Inside the IHAK ETF: Cybersecurity for the Win | ETF Trends

The heavier reliance on the internet amidst the pandemic fed into more strength for cybersecurity. Investors can continue to pad their portfolios with a cybersecurity play through the iShares Cybersecurity and Tech ETF (IHAK).

“The evolution of the work from home economy, the boom on online commerce, the focus on election security and the looming threat of continued data integrity hacks have made the cybersecurity sector a top focus for several years among individuals, companies and investors,” writes David Dierking in The Street.

IHAK provides investors access to companies around the world that are helping fight the rise in cyber crime by using cybersecurity solutions across hardware and software.

The fund gives investors:

  1. Access to companies at the forefront of cybersecurity innovation
  2. Exposure to global stocks along the full value chain of cybersecurity and tech industries
  3. Long-term growth with companies shaping the global economic future

The fund has risen almost 50% in the past year:

IHAK Chart

The Cybersecurity Sector Is Making a Comeback

Given the way the cybersecurity space has garnered momentum in the past year, it’s easy to forget the space was languishing not too long ago. Enter Covid-19 and things have changed as the world relies on the internet more heavily.

“Global cybersecurity stocks went through an initial boom/bust cycle about 6 years ago, but since then, save for pullbacks in late 2018 and early 2020, it’s been almost a straight line up,” Dierking wrote. “Cybersecurity has become a priority for both businesses and consumers. Millions of dollars is being invested into developing infrastructure and the demand for cybersecurity protections has never been higher.”

“The cybersecurity sector was up over 40% in 2020 and I believe there’s still further upside to be had in 2021,” Dierking added further. “The sector is certainly expensive at current levels, but a recovering global economy, extremely loose monetary conditions and strong services demand should bode well.”

IHAK’s expense ratio comes in at 0.46% and its largest holding, as of January 8, is Crowdstrike Holdings Inc. The stock itself has risen an astounding 300% within the past year:

CRWD Chart

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