Why Victoria's Secret's Breach Is A Wake-Up Call For Cybersecurity ETF Investors

When Victoria’s Secret VSCO reported a cybersecurity breach on Tuesday that caused it to take its website offline for three days in late May, the fashion industry hardly batted an eyelash.

But shareholders ought to take heed. The attack is just the latest in an increasingly high tide of corporate cyberattacks that are stripping revenues, reputations, and sometimes entire business models, away.

As cyber threats keep pace with AI adoption, investors are increasingly looking to cybersecurity ETFs.

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Cybersecurity ETFs To Consider

The worldwide cybersecurity industry is projected to grow to $562.72 billion by 2032, registering a CAGR of 14.3%, as per Fortune Business Insights. This broader secular trend has yielded compelling opportunities for investors through sector-specific ETFs. A brief summary of the major players follows:

• First Trust NASDAQ Cybersecurity ETF CIBR: With a one-day average volume of around 565,000 shares, this is the most liquid cybersecurity ETF. It has returned 39% over the past year, making it a strong contender for both active traders and long-term holders. The fund carries an expense ratio of 0.59%.

• Amplify Cybersecurity ETF HACK: Another top-performing ETF, up 41% in the past year. From Broadcom AVGO and Cisco CSCO to Palo Alto Networks PANW and Fortinet FTNT, HACK offers diversified exposure to cybersecurity firms globally. The ETF carries an expense ratio of 0.6%.

• iShares Cybersecurity & Tech ETF IHAK and Global X Cybersecurity ETF BUG: Good choices for those seeking diversified, low-cost exposure with a bias toward tech. The funds have expense ratios of 0.47% and 0.51%, respectively. The ETFs are up 18% and 29% in the past year, respectively.

As per a Statista report, for FY 2025, the US government has put forward close to $13 billion of budgetary spending on cybersecurity, an increase of 10% from last fiscal year. It’s a sign that cybersecurity is now viewed as core infrastructure.

Back To Victoria’s Secret

Although Victoria’s Secret denies the three-day website shutdown affected Q1 profits, the company highlights one of the most important risks that have become far too commonplace: digital-platform-based businesses are one hack away from customer pandemonium and market cap loss.

Retail is not singular. Marks & Spencer was recently hit by a ransomware attack that froze online orders for weeks. The company lost an estimated £300 million, cutting its profits by nearly a third. That is not merely a technology problem, it is a complete financial debacle.

And then there’s the health sector, with 440+ ransomware attacks in 2024, the highest in any of the key infrastructure sectors, according to CNN, deducing from IC3 report. In 2024, losses reported to IC3 totaled a staggering $16.6 billion, with ransomware as the most “pervasive threat to critical infrastructure, with complaints rising 9% from 2023.”

The irony? A lot of the risk is being fueled by the same technology companies are adopting to improve operations: AI. As companies use AI tools to automate processes and track customer behavior, they simultaneously create new threats.

That duality is fueling both fear and money, and ETF investors are surfing that trend.

Bottom Line: The cybersecurity theme has matured from a defensive hedge to a bona fide growth opportunity. Investors who want to future-proof their portfolios would do well to consider investing in ETFs that target this sector. Whether retail, healthcare, or geopolitics, cyberattacks aren’t disappearing. But with the proper investments, the prospect of returns could be just as enduring.

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