Often investors associate ASX ETFs with broad, index tracking funds.
While these ASX ETFs make a great foundation for a portfolio, there are also more focused funds that track specific themes and sectors.
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Are thematic funds a good investment?
Like any investment, these kinds of funds come with pros and cons.
Investing in niche, thematic ASX ETFs can give investors targeted exposure to emerging industries, trends, and themes with strong long-term growth potential.
These ETFs also provide diversification across several companies within a theme, making them less risky than investing in a single company.
However, their narrow focus can also create significant risks, as the ETF's performance may depend heavily on one industry or trend, making it more volatile and vulnerable to changes in technology, regulation, competition or investor sentiment.
One thematic ASX ETF that has stood the test of time and brought consistent long-term returns is BetaShares Global Cybersecurity ETF (ASX: HACK).
A decade of delivery
The S&P/ASX 200 Index (ASX: XJO) has compounded at approximately 9% per annum over the last 10 years, dividends included.
Generating 9% returns each year is nothing to complain about.
However, HACK ETF has outpaced the ASX 200 Index.
HACK ETF aims to track an index that provides exposure to leading companies in the global cybersecurity sector.
A new report from Betashares has highlighted its strong track record.
Since its inception, HACK ETF has returned 18.9% p.a. as at 31 August 2026 and generated more than $800 million in value to shareholders.
This has far outperformed the ASX 200 in the same span.
Why the growth can continue
According to Betashares, more than 100 major tech companies, including Alphabet, Microsoft, Anthropic, and OpenAI, issued an urgent joint letter last month calling for collective action to strengthen existing cyber defences in the age of AI.
While cybersecurity offerings have existed for decades, this wake-up call starkly reminds us that the current security status quo is no longer sufficient. Longstanding bugs, excessive permissions and weak authentication in legacy systems have left the attack surface wider and more exposed than ever.
This growing issue is also resulting in financial investment.
Firms have been increasing cybersecurity and IT spending as the complexity of protecting proprietary information grows. It also remains one of the more defensive areas in enterprise tech budgets, and Chief Information Officers are unlikely to cut spending during periods of economic weakness.
While no thematic ETF is guaranteed to repeat its past performance, HACK ETF's decade-long track record and the growing need for cybersecurity highlight how a niche investment theme can evolve into a durable, long-term opportunity.
