CIBR vs HACK

Key Takeaways

• Both ETFs provide targeted exposure to the cybersecurity theme through passive indexing strategies, but CIBR offers broader diversification with roughly twice as many holdings as HACK.
• CIBR tracks the Nasdaq CTA Cybersecurity Index and maintains a net expense ratio of 0.58%, while HACK follows the Nasdaq ISE Cyber Security Select Index at 0.60%.
• Top holdings overlap significantly in pure-play cybersecurity names such as Palo Alto Networks (PANW), CrowdStrike Holdings (CRWD), and Fortinet (FTNT), yet HACK incorporates a higher allocation to defense contractors including Northrop Grumman (NOC) and General Dynamics (GD).
• CIBR exhibits a more balanced sector profile with meaningful exposure across software, hardware, and select industrials, whereas HACK tends toward greater concentration in a smaller basket of names.
• Structural differences in index construction and rebalancing frequency influence relative positioning, with both funds rebalanced quarterly and focused exclusively on companies where cybersecurity activities represent a core business driver.
• In the current market environment, investors compare the two for cost efficiency, liquidity, and the degree of pure-play versus diversified cybersecurity exposure within the broader technology and industrials sectors.

Introduction

Cybersecurity remains a durable secular growth theme driven by rising digitalization, regulatory requirements, and persistent threat landscapes. The First Trust NASDAQ Cybersecurity ETF (CIBR) and Amplify Cybersecurity ETF (HACK) both deliver pure-play exposure to companies whose primary business involves cybersecurity solutions. While they compete directly within the same thematic niche, structural distinctions in index methodology, number of holdings, and sector weighting create meaningful differences in risk and return profiles that warrant comparison for investors seeking targeted sector exposure.

First Trust NASDAQ Cybersecurity ETF (CIBR) Overview

The First Trust NASDAQ Cybersecurity ETF (CIBR) seeks to track the performance of the Nasdaq CTA Cybersecurity Index. The fund employs a passive strategy and holds approximately 44 securities, with a net expense ratio of 0.58%. It maintains at least 90% exposure to index constituents classified as cybersecurity companies by the Consumer Technology Association. Top holdings typically include Palo Alto Networks (PANW), CrowdStrike Holdings (CRWD), Fortinet (FTNT), Cisco Systems (CSCO), and Broadcom (AVGO). Sector allocations emphasize technology services and electronic technology, with smaller weights in industrials such as aerospace and defense. The index applies a modified liquidity-weighted methodology with concentration caps and undergoes quarterly rebalancing. CIBR is structured as an open-end fund listed on NASDAQ.

Amplify Cybersecurity ETF (HACK) Overview

The Amplify Cybersecurity ETF (HACK) seeks investment results that correspond to the Nasdaq ISE Cyber Security Select Index. Launched in 2014 as the first dedicated cybersecurity ETF, it follows a passive approach with approximately 23 holdings and a net expense ratio of 0.60%. The index focuses on companies where cybersecurity represents a key business driver, split between infrastructure providers and service providers. Prominent holdings often feature Palo Alto Networks (PANW), CrowdStrike Holdings (CRWD), Broadcom (AVGO), Cisco Systems (CSCO), and defense names such as Northrop Grumman (NOC) and General Dynamics (GD). Sector exposure centers on technology with a notable industrials component. The index is reconstituted and rebalanced quarterly using market-capitalization weighting subject to caps. HACK trades on NYSE Arca as an open-end fund.

Industry and Thematic Backdrop

The cybersecurity sector benefits from sustained demand fueled by expanding attack surfaces, enterprise digital transformation, and evolving compliance mandates across industries. Macroeconomic factors including interest-rate expectations and corporate capital-spending cycles influence technology budgets, while geopolitical tensions can accelerate defense-related cybersecurity spending. Both ETFs operate within a non-diversified structure, exposing investors to concentrated thematic risks such as rapid technological change, competitive intensity, and regulatory developments in data privacy and export controls. Capital flows into cybersecurity-themed products have remained resilient through recent market cycles, reflecting the sector’s defensive growth characteristics amid broader equity volatility.

Performance and Positioning Comparison

Over recent market cycles, both ETFs have exhibited elevated volatility relative to broad equity benchmarks, driven by earnings sensitivity among top holdings and shifts in growth-stock sentiment. CIBR’s larger number of holdings generally supports modestly lower idiosyncratic risk and smoother relative performance during sector rotations. HACK’s more concentrated profile can amplify returns when defense and large-cap cybersecurity names lead, yet it may experience sharper drawdowns during periods of software-sector weakness. Relative positioning reflects differences in defense exposure and index weighting schemes, with performance divergences often tied to the earnings trajectories of shared holdings and broader macroeconomic drivers such as corporate IT spending and interest-rate paths.

AI Screener

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Tickeron AI Verdict

Based on observable structural factors, Tickeron’s AI would currently assign a modest probabilistic preference to CIBR. The ETF’s slightly lower expense ratio, broader diversification across a larger number of holdings, and balanced sector profile provide a more resilient framework for capturing cybersecurity sector momentum while mitigating single-name concentration risk. HACK remains competitive for investors prioritizing defense-sector overlap and a more concentrated pure-play approach. Final allocation decisions should reflect individual risk tolerance and portfolio objectives.

Disclaimer

The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.

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