technology. More than 85% of the fund is weighted towards the technology industry. 

Currently, the L&G Cyber Security UCITS ETF share price is trading at record highs. The ETF has been trending higher for many years and is likely to continue as the sector continues to grow. 

There is the L&G Cyber Security UCITS ETF (ISPY) which is denominated in the British pound (GBP), rather than US dollars (USD) like most cyber security ETFs. 

68% of retail investor accounts lose money when trading CFDs with this provider.

4. PureFunds ISE Cyber Security ETF – Rebranded to ETFMG  Prime Cyber Security ETF

The PureFunds ISE Cyber Security ETF was a very popular cyber security ETF. In 2017, the name changed to the ETFMG Prime Cyber Security ETF (HACK). The fund invests in companies that provide cyber security solutions over hardware and software services. 

The fund trades on NYSE Arca venue and has a low expense ratio of 0.60%. The fund aims to track the performance of the Prime Cyber Defense Index and currently has 63 holdings within it which are rebalanced quarterly. 

According to the fund’s factsheet, the top three largest holdings include Cloudflare (NET), Cisco Systems (CSCO) and Palo Alto Networks (PANW). 

Currently, the HACK ETF is trading at record highs after an impressive surge higher. While the ETF is already up more than 150% since inception, momentum is forecasted to continue as businesses adopt more cybersecurity solutions. 

68% of retail investor accounts lose money when trading CFDs with this provider.

5. ETFS ISE Cyber Security GO UCITS ETF – Ireland Based Cyber Security Fund

The ETFS ISE Cyber Cyber Security Go UCITS ETF is an Ireland-based cyber security fund that aims to track the performance of the ISE Cyber Security Index. The fund has units that are priced in US dollars (USD), euros (EUR) and British pounds (GBP). 

According to the fund’s fact sheet, the ETFS ISE Cyber Security ETF holds 57 stocks. Some of the largest holdings include Palo Alto Networks, Fortinet, Cyberark and Avast. 

The share price of the ETF has performed well since its inception and over the last five years as the chart above shows. The total expense ratio of the fund is 0.75% and is invested in stocks across a wide range of currencies but is unhedged. 

68% of retail investor accounts lose money when trading CFDs with this provider.

6. iShares Cybersecurity & Tech ETF – Top Rated Cybersecurity ETF Backed by BlackRock

iShares is one of the largest ETF providers in the world and was formed by the largest asset manager in the world BlackRock. The iShares Cybersecurity and Tech ETF’s (IHAK) aim is to invest in companies that are at the forefront of cybersecurity innovation. 

The fund aims to track the benchmark index fund NYSE FactSet Global Cyber Security Index. According to the fund’s factsheet, it holds 41 different cybersecurity stocks and has a very low expense ratio of just 0.47%. 

The biggest holdings in its fund include Zscaler (ZS), Fortinet (FTNT), CrowdStrike Holdings Inc (CRWD) and others. 

The iShares Cybersecurity and Tech ETF’s prospectus also provides hypothetical data on how much a $10,000 investment in the middle of 2019 would be worth now. From the chart above, that same investment would now be worth nearly $18,000. 

This highlights the opportunities available in the cybersecurity sector which is why this ETF is one of the best cyber security ETFs to consider. 

68% of retail investor accounts lose money when trading CFDs with this provider.

7. WisdomeTree Cybersecurity Fund – Specialist Cybersecurity Investment Team

The WisdomTree Cybersecurity Fund (WCBR.NV) is run by a team of financial professionals and specialists in cybersecurity called Team8. The aim of the fund is to target exposure to companies that are driving innovation in cybersecurity technologies. 

The fund has a low expense ratio of 0.45% and was only created at the beginning of 2021. According to the fund’s factsheet, the top holdings are Cloudflare (NET), Datadog (DDOG), Rapid7 (RPD) and CrowdStrike Holdings Inc (CRWD). 

While the fund may be new, it has performed relatively well over the past year. According to the WisdomeTree Cybersecurity Fund prospectus a $10,000 initial investment at the time of inception (28 January 2021), would now be worth $12,105. 

68% of retail investor accounts lose money when trading CFDs with this provider.

8. Rize Cybersecurity & Data Privacy ETF – Europe’s First Cybersecurity ETF

Rize ETF is Europe’s first specialist thematic ETF issuer. The investment team at Rize ETF have created Europe’s first cybersecurity and data privacy ETF which provides investors with exposure to companies that are likely to benefit from a rise in demand for cybersecurity services and products. 

The Rize Cybersecurity & Data Privacy ETF (CYBR) aims to track the performance of the Foxberry Tematica Research Cybersecurity & Data Privacy Index. The NAV per share is currently USD 7.9149 and the amount of the net assets total USD 130,534, 474. 

According to the fund’s factsheet, the fund has 56 holdings. Some of the top holdings include Cloudflare, Zscaler, Rapid7, Fortinet and Okta Inc.

 

When the ETF first launched it sank nearly 50% lower. However, the ETF price is now 60% higher than its initial public offering price. 

68% of retail investor accounts lose money when trading CFDs with this provider.

9. ProShares Ultra Nasdaq Cybersecurity Fund – 2x Leveraged Index ETF

The ProShares Ultra Nasdaq Cybersecurity Fund (UCYB) has unique properties. It is a leveraged index ETF. The aim of the fund is to provide returns that correspond to two times (2x) the daily performance of the Nasdaq CTA Cybersecurity Index. 

Known as ‘geared investing’ leveraged ETFs amplify both gains and losses so investing in this fund does provide high risk and volatility than others. The Nasdaq CTA Cybersecurity Index tracks the performance of 36 companies with the biggest holdings including Accenture, Cisco Systems, Okta and Pal Alto Networks. 

The ProShares Ultra Nasdaq Cybersecurity ETF only launched at the beginning of 2021. However, the fund is already up more than 30%. The expense ratio is higher than some of the other funds at 1.12%. 

68% of retail investor accounts lose money when trading CFDs with this provider.

10. Simplify Volt Cloud & Cybersecurity Disruption ETF – Cloud Computing & Cybersecurity Focused

The Simplify Volt Cloud & Cybersecurity Disruption ETF (VCLO) holds a narrow portfolio of companies that focus on global cloud computing and cybersecurity. The type of companies the fund invests in include streaming media, cloud storage, payment methodologies, big data, data management and cybersecurity. 

One difference with this fund is that they will use put and call options to leverage the future performance of the underlying stock. At the time of writing the fund is holding class A stock in Cloudflare, CrowdStrike Holdings Inc, Datadog and Palantir. There are also options positions on Zscaler, Snowflake and others. 

While the fund is relatively new its year to date performance is beyond 53%. The expense ratio is 0.95% owning to the fact this is a more actively traded fund due to the options positions it participates in. 

68% of retail investor accounts lose money when trading CFDs with this provider.

Are Cyber Security ETFs a Good Investment?

Before you start investing in a cyber security ETF, it is worthwhile knowing some of the pros and cons of doing so. This will help you to make an informed decision on whether a cyber security ETF is a good investment for your portfolio. 

Pros of Cyber Security ETFs

• They provide a passive way to invest in a booming sector. Instead of finding the individual stocks to invest in, you can gain access to the whole cyber security sector. 
• You can buy and sell a cyber security ETF just as easy as you can buy and sell stocks. As it’s a booming sector, liquidity is high if you stick to the well-known providers. 
• Most cyber security ETFs have a low expense ratio. Furthermore, you can buy these ETFs from brokers like eToro 100% commission-free. 

Cons of Cyber Security ETFs

• An individual stock may outperform the overall ETF. This is because an ETF is based on the performance of all of its holdings. So, if there are some poor performers it can drag down the overall result. 
• Some cyber security ETFs engage in riskier activities like options trading or providing 2x leveraged returns. This is great when it works out but you have to be prepared to manage the downside as well. 

Where to Buy Cyber Security ETFs

It’s clear that investing in a cyber security ETF can help a long term investment portfolio. But of course, there are other considerations too such as your broker’s fees for buying and selling. 

Below are two brokers that are worth considering buying cyber security ETFs with. 

1. eToro – Overall Best Cyber Security ETF Broker

From our research, eToro is the best overall broker to buy cyber security ETFs. One of the main reasons for this is the fact you can buy and sell 100% commission-free. This means more of the profits in your back pocket. 

eToro is also heavily regulated by the United Kingdom FCA, CySEC, ASIC and FINRA, providing a high level of safety and security of your funds. Furthermore, deposits are also commission-free and can be done by bank transfer, credit/debit cards or e-wallets such as PayPal. 

Where eToro really stands out is the fact it is the largest social trading and copy trading platform in the world. More than 20 million people use eToro. You can view the performance of these traders and if you like what you see, you can have their trades copied onto your own account. 

eToro also has its own in-house investment management team that has created CopyPortfolios. These are ready-made portfolios to invest in that work similar to ETFs. The Copy Portfolio will track a certain theme and at the click of a button, you can gain exposure to the individual investment within that portfolio. 

You can open an account with eToro in just a few minutes and only need a $200 minimum deposit to get started. With 100% commission-free investing and zero deposit fees, it’s a great place to get started. 

Pros:

Cons:

68% of retail investors lose money trading CFDs with this provider.

2. Libertex – Top-Rated Cyber Security ETF Broker using CFDs

Libertex is a broker with a 23-year history boasting more than 3 million clients all around the world. With Libertex you can speculate on a wide range of asset classes such as stocks, indices, commodities, currencies and cryptos using CFDs, or Contracts for Difference. 

With CFDs, you are merely speculating on price direction rather than owning the underlying shares. This means you can trade long and short and potentially profit from rising and falling markets using leverage which can amplify your winning and losing trades. 

You can open an account with Libertex in just a few minutes and only need 100 EUR to get started. Furthermore, you can deposit funds via bank transfer, debit/credit card and e-wallets such as Neteller and Skrill. 

Pros:

Cons:

74% of retail investors lose money trading CFDs with this provider.

How to Invest in a Cyber Security ETF

Here is a step by step guide on how to invest in a cyber security ETF using top-rated stock broker eToro. 

1. Create Your Account

You can open an account eToro in just a few minutes by filling out some personal details in order to start trading. 

2. Verify Your ID

eToro is heavily regulated by the UK FCA, ASIC, CySEC and FINRA so they need to comply with strict AML and KYC regulations and verify your identity. 

The two verification documents you will need are:

• A valid passport or driver’s licence
• A utility bill or bank account statement issued within the last three months

3. Deposit Funds

In order to start investing in cyber security ETFs, you need to deposit funds into your account. Deposits with eToro are fee-free.  

Deposit methods include:

• Debit/credit card
• Bank wire transfer
• PayPal
• Neteller
• Skrill

4. Start Investing!

You can search for a wide range of stocks and ETFs to invest in, from the search box at the top of the eToro Once you have found the correct stock, click the Trade icon to open the trading ticket. 

From the ticket, you can input your position size and add in a stop loss or take profit price level.  You can also leverage your position by trading a stock CFD in order to control a  larger position with a small deposit.  

In the trading ticket, you can click on x1 leverage which will show you your options. The maximum for a retail trader is x5. This means you can control a position five times bigger than your investment size. 

eToro – Buy Cyber Security ETFs 100% Commission Free

It’s quite clear that the boom in the cyber security sector is only at the beginning. This bodes well for investors who position themselves early on in the right cyber security ETFs. 

Having the right broker where you can buy cyber security ETFs but also cyber security stocks at low cost, can help investors to capitalise on this booming sector. 

With eToro you can trade thousands of instruments 100% commission-free while accessing CopyTrader and CopyPortfolio services. Open a free account and see all of the features and benefits for yourself. 

68% of retail investors lose money trading CFDs with this provider.

Frequently Asked Questions on Cyber Security ETFs

Read next