To The Moon

🌟🌟🌟As the global cyber threat landscape becomes increasingly complex, Cybersecurity is not merely an expenditure but a strategic investment essential for digital transformation and organisational resilience.

$iShares Cybersecurity and Tech ETF(IHAK)$ is my tactical bet on this sector as I gain exposure to the best Cybersecurity companies around the world.  IHAK seeks to track the investment results of an index composed of developed and emerging market companies involved in cyber security and technology, including cyber security hardware, software products and services.

In just 1 trade, I gain access to major Cybersecurity firms such as SentinelOne, Fortinet, Palo Alto, Crowd Strike and many more.

$CrowdStrike Holdings, Inc.(CRWD)$ hit the headlines last month when it caused a global outage due to a software upgrade.   Since then it has slowly recovered and is up 10% in the past 5 days but it is still down from its 52 week high of USD 398.30.  Fortunately for IHAK, CrowdStrike only constitutes 2.8% weightage in the ETF.

$SentinelOne, Inc(S)$ provides an advanced enterprise cyber security AI platform that unites endpoint, cloud, identity protection with a XDR integration library for a seamless and efficient cybersecurity experience.

$Fortinet(FTNT)$ is a global leader of Cybersecurity solutions and services.  Fortinet develops and sells security solutions like firewalls, endpoint security and intrusion detection systems.  It has offices located all over the world.

$Palo Alto Networks(PANW)$ has become the gold standard of cybersecurity with its Strata Network Security Platform that proactively monitors, analyses and prevents sophisticated threats in real time. Palo Alto employs AI machine learning technology to detect threats in cybersecurity. Palo Alto has an economic moat in its unified control plane across hardware and software as well as broad coverage of the network, security operations centre, apps and cloud.

The Top 10 holdings weightage of IHAK is 44%.  Total number of holdings is 35.  Expense ratio is 0.47% which is one of the lowest in comparison to other similar Cybersecurity ETFs.  IHAK pays dividends every 6 months.  The current dividend yield is 0.10%.

Performance wise IHAK is up 4% in the past 5 days and 8.9% year todate.  In 2023, IHAK has jumped 27.6%.  However if we look back 5 years ago, IHAK has skyrocketed 94%.

Wall Street Analysts are bullish on IHAK with a Buy rating, an average Target price of USD 52.65, an upside potential of 9% according to 35 analysts surveyed by Tipranks.

Morningstar has awarded IHAK a Gold medal, its highest level of conviction.

What I like about IHAK is its global coverage.  US Cybersecurity companies take up 81%, followed by Asia Pacific at 10% and Europe at 8%.

IHAK's holdings are capped at 4% of the ETF weight so that the no single holding can unduly influence the outcome of the ETF performance. 

Cybersecurity is ranked as the 4th most critical global risk over a 2 year period from the findings of the World Economic Forum's 2024 Global Risk Report.

The Global Cybersecurity market size was valued at USD 172.24 billion in 2023.  This market is projected to grow from USD 193.73 billion in 2024 to USD 562.72 billion by 2032, with a CAGR of 14.3% during the forecast period.

I have invested in IHAK since 2023, and I am happy with its performance since it is up 20% currently.   I believe that IHAK still has lots more room to grow exponentially in the long term as Cybersecurity is gaining increasing importance due to global cybersecurity threats and the nascent growth of AI. 

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