HACK Investing in

Cyber Security
The PureFunds ISE Cyber Security ETF

// CYBERCRIME NOW COSTS THE

GLOBAL ECONOMY AN ASTOUNDING

$400 BILLION EACH YEAR. 1

Why are malicious hackers increasingly able to gain

access to sensitive information stored by governments,
corporations, or individuals?

0
59.
ITS THE PERFECT STORM RESULTING
FROM AN ARRAY OF TRENDS:
E R S2
C YB ENT SOPHISTICATION
E D CID . 8
T
EC TY I N 4 2 Cyberattacks are becoming more
T sophisticated with new tactics,
D E U R I NS) technology, and strategies.
E C LIO Governments and terrorist
S MIL groups are also more involved.
(IN
8. 9
2 SENSITIVE SYSTEMS

24 . 9 The internet provides critical

infrastructure for defense,
energy, banking, and financial

2. 7 systems, creating inviting

2 targets for cybercriminals.

HYPERCONNECTIVITY
9.4 Access to the internet
grows each year:
5
201
4 200 million new people
201 connect each year
013
2 IoT is expected to reach
2
201 5.4 billion connected
devices by 2020
1
201
0 E-commerce continues to
201 grow by double digits
year-over-year

// IN RECENT YEARS, EVEN SOME

OF THE MOST PRESTIGIOUS
ORGANIZATIONS IN THE WORLD
WERE EXPLOITED:

The average losses from a cyberattack range from $475,000 to

nearly $9 million depending on how many records are stolen.3

HERE ARE SOME OF THE BIGGEST

HACKS AND ESTIMATED DAMAGES
OVER THE PAST FEW YEARS:

DECEMBER 2013

Data from more than 70 million shoppers stolen

including the credit card info of 40 million shoppers.

The attacks resulted in the resignation of its CEO and

Chairman, Gregg Steinhafel, as well as their CTO.

The attack cost Target $148 million and financial institutions

$200 million, as well as countless damage to their reputation
as a retailer.4

JULY 2014

The US's largest bank was compromised by hackers,

stealing names, addresses, phone numbers, and
emails of account holders.

Total records stolen: 76

million households
+ 7 million small businesses
JP Morgan has now announced that they are looking to
spend $250 million per year on digital security.4

SEPTEMBER 2014

Hackers infiltrated Home Depot's systems, putting

56 million customer accounts at risk.

The company is expected to pay $62 million to cover

the costs of the attack and $90 million in costs for
banks to replace 7.4 million credit cards.4

JUNE 2015

The United States Office of Personnel Management was hacked.

and had >20
million records on current/past
workers stolen.

"The extent of personal data stolen makes this attack an

order of magnitude greater than any we have seen of its kind
in the past," said California Democratic Rep. Adam Schiff, the
ranking Democrat on the House Intelligence Committee who
was briefed on the attack.

The US has since blamed China for the attacks. China denies
these allegations and has called them "irresponsible".5

Over the last 11 years, 96%

of cyberattacks have fallen
into nine distinct patterns:6

K S
A C Web App Attacks

O F
T T Insider Misuse

Y P E S
R A POS Intrusions

// T
B E Payment Card Skimmers

C Y Misc. Errors

Physical Theft/Loss

Denial of Service
0%
10
Cyber Espionage

14
0% 20
8 Crimeware
3
201

12
20
%
60 11
20
10
20
%
40 20
09

08
20

% 07
20 20
06
20
0.2

WEB APP ATTACKS

Hackers use stolen credentials
or exploit vulnerabilities in web
applications.

INSIDER MISUSE
Misuse of data by insiders (or
outsiders via collusion) to take
advantage of systems.

PAYMENT CARD SKIMMERS POS INTRUSIONS

Physical installment of "skimmer" Attackers compromise servers
on ATM, gas pump, or POS terminal running point-of-sale apps,
to steal credit card data. with intention of capturing
payment data.

DENIAL-OF-SERVICE
These are attacks (not breaches)
using powerful servers to
overwhelm an organization's
systems with malicious traffic.

MISC. ERRORS PHYSICAL

THEFT/LOSS
Any mistake that compromises
security, such as posting private The loss of laptops,
data or information accidentally. USB drives, and other
information assets.

CRIMEWARE
Any use of malware to
compromise servers or
desktops. Includes phishing.

CYBER-ESPIONAGE
State-affiliated actors
breach an organization
after intellectual property.

CYBERSECURITY SPENDING IS
EXPLODING
With multiple high-profile cyberattack incidents taking
place over the year, businesses and governments are
scrambling to broaden security measures.

THIS IS WHY PRESIDENT OBAMA HAS

$14
PROPOSED TO ALLOCATE: B
B IL
$14 billion to cybersecurity
UD
GE
L IO
spending in 2016 fiscal budget.
TE
D
N
THATS NEARLY A 15-FOLD
2016
INCREASE IN SPENDING SINCE 2000 7

$12
The private sector is in the same boat.
69% of US business executives see B IL
cyberattacks as a threat to their growth. L IO
That's why businesses are spending
more on cybersecurity than ever before.8
N 2010
$5
B IL
L IO
< $1 N
B IL
L IO
N 2005
ROUTERS
ANTI-VIRUS 2000
SECURE SOFTWARE
SERVERS

IP ROUTING

FIREWALLS

Th
e
inc cyb
l e
an udes r se
MALWARE
d s th cu DETECTION TOOLS
oft es rity
wa e h se
re ard cto
pro w r
du are
cts
:

BY 2020, RESEARCH
MARKET SIZE SHOWS THE MARKET IS
EXPECTED TO BE
$170.2 BILLION 9

$200

$170.2 Billion

$150

9.8% CAGR
$106.3 Billion (COMPOUND ANNUAL
GROWTH RATE)

$100

2015 2020

THE SECTORS AT
NT
HIGHEST RISK VERN
M E
E
S E &E
FENSPAC
D RO
FROM CYBERATTACKS GO
AE
Protecting Intellectual property,
infrastructure, financial markets,
health records, and other
important data will only become
more important as our world
becomes more interconnected.10

TAIL CE
RE A N
FIN
U RE
ICAL UCT
R IT STR
C RA
INF

A LTH
HE

A L
N TI
T E LOSS OF TRUST

P O S T SIZATIO N S AND REPUTATION

O
CO OR G AN
T FINANCIAL
COSTS BREACH OF
INFO OR IP

Cyberterrorism and cyber espionage is

already happening as well, and measures
must be taken to protect against such acts.

INVESTORS CAN POTENTIALLY PROFIT

FROM THIS HIGH-GROWTH SECTOR BY
IDENTIFYING COMPANIES AND FUNDS
THAT MAY GROW FROM THIS SURGE IN
ACTIVITY AND SPENDING.

HOW CAN YOU INVEST IN CYBER SECURITY?

THE PUREFUNDS ISE CYBER SECURITY ETF
(exchange traded fund)
HACK
INDUSTRY COVERAGE
The worlds first Cyber Security
ETF gives access to 30+ companies
in the industry

DIVERSIFICATION
Your investment includes various
sub-industries of Cyber Security-
from hardware and software
to consulting

GLOBAL EXPOSURE
Invest in a portfolio
of potentially leading
Cyber Security companies CY
across the globe
S E B ER
CU
R IT
Y
REDUCE RISK HA
HACK seeks to reduce CK
individual company risk by
investing in multiple Cyber
Security companies

LOWER COSTS
ETFs may offer lower costs
than their mutual fund peers

Investments in ETFs are subject to additional risks that do not apply to conventional mutual funds, including risks that the
market price of the shares may trade at a discount to its net asset value (NAV), an active secondary trading market may not
develop or be maintained, or trading may be halted by the exchange in which they trade, which may impact a Funds ability to
sell its shares.

Diversification does not assure a profit, nor does it protect against a loss in a declining market.

Presented by:

NYSE Arca: HACK

The PureFunds ISE Cyber Security ETFTM

(HACK) is a portfolio of companies providing
cyber security solutions that include hardware,
software and services.

To find out more visit

www.purefunds.com

Sources:
1: http://www.mcafee.com/ca/resources/reports/rp-economic-impact-cybercrime2.pdf
2: http://www.pwc.com/gx/en/consulting-services/information-security-survey/
3: http://www.reuters.com/article/2015/04/14/usa-cybersecurity-idUSL2N0XB01K20150414
4: http://www.newsweek.com/2014-year-cyber-attacks-295876
5: http://www.businessinsider.com/china-hacked-7-of-america-2015-7
6: http://news.verizonenterprise.com/2015/04/2015-data-breach-report-info/
7: https://www.whitehouse.gov/omb/overview
8: http://www.pwc.com/cybersecurity
9: http://www.marketsandmarkets.com/PressReleases/cyber-security.asp
10: http://img.delivery.net/cm50content/hp/hosted-files/2015_US_CCC_FINAL_4.pdf

Go to http://purefunds.com/media/pdfs/H_Prospectus.pdf
for the prospectus.
Investing involves risk, including the possible loss of principal.
Shares of any ETF are bought and sold at market price (not
NAV), may trade at a discount or premium to NAV and are not
individually redeemed from the Fund. Brokerage commissions
will reduce returns. Narrowly focused investments typically
exhibit higher volatility. The fund is concentrated in technolo-
gy-related companies face intense competition, both domesti-
cally and internationally, which may have an adverse effect on
profit margins. Such companies may have limited product lines,
markets, financial resources or personnel. The products of such
companies may face obsolescence due to rapid technological
developments, frequent new product introduction, unpredict-
able changes in growth rates, competition for the services of
qualified personnel, and competition from foreign competitors
with lower production costs. Technology companies are heavily
dependent on patent and intellectual property rights.
The loss or impairment of these rights may adversely affect the
profitability of these companies. Investments in foreign securities
involve political, economic and currency risks, greater volatility
and differences in accounting methods. The Funds are non-diver-
sified, meaning they may concentrate its assets in fewer individu-
al holdings than a diversified fund. Investments in smaller compa-
nies tend to have limited liquidity and greater price volatility
than large-capitalization companies.
The Fund's return may not match or achieve a high degree of
correlation with the return of the ISE Cyber Security Index. To the
extent the Fund utilizes a sampling approach, it may experience
tracking error to a greater extent than if the Fund had sought to
replicate the ISE Cyber Security Index.
Fund holdings and allocations are subject to change at any time.
Go to (http://pureetfs.com/etfs/hack.html) for fund holdings.
The funds are distributed by ETFMG Financial LLC.

HACK invests in publicly traded companies involved in the cyber

security infrastructure or service industries. The Fund seeks to
provide investment results that, before fees and expenses, corre-
spond generally to the price and yield performance of the ISE
Expires 3/31/2018 Cyber Security Index.