These 3 ETFs Are the Future of Cybersecurity
In 2026, cybersecurity has transformed from a defensive corner of the technology sector into one of the market's strongest investment themes. Artificial intelligence is giving attackers new tools, and companies are responding with record budgets to protect data, identities, and AI systems themselves. Investors who don't want to bet on individual stocks can use thematic ETFs. At first glance they look similar, but in reality they differ in their methodologies, valuations, and what exactly investors are buying with their money. We analyzed the sector's three largest funds, focusing on their strengths and the risks that lurk beneath the surface.
Key points
Global spending on cybersecurity will exceed 247 billion dollars this year, and artificial intelligence is becoming the main driver of further growth.
After gains of tens of percent, a sharp sell-off at the turn of October and November revealed the sector's true risk profile.
The oldest cybersecurity ETF on the market also holds defense contractors, making it an interesting hybrid of technology and defense.
One ETF buys only companies that generate at least half their revenue from security. Investors pay a higher valuation for this purity.
The sector's largest fund manages over 16 billion dollars, but more than half of its portfolio is invested in just ten holdings.
According to Gartner's September forecast, global spending on information security will reach 247.5 billion dollars this year, an increase of 13.6 % year over year. It is expected to rise to 276.1 billion dollars in 2027 and as high as 372.8 billion by 2030. Security software is growing faster than services, and its share of total spending will rise to around 56 % by the end of the decade. Which ETF can capitalize on this most effectively?
Artificial intelligence is the main driver, and it is doing so from two directions. According to CrowdStrike's $CRWD annual threat report, attackers using AI increased their activity by 89 % in 2025. An IBM study says that roughly one in four data breaches is already related to artificial intelligence, and 85 % of organizations plan to increase security budgets because of the capabilities of the latest models. At the same time, an entirely new market is emerging. Companies must protect AI agents themselves, which have access to corporate data and systems. Gartner estimates that spending on AI security platforms will rise from around 3 billion dollars in 2026 to 7.7 billion dollars in 2028.
Stocks have reacted exceptionally strongly to this trend. Sector leaders doubled in value over the course of this year, and cybersecurity ETFs are among the year's best-performing thematic funds. That's precisely why it's important to know exactly what each fund holds and what price investors are paying for growth. If you're just getting started with ETFs, you can find the basic principles in the Bulios Academy.