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Confidential – may not be distributed without the consent of BetaShares capital
The current climate for cybersecurity around the world and the risk for the Australian economy
The investment opportunity in the cybersecurity industry.
HACK – the investment strategy and key benefits explained
Confidential – may not be distributed without the consent of BetaShares Capital 3
The current climate for cybersecurity around the world and the risk for the Australian economy
The investment opportunity in the cybersecurity industry.
HACK – the investment strategy and key benefits explained
Confidential – may not be distributed without the consent of BetaShares Capital 4
DISCRETE | NICHE | TAILOREDDISCRETE | NICHE | TAILORED
Richard Byfield Founder & Managing Director Founding DirectorDatacom TSS CREST Australia New Zealand
BetaShares Global Cybersecurity ETF (ASX: HACK)
Launch
+
A Cybersecurity Overview
DISCRETE | NICHE | TAILORED
© 2016 Datacom TSS Slide 6
“The opinions expressed in this presentation and on the following slides are solely those of the presenter and not necessarily those of any Government
agency where I have worked.”
Disclaimer
DISCRETE | NICHE | TAILORED
© 2016 Datacom TSS Slide 7
DISCRETE | NICHE | TAILORED
About Me
Reveal their secrets
Protect our own
DISCRETE | NICHE | TAILORED
© 2016 Datacom TSS Slide 8
35+smart and talented
individuals
5+ years in operation
A Datacom Group Company
Delivering security to ..
GovernmentHealthTech sectorTransportationDefence
Banking and FinanceRetailTelecommunicationsAcademia
About TSS
DISCRETE | NICHE | TAILORED
© 2016 Datacom TSS Slide 9
DISCRETE | NICHE | TAILORED
The character of digital disruption is
changing … [to] a pervasive, always-on
digital ecosystem fueled by the
explosion of data from the dramatic rise
in sensors, and made ubiquitous by
mobility. The world, and our digital
representation of it, are merging and this
self-interpreting world will be massively
disruptive.Source: Boston Consulting Group
Digital Context
50 Billion devices will be connected to the internet by
2020 CISCO
3.45 BillionInternet users
DISCRETE | NICHE | TAILORED
© 2016 Datacom TSS Slide 10
DISCRETE | NICHE | TAILORED
new pieces of malware
created – over one
million a day
denial of Service
attacks year over
year in Q1 2016
on average a new zero
day is discovered
every week
of all targeted attacks
struck small and
medium sized
organizations
large companies
targeted by attackers
5 6out of
60%
54zerodays
430million
increase in detected
cyber security incidents
38%
111%
The Current State of Play
Source: Price Waterhouse Coopers
DISCRETE | NICHE | TAILORED
© 2016 Datacom TSS Slide 11
422,340tweets
205.6 millionemails sent
3.3 millionposts
60In Seconds
videohours
400
new
55,555instagram
photos
Source: www.smartinsights.com
Social Media
Population Comparison
DISCRETE | NICHE | TAILORED
© 2016 Datacom TSS Slide 12
E-commerce
Forrester says the number of consumers browsing and buying online will hit 270 million by 2020, driven largely by activity on mobile devices.
Frost & Sullivan projects that B2B e-commerce will hit $12 trillion in sales worldwide by 2020
DISCRETE | NICHE | TAILORED
© 2016 Datacom TSS Slide 13
The Bad Guys
0 20 40 60 80
General Hackers
Insider
Nation State
Criminal
Threat Actors
In 2015, the British insurance company Lloyd’s estimated that cyber attacks cost businesses as
much as $400 billion a year, which includes direct damage plus post-attack disruption to the normal course of business.
???From 2013 to 2015 the
cyber crime costs quadrupled, and it looks
like there will be another quadrupling from 2015 to 2019
DISCRETE | NICHE | TAILORED
© 2016 Datacom TSS Slide 14
Threat = capability + resources + motivation + intent
Threat Landscape
DISCRETE | NICHE | TAILORED
© 2016 Datacom TSS Slide 15
The Good Guys
PRIORITY 1
PROTECT AUSTRALIA
PRIORITY 2
ENABLE DIGITISATION
PRIORITY 3
NURTURE INNOVATION
DISCRETE | NICHE | TAILORED
© 2016 Datacom TSS Slide 16
Cyber threats will persist, increase and continue to
evolve
Summary
More legislation
Increased cyber security spend
DISCRETE | NICHE | TAILORED
© 2016 Datacom TSS Slide 17
Illustration: KAL’s cartoons: The Economist (Print Edition) 9 May 2009
Thank You
The current climate for cybersecurity around the world and the risk for the Australian economy
The investment opportunity in the cybersecurity industry.
HACK – the investment strategy and key benefits explained
Confidential – may not be distributed without the consent of BetaShares Capital 18
Confidential – may not be distributed without the consent of BetaShares Capital 19
• “Allianz sees cyber premiums as fire insurance of 21st century”
• “Google notifies users of 4,000 state-sponsored cyber attacks per month: executive”
• “Obama says U.S. government must improve cyber security”
• “Singapore PM says “sophisticated” cyber attacks prompt internet shutdown on government computers”
• “U.S. warns banks on cyber threat after Bangladesh heist”
• “Austria’s FACCC, hit by cyber fraud, fires CEO”
Confidential – may not be distributed without the consent of BetaShares Capital 20
Source: FireEye Report, August 2016
21
A global leader in many security
solutions:
• Contactless payments
• Data transport
• Personal ID
World’s leading
cybersecurity accreditation
and extensive range of
enterprise level
cybersecurity solutions
More than 500,000 customers
worldwide, including the
entire Fortune 500.
Established in 2004,
now has over 4000
customers in 67
countries
Source: Information sourced from company websites
Confidential – may not be distributed without the consent of BetaShares Capital
Confidential – may not be distributed without the consent of BetaShares Capital 22
Case study: Barracuda
• A provider of cloud enabled security and data protection solutions.
• Barracuda Networks, Inc. is headquartered in Campbell, California.
• It’s first Quarter Fiscal 2017 results were strong – exceeding guidance with revenue
growing 11% year on year to $86.7million compared with $78million in first quarter of
fiscal 2016.
• It will announce its next results on October 11 2016.
• Share price has doubled:
• In January Barracuda share price was at $11, as of September 15 it sits at
$23 – doubling through the course of the year to date.
Source: Barracuda.com September 2016
Confidential – may not be distributed without the consent of BetaShares Capital 23
Source: NASDAQ, Bloomberg. Past performance is not indicative of future performance.
Nasdaq CTA Cybersecurity Index, 3-year Annualised % Growth in Revenue: June 2013 – June 2016
In the 3 years to end
June 2016, annualised
revenue growth has
been around 60% p.a,
almost double of
companies in the S&P
500 IT Technology
sector.
Confidential – may not be distributed without the consent of BetaShares Capital 24
Source: NASDAQ, Bloomberg. The Index which HACK aims to track is the Nasdaq CTA Cybersecurity Index. You cannot invest directly in an index. Performance
excludes the impact of ETF fees and expenses Past performance is not an indication of future performance of the Index or the ETF.
Nasdaq CTA Cybersecurity Index, Total Return Performance in AUD: 16-September 2010 - 26-August 2016
The Index which HACK
aims to track has
enjoyed solid
annualised growth of
11.6% p.a. since
inception in September
2010 to August 2016.
The current climate for cybersecurity around the world and the risk for the Australian economy
The investment opportunity in the cybersecurity industry.
HACK – the investment strategy and key benefits explained
Confidential – may not be distributed without the consent of BetaShares Capital 25
Confidential – may not be distributed without the consent of BetaShares Capital 26
Product Name: BetaShares Global Cybersecurity ETF
Investment Objective Aims to track the performance of an index (before fees and expenses) which is designed to track the performance of
companies engaged in the Cybersecurity segment of the technology and industrial sectors.
Confidential – may not be distributed without the consent of BetaShares Capital 27
ASX: HACK
Key Information
ASX Code HACK
Bloomberg
CodeHACK AU
IRESS Code HACK.AXW
Asset backing Equities
Management
Fee0.57% p.a.
Expense
recoveries
Estimated at
0.10% p.a.
Inception
Date30 August 2016
Top 10 Index Constituents
As at 31 August 2016
Sector Allocation (%)
As at 31 August 2016
Country Allocation (%)
As at 31 August 2016
UNITED STATES 75.7
NETHERLANDS 8.6
ISRAEL 6.5
BRITAIN 3.3
IRELAND 3.0
JAPAN 2.9
Systems Software 42.2
Communications Equipment 21.9
Application Software 9.1
IT Consulting & Other Services 6.8
Semiconductors 5.4
Internet Software & Services 3.3
Aerospace & Defense 3.3
Specialized Consumer Services 3.0
Research and Consulting Servic 3.0
Company Weighting
Symantec Corp 7.9%
Cisco Systems 6.2%
Palo Alto Networks 6.2%
Juniper Networks 5.7%
NXP Semiconductors 5.4%
Proofpoint 3.8%
Imperva 3.5%
VMWare Inc 3.5%
CyberArk Software Ltd 3.4%
F5 Networks Inc 3.2%
1. Cybersecurity is part of the ‘megatrend’ towards online living
• PC’s and smartphones are already part of our daily lives
• Smart cars and smart houses are just around the corner
2. The more online we go, the more critical it becomes to protect our online presence
• The cybersecurity market is projected to grow by 10-15% per annum to US$250bn by 2021 (Source: CyberSecurity Ventures)
• The driver for this growth may be non-correlated to broader economic growth
3. Diversification & Access
• There are few cybersecurity exposures on the ASX
• Access - simple and cost-effective way to access a diversified portfolio of the world’s leading cybersecurity companies
• Invest in global giants and emerging leaders - strategy invests in both existing marquee names as well as emerging players in the cybersecurity industry
• Cost effective - Fund tracks the performance of an index (no ‘active manager’ fees)
• No W-8 BEN forms and no US estate tax implications for investors
Confidential – may not be distributed without the consent of BetaShares Capital 28
• Market risk: Investment returns will be influenced by the fluctuations of the share market as a whole.
• Cybersecurity companies risk – rapidly changing technologies, competition, new products, smaller companies.
• Concentration risk – cybersecurity sector, higher volatility.
• Currency risk – Fund is not hedged.
• Investors should seek professional financial advice before investing
• Past performance is not an indication of future performance
Confidential – may not be distributed without the consent of BetaShares Capital 29
Keep in touch
Confidential – may not be distributed without the consent of BetaShares capital
