iShares Cybersecurity and Tech ETF

IHAK

Market cap $920M

iShares Cybersecurity and Tech ETF maintains a "Buy" rating, supported by international diversification and solid price action amid a premium valuation. IHAK offers exposure to global cybersecurity innovation, with a portfolio focused on growth and SMID-cap stocks, and about 25% non-U.S. allocation. Recent bullish guidance from CrowdStrike and positive September performance encourage optimism, despite IHAK lagging the ACWI ETF this year.

The cybersecurity sector offers strong long-term growth, driven by cloud adoption and increasing cyber threats. IHAK provides diversified exposure but underperforms compared to CIBR, which tracks a more focused and higher-performing index. Despite IHAK's lower fees, its returns lag significantly behind CIBR, making it less attractive for investors seeking sector growth.

Tech sector under pressure as trade tensions, AI disruption and demand swings shake confidence.

Tech stocks have struggled, but the iShares Cybersecurity and Tech ETF has shown resilience, outperforming XLK and SPY since mid-2024. IHAK offers exposure to innovative cybersecurity companies, with a moderate P/E multiple and significant relative strength, making it a compelling buy. The ETF is concentrated in tech, with the top 10 positions accounting for 44% of the fund, and benefits from ex-US exposure.

Cybercrime costs are rising, expected to reach $10.5 trillion annually by 2025, making cybersecurity a crucial investment sector. iShares Cybersecurity and Tech ETF offers a diversified portfolio of top-performing cybersecurity stocks, reducing idiosyncratic risk while capturing sector growth. Despite market volatility, the long-term outlook for cybersecurity remains strong, driven by increasing cyber threats and the need for robust defense mechanisms.

With the increasing adoption of AI in everyday activities, the risk of cyber-attacks also surges, increasing the need to raise investments in cybersecurity. Look at ETFs to capitalize.

Cybersecurity's increasing importance and AI advancements make the iShares Cybersecurity and Tech ETF (IHAK) a compelling investment for exposure to this growing tech segment. IHAK targets the NYSE FactSet Global Cyber Security Index, featuring 34 companies focused on cybersecurity innovation, ensuring a well-balanced portfolio. The fund's global reach and strong U.S. focus offer diversified opportunities, but its concentration in tech stocks poses sector-specific risks.

An ETF is a mutual-fund-like security that trades like a stock. A bunch of these ETFs sport huge average annual gains.

Cybersecurity issues are only getting worse, creating opportunities for some of the best cybersecurity stocks. Unfortunately, many of us, including businesses and governments around the world, still aren't prepared.

This ETF Edition highlights 12 less covered exchange-traded fund ideas on Seeking Alpha from June 1st - July 15th. ETFs in our first edition include Saba Closed-End Funds, iShares 20+ Year Treasury Bond BuyWrite Strategy, Global X Russell 2000 Covered Call, Invesco S&P 500 GARP, and more. Managed futures are in focus with one ETF idea where the author writes they "offer potential for maximizing income, boosting returns, and reducing volatility in a portfolio".