CYBERSECURITY COPYPORTFOLIO - AN ETORO INVESTMENT STRATEGY
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CyberSecurity CopyPortfolio™ An eToro Investment Strategy
3 Introduction to
Cybersecurity 4 Cybercrime:
The Statistics 6 Cybersecurity:
Major Events
7 10 11
Content
Current Cyber Cybersecurity Future Cybercrime
Threat Trends Regulation Trends
14 Investment
Opportunity 15 Cybersecurity
CopyPortfolio Assets 20 CopyPortfolio
Summary
2Introduction
to Cybersecurity
Cybercrime is one of the biggest
challenges that mankind will face
over the next decade
3“Cybercrime is the greatest threat to every profession, every
industry, every company in the world” IBM CEO Ginni Rometty
In an increasingly digital world, cybercrime has become one of the most With the average cost of a cyberattack rising to $1.7M USD, businesses can no
dominant threats to society today. A serious problem for governments, longer afford to ignore the problem.
businesses, and individuals alike, cybercrime is creating unprecedented
economic damage across the world and costs are rising at an exponential rate. Spending on cybersecurity solutions has risen sharply in recent
According to industry experts, the total annual global cost of cybercrime could years, yet with the threat continually escalating, the growth story
reach $6T USD by 2021, representing the greatest transfer of economic wealth for the cybersecurity industry could be just beginning. This positions
in history. the cybersecurity industry well for strong future growth.
The scale and severity of malicious activity across the internet has To enable investors to participate in this exciting growth story, eToro has
advanced significantly in recent years. launched its Cybersecurity CopyPortfolio – a fully allocated thematic
investment portfolio that is focused on the world’s leading cybersecurity
Today’s cybercriminals are both sophisticated and relentless, and they often companies. Designed to provide long-term investors with diversified exposure
run highly organised enterprises that operate with destructive efficiency. to some of the most innovative and dynamic cybersecurity companies in the
The numbers speak for themselves – a data breach suffered by Marriott world.
International in 2018 is estimated to have compromised the personal details
of up to 500 million customers, while an attack on Yahoo in 2013 hit all three Add CyberSecurity to your Watchlist
billion user accounts.
Your capital is at risk
4Cybercrime
the statistics
$6T USD $1.7M USD 50% 17M
The expected annual global The average cost of a The percentage of The number of UK
cost of cybercrime by 2021, cyber attack today total UK crime that consumers that were victims
up from US$3 trillion in 2015 is cyber-crime of cyber-crime in 2017
60% 11 seconds 67% $1.7B USD
The percentage of How often a business is likely The percentage of SMBs across the The amount of
online fraud that is to fall victim to a ransomware US and the UK that have experienced cryptocurrency stolen
mobile-based attack by 2021 a cyberattack in the last 12 months in 2018
5Cybersecurity:
Major events
September 2017 November 2017 September 2018 November 2018 January 2019
Consumer credit reporting Transport group Uber Social media company Hotel group Marriott Security researcher Troy
company Equifax reports reveals that a 2016 Facebook reveals that up International reveals an epic Hunt reveals a discovery
a major cybersecurity cyberattack has potentially to 90 million user accounts data breach affecting up to of a dataset comprising
incident affecting 143 compromised the details have been compromised in 500 million customers 1.2 billion unique
million customers in the US of 57 million customers a security breach combinations of email
and drivers addresses and passwords
2017 9 10 11 2018 4 9 10 11 12 2019 01
April 2018 October 2018 December 2018
October 2017 150 million users of the Airline Cathay Pacific Social website Quora
Yahoo announces that all of its MyFitnessPal app owned suffers a major data suffers a data breach that
3 billion email users were likely by Under Armour have breach impacting over 9 may have exposed the data
compromised in a 2013 breach their details leaked million customers of up to 100 million users
?
!
6Current Cyber
threat trends
Cybercriminals use a variety of complex
techniques to achieve their objectives and the
threats are always evolving.
7Phishing Major events phishing
Phishing – a strategy in which targets are contacted by cybercriminals who Another form of phishing that we are seeing more of today is phishing
are posing as trusted entities – is not a new technique and has been around campaigns that are linked to major events such as elections, concerts
for over 25 years now. However, it is still one of the most serious cyber or sporting events. For example, it was recently revealed that hackers were
threats to both individuals and corporations today, and in recent years, planning to target the US and Japanese public by emailing fake offers of
Advanced phishing techniques
phishing strategies have become significantly more advanced, which means tickets to the 2020 Tokyo Olympic Games in an attempt to steal private
they are harder to identify. information.
With cybercriminals clearly becoming more resourceful with their
phishing strategies, individuals and organisations need to be aware
Spear phishing of the threat.
One modern technique that is becoming increasingly prevalent is known as
spear phishing. This is more potent than generalised phishing strategies
– in which emails are often sent out to thousands of email addresses –
as it specifically targets individuals or groups within an organisation. The
statistics related to spear fishing are alarming, with over 30% of spear
phishing campaigns deemed to be successful. Spear phishing attacks also
cost victims, on average, around 20 times the amount of a generalised
phishing attack.
8Malware Cryptojacking
Malware – harmful software that is designed to cause damage to a computer, Another form of malware that has become increasingly prevalent is that
server, or network – is also not a new threat. In fact, computer viruses, the of cryptocurrency-mining malware. According to a recent report from
oldest form of malware, have been around since the early 1970s. However, McAfee, cryptocurrency-mining malware increased 4,000% in 2018 and
malware attacks have become increasingly more sophisticated in recent replaced ransomware as the most common form of malware. This type
Advanced phishing techniques
years. Hostile and intrusive, malware now has the potential to steal, encrypt, of malware enables cybercriminals to use victims’ computers to mine
or delete data, disrupt core functions, and even spy on victims without their cryptocurrencies such as Bitcoin in a process known as ‘cryptojacking.’
knowledge.
Ransomware Spyware
One type of malware that we are seeing a lot more of today is ransomware. A third type of malware that is common today is spyware. This is a form
This is a form of malware that is designed to infect the target’s system. of malware that is designed to secretly gather information about a victim’s
This is popular among the cybercriminal community due to the fact that it computer and their online activity, and send this information to a third party.
demands a quick payment from victims.
9Regulation As a result of the vast number of high-profile cyberattacks and subsequent data
breaches in recent years, cybersecurity regulation is now high on the agenda
for governments.
One of the most important developments so far has been the introduction of
the European Union’s (EU) General Data Protection Regulation (GDPR) in 2018.
GDPR is focused on data collection and transparency, and establishes data
protection rules for any company that collects data from an EU citizen – whether
or not that organisation is based in the EU.
One of the most notable aspects of GDPR is that it gives companies just 72 hours
to notify authorities of a breach, which means that companies can no longer
keep data breaches secret. GDPR has strict penalties for non-compliance, with
fines of up to €20 million or 4% of annual global revenue, which ultimately
places the responsibility on businesses to put robust processes in place in order
to ensure that their data is protected.
With the scale and scope of cyberattacks continuing to intensify, it’s likely that we
will see more cybersecurity regulations introduced in the near future.
10Future
Cybercrime Trends
Cybercrime continues to evolve at a
rapid pace and the cyber threats of the
future are likely to be more advanced
than the threats of today.
11Internet of Things (IoT) cybercrime Cyberattacks on critical infrastructure
While the Internet of Things (the network of physical devices that are Another form of cyberattack that we could see more of in the future is
embedded with electronics and can transmit data with each other) presents attacks on national infrastructure. While high-profile infrastructure attacks
Future cybercrime trends
many exciting real-world possibilities such as self-driving cars, wearable have been relatively scarce up until now, cybersecurity experts are warning
devices, and smart healthcare devices, the technology also introduces many about the possibility of severe attacks in the years ahead.
risks from a cybercrime perspective.
The UK experienced this kind of attack first hand back in 2017, when the
Many IoT devices are poorly secured, and this is providing cybercriminals global ‘WannaCry’ ransomware outbreak impacted large segments of the
with a plethora of new attack points. According to research from Symantec National Health Service’s (NHS) infrastructure, causing severe disruption to
(a company included in the CyberSecurity CopyPortfolio), the average IoT hospitals and patients across the UK. However, these kinds of attacks could
device was attacked every two minutes in 2017. become more prevalent, and in early 2018, the head of the UK’s National
Cyber Security Centre (NCSC) warned that he expects the UK to suffer a
“major, crippling cyberattack” against its national critical infrastructure within
the next two years.
12Cryptocurrency-related cybercrime Mobile attacks
Infamous US bank robber Willie Sutton once said that he robbed banks Another cybercrime trend that is gaining momentum is attacks on mobile
because “that’s where the money is” and with that in mind, it’s perhaps no devices. Given that mobile phones tend to contain valuable information, as
Future cybercrime trends
surprise that we have seen a large increase in cryptocurrency theft in recent well as access to mobile banking platforms, they are an attractive target for
years, as cryptocurrencies have risen in value and cryptocurrency investing cybercriminals.
has become more mainstream. According to a recent report from US based
cybersecurity firm CipherTrace, cryptocurrency theft totalled approximately In the first half of 2018, global attacks on mobile devices rose 24%, according
$1.7 billion USD in 2018 , a 400% increase on the year before. Of that total, to analysts at ThreatMetrix . Furthermore, of the 81 million attacks to hit the
around 56% was stolen from cryptocurrency exchanges and infrastructure financial industry in the first half of 2018, 27 million were aimed at mobile
services such as digital wallets. devices.
With the crypto industry remaining lightly regulated, and many
cryptocurrency investors failing to establish appropriate measures of cyber
protection, cryptocurrency-related cybercrime is likely to accelerate in the
years ahead as criminals target vulnerable crypto investors.
13Cybersecurity: a compelling
Investment
Opportunity
Spending on cybersecurity has increased
in recent years, yet this could be just the
beginning of a long-term growth story.
14A growing sector eToro's CyberSecurity CopyPortfolio
Analysing the cybercrime landscape, it’s very clear that there is a real opportunity For this reason, to help clients gain exposure to this fast-growing industry, eToro
for cybersecurity companies going forward. According to research from has developed its CyberSecurity CopyPortfolio – a fully allocated thematic
CyberSecurity Ventures, the cybersecurity industry is set to grow at a compound investment portfolio that is focused specifically on cybersecurity stocks. Using
annual growth rate (CAGR) of between 12% and 15% between 2017 and 2021, this Portfolio, investors can passively invest in the cybersecurity industry by
which is around four times the growth of the IT sector in general. gaining exposure to a diversified portfolio of leading cybersecurity stocks,
including top names such as Check Point Software Technologies, Palo Alto
Networks, Symantec Corporation, Akamai Technologies and more.
A compelling opportunity Designed to provide long-term capital growth while minimising stock-specific
risk, this investment strategy offers an innovative way to profit from the growth
of the world’s leading cybersecurity firms.
With net spending potentially set to reach $1 trillion USD for the five-year period
to 2021, driven by the increase in sophisticated attacks and tighter regulation,
the growth outlook for companies in the cybersecurity industry looks extremely
attractive. This industry growth should provide plenty of opportunities for
investors. With over 1,600 companies active in the cybersecurity space, and Add CyberSecurity to your Watchlist
each entity specialising in specific areas of protection, picking the right stocks
can be a challenging process. Your capital is at risk
15CyberSecurity
CopyPortfolio
Initial Asset
Allocation
16(NASDAQ: CYBR) (NYSE: PANW) (NYSE: BB) (NYSE: RTN)
CyberArk Software is a provider of Palo Alto Networks is one of the largest BlackBerry Previously known for its Raytheon is a diversified US company
cybersecurity solutions that has a specific cybersecurity companies in the world, handheld devices, BlackBerry has that specialises in defence, civil
focus on protecting privileged accounts Palo Alto Networks is a multinational evolved in recent years and reinvented government, and cybersecurity solutions.
– user accounts that have more privileges cybersecurity firm that describes itself itself as a leading provider of cybersecurity Although the group is mainly known for
than ordinary users and provide access as a ‘next-generation security company.’ solutions for businesses. its expertise in the military hardware
industry, it has emerged as a major
CyberSecurity CopyPortfolio Assets
to operating systems, network devices The group’s mission is to “protect our The company’s transition into a
and applications. way of life in the digital age by preventing player in the cybersecurity space in
cybersecurity specialist began several
successful cyber attacks.” recent years, led by its subsidiary
Protecting these types of accounts is years ago when through various strategic
Forcepoint – the world’s second largest
absolutely critical. CyberArk is the only Palo Alto offers sophisticated firewalls M&A's. In 2018, the group announced
private cybersecurity firm.
publicly-traded company that is focused and cloud-based solutions. the acquisition of Cylance, that specialises
on eliminating cyber threats that target in applying artificial intelligence, Integrating its defence industry
The group has a broad global reach,
insider privileges. algorithmic science, and machine knowledge and capabilities, Raytheon
serving 57,000 companies in over
learning to cybersecurity software. Cyber offers clients a number of specialist
CyberArk operates in 90 countries 150 countries worldwide, and it has
managed services including cybersecurity
worldwide, and the group boasts an an excellent reputation for providing In the face of an increasingly complex
assessments, digital forensics and
impressive client list, counting over 50% highly effective cybersecurity solutions, cybersecurity threat landscape,
incident response services.
of the Fortune 500 as clients. With as indicated by the fact that it counts BlackBerry looks well placed to prosper
awareness and demand for privileged 85% of the Fortune 100 as clients. after the launch of its Professional In 2018 the group was ranked number
access security growing strongly, the Registering three-year sales growth of Cybersecurity Services consulting four on Cybersecurity Ventures’
company looks well positioned for future over 140% between 2015 and 2018, this business. Cybersecurity 500 list – which ranks the
growth. is a cybersecurity powerhouse that is ‘hottest and most innovative’
generating powerful growth. cybersecurity companies in the world.
17(LSE: SOPH) (NYSE: LMT) (NASDAQ: SYMC) (NASDAQ: FEYE)
Sophos Group is an innovative UK- Lockheed Martin Corporation is a Symantec Corporation is a leading FireEye is a leader in intelligence-based
based cybersecurity specialist that has global security and aerospace company cybersecurity company that helps cybersecurity solutions. Offering an
been developing antivirus and encryption headquartered in Bethesda, Maryland. governments, organisations and advanced platform that blends innovative
products for over 30 years. Today, its Employing over 100,000 people individuals secure their most important security technologies, nation-state grade
portfolio of products helps secure the worldwide, it is one of the largest defence data. Across the world, over 50 million threat intelligence, and world-renowned
consulting services, the group helps
CyberSecurity CopyPortfolio Assets
networks of over 100 million people and contractors in the world. people rely on the group’s products such
327,000 businesses across 150 countries as Norton to help secure their personal enterprises and governments prepare
Lockheed Martin has moved to expand
worldwide. information, devices and home networks, for, prevent, respond to and remediate
its cybersecurity presence in recent
while 350,000 organisations look to cyber-attacks.
Sophos focuses on developing reliable years and in 2015, the group invested
Symantec for robust, integrated solutions
cybersecurity solutions that are easy to around $10M USD in cybersecurity firm FireEye has an excellent reputation
that can provide defence against
install, configure, update and maintain. Cybereason – an innovative cybersecurity within the cybersecurity industry and
sophisticated cyber attacks.
As a subscription software business, the company which leverages the power of counts more than 45% of the Forbes
group enjoys a sustainable financial big data, machine learning, and Symantec has made a number of key Global 2000 as clients. It was also the
growth model. behavioural analytics to eliminate cyber acquisitions in recent years, including first cybersecurity firm to be certified
threats in real time. those of cybersecurity firm Blue Coat by the US Department of Homeland
With the company making a number of
and identify theft prevention company Security. Revenue at FireEye has surged
cybersecurity-focused acquisitions in With the capability to deliver full-
LifeLock. The company looks well placed significantly in recent years as a major
recent years, including that of artificial spectrum cyber capabilities and cyber
to deliver strong returns in the coming player in cloud security.
intelligence-based cloud infrastructure resilient systems it appears well placed
years.
security group Avid Secure in early 2019, to help governments and military groups.
Sophos looks well placed for growth.
18(NYSE: BAH) (NASDAQ: CHKP) (NYSE: IBM) (NASDAQ: AKAM)
Booz Allen Hamilton is a US Check Point Software Technologies IBM is a global technology company that Akamai Technologies is a leading
management and information is a leading provider of cybersecurity has continually evolved over the years to provider of content delivery network
technology that focuses primarily in solutions to corporate enterprises and remain at the forefront of technological services and cloud security solutions.
cybersecurity. One of the world’s largest governments across the world. The innovation. Today, the group offers a With a strong commitment to security,
cybersecurity providers, its solutions largest ‘pure-play’ cybersecurity vendor comprehensive suite of security services. the company is trusted by some of
CyberSecurity CopyPortfolio Assets
help customers improve resiliency globally, the group provides innovative the world’s most security-conscious
IBM has made a number of key
and reduce the downtime caused by solutions that protect customers from companies.
acquisitions in the cybersecurity space
cyberattacks. all forms of cyber attacks.
in recent years including those of Akamai is continually innovating to stay
The company boasts an enviable client Offering a multi-level security architecture cybersecurity specialist Trusteer, access ahead of the latest cyber threats so it can
base that includes nearly every federal and a comprehensive and intuitive management vendor Crossideas, and protect its customers from cyber threats
and defence agency, as well as a large single point of control management access management and identity firm such as malware attacks, phishing
proportion of the Fortune 100. Whether system, the group has won a large Lighthouse Security Group. These attacks, DDoS attacks, and other
helping to identify vulnerabilities for number of market-leadership awards acquisitions, along with the group’s sophisticated attacks and this innovation
customers, or developing advanced for its expertise. Securing over 100,000 legacy expertise should enable the has resulted in impressive growth
algorithms to detect and stop attacks businesses and millions of users company to keep delivering growth in its in recent years. With cybercriminals
before they spread, the company worldwide against dangerous cyber cybersecurity division in the years ahead. increasingly targeting cloud computing
focuses on supporting its clients’ most threats, this is a cybersecurity stock that’s services, Akamai appears well positioned
important cybersecurity requirements. hard to ignore. for future growth.
19(NYSE: JNPR) (NASDAQ: CSCO) (NASDAQ: VRSN) (LSE: ULE)
Juniper Networks is an innovative Cisco Systems is a diversified technology Verisign is a leading provider of domain Ultra Electronics Holdings is a UK-based
technology group that provides company that has significant presence in name registry services and internet company that specialises in developing
high-performance networking and the cybersecurity space. Due to the scale security. Through its Registry Services highly-differentiated solutions across the
cybersecurity solutions to service of Cisco’s business, the revenues of its segment, the group ensures the security, Defence & Aerospace, Security & Cyber,
providers, enterprise companies, and cybersecurity division now exceeds that stability and resiliency of key internet Transport and Energy markets.
CyberSecurity CopyPortfolio Assets
public sector organisations. A global of many pure-play cybersecurity firms. infrastructure and services – including
Over the last two decades, Ultra
player, the group has 92 offices in 43 the .com and .net domains – helping the
The group recently boosted its Electronics has significantly expanded
countries worldwide. world to stay connected online securely.
cybersecurity firepower by making a its geographic footprint and it now has
Juniper’s cybersecurity products include number of selective acquisitions, such An internet monopoly, Verisign is operations in the Middle East and the
next-generation firewalls, advanced as that of Duo Security in 2018 for uniquely positioned in the internet space Asia Pacific, as well as its core markets –
threat protection applications, and US$2.4 billion, cybersecurity could be a as it has contracts with regulatory bodies the US and the UK. Its client list – which
analytics platforms. After making a big growth driver for the company in the that provide a strong economic moat. includes the US Department of Defense
number of key acquisitions within the years ahead. This gives the company a substantial and the UK Ministry of Defence – is highly
cybersecurity space in recent years competitive advantage and enables it to impressive.
Juniper Networks looks well positioned generate high levels of profitability and
for future growth. substantial cash flow.
20Summary
The cybersecurity sector presents a compelling investment Analysing industry growth projections, the outlook for the
opportunity for investors. cybersecurity industry, as a whole, looks extremely attractive.
Cybercrime is becoming both more prevalent and more A diversified strategy, that focuses on a number of industry
sophisticated, and the costs associated with an attack are rising leaders, is an ideal approach to investing in the sector.
at an exponential rate. As a result, governments, businesses,
For those looking to gain exposure to this exciting growth story,
and individuals all across the world are making cybersecurity a
eToro’s CyberSecurity CopyPortfolio offers an innovative
top priority and this is driving industry growth.
and cost-effective way to invest in a portfolio of the world’s top
Spending on cybersecurity has increased in recent years, yet cybersecurity companies.
this could be just the beginning of a long-term growth story.
Add CyberSecurity to your Watchlist
Your capital is at risk.
21Resources:
https://cybersecurityventures.com/cybercrime-
damages-6-trillion-by-2021/
https://www.techradar.com/uk/news/cybersecurity-the-
latest-news-and-statistics
https://www.comparitech.com/vpn/cybersecurity-cyber-
crime-statistics-facts-trends/
https://uk.norton.com/cyber-security-insights-2017
https://www.comparitech.com/vpn/cybersecurity-cyber-
For more information regarding CopyPortfolios, crime-statistics-facts-trends/
https://cybersecurityventures.com/cybercrime-
contact: copyportfolios@etoro.com damages-6-trillion-by-2021/
https://www.techradar.com/uk/news/cybersecurity-the-
latest-news-and-statistics
https://www.newsmax.com/finance/markets/
cryptocurrency-thefts-scams-1-7-billion/2019/01/29/
id/900294/
https://www.forbes.com/sites/
donnafuscaldo/2018/12/28/crypto-mining-malware-
grew-4000-this-year/#19ba6d81224c
https://us.norton.com/internetsecurity-iot-smart-home-
eToro (EUROPE) LIMITED security-core.html
A company registered in the Republic of Cyprus. Registered number: ΗΕ 200585 https://www.newsmax.com/finance/markets/
Corporate Address: KIBC 7th Floor,4 Profiti Ilias Street, Germasoyia, Limassol 4046 cryptocurrency-thefts-scams-1-7-billion/2019/01/29/
id/900294/
https://www.threatmetrix.com/press-releases/mobile-
eToro (UK) LIMITED fraud-reaches-150-million-global-attacks-in-first-half-of-
A company registered in England and Wales. Registered number: 07973792 2018-with-attack-rates-rising-24-year-over-year-reveals-
threatmetrix/
Corporate Address: 42nd floor, One Canada Square, Canary Wharf London E14 5AB
https://cybersecurityventures.com/hackerpocalypse-
cybercrime-report-2016/
www.etoro.com https://www.cbinsights.com/
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