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Evolve Cyber Security Index ETF Now trading on the TSX. TSX TICKER: CYBR

www.evolveetfs.com


Disclaimer This presentation is not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended as a summary only and is qualified entirely by, and should be read in conjunction with, the more detailed information appearing in the prospectuses dated August 14, 2017, February 5, 2018, March 21, 2018, and July 30, 2018. Commissions, management fees and expenses all may be associated with exchange traded mutual funds (ETFs). Please read the prospectus before investing. ETFs are not guaranteed, their values change frequently and past performance may not be repeated. There are risks involved with investing in ETFs. Please read the prospectus for a complete description of risks relevant to the ETF. Investors may incur customary brokerage commissions in buying or selling ETF units. Certain statements contained in this presentation may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as "may", "will", "should", "expect", "anticipate", "believe", "intend" or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law. Bloomberg and Bloomberg.com are trademarks and service marks of Bloomberg Finance L.P., a Delaware limited partnership, or its subsidiaries. All rights reserved.

Invest Better. evolveetfs.com Evolve Funds Group Inc.

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Investing in Equality and Emerging ESG Themes

Electric Vehicles

Cyber Security

Gender Diversity

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Source: Statistics presented are based on the Breach Level index [breachlevelindex.com] 4


Mobile malware continues to surge

Older operating systems exacerbate the problem. In particular, on Android™, only 20% of devices are running the newest major version and only 2.3% are on the latest minor release.

Another threat to mobile users is grayware - apps that aren’t completely malicious but can be troublesome. Symantec found that 63% of grayware apps leak the device’s phone number. With grayware increasing by 20% in 2017, this isn’t a problem that’s going away.

Source: Symantec, 2018

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Source: Visual Capitalist


Business Impact of Endpoint Cybercrime:

… and the average cost of crime is

$1M each

Source: BBN TIMES

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The Need for Cyber Security Number of devices that will be connected by 20201

Expected cyber security spending in 20181

20 billion

$100 billion

$6 trillion

The amount predicted to cost the global economy by 20212

Risk facing enterprises today is arguably cybercrime5

#1 38%

Number of global organizations that claim they are prepared for a cyberattack4

1

Source: Gartner, 2017 Cybersecurity Ventures, 2016 4 Cybint, 2017 5 Cybersecurity Ventures, Gartner, 2017 2

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Increased Global Spending on Cyber Security1 IT Services Hardware

Global spending is projected to exceed $1 trillion over the next five years, from 2017 to 2021

Software

U.S. have declared cyberthreats a national emergency and will invest $19 billion on cyber security in 2017 (+35% over FY 2016)

Expected to add 500,000 cybersecurity jobs by 2019

Continue to invest over $1 billion annually

1 Cybersecurity

On the record stating it has an unlimited budget

Doubling annual 2017 budget to $500 million

Ventures and Cybersecurity Market Report 9


Cyber Security is Not a One-Time Fix

“Every company has at least one employee who will click on everything.� Brad Smith, Microsoft President and Chief Legal Officer

Statement made at conference in July 2017

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11


12


Just Another Day at the Office

350

3 billion

the number of clients affected, including: US governments and the United Nations

the number of user accounts impacted by 2013 breach (which was originally 1 billion)

March 2017 Disclosed September 25

Original breach 2013 Announced on October 3, 2017

THE BUSINESS AND FINANCIAL IMPACT OF A BREACH1 5% drop in average stock price the day a breach is announced

1

7% loss of customers

As The Impact of Data Breaches on Reputation & Share Value, Ponemon Institute

31% of consumers discontinue the relationship

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Data Breaches Are Costly to Shareholders

EFX US EQUITY: Equifax Inc.

Breach occurred on July 29, 2017 Disclosed on September 7, 2017 190

170

150

130

110 Mar

May

Sep

Jul

Nov

Jan

2017 Source: Bloomberg as at July 31, 2018

Mar

May

Jul

2018

143 million

the number of stolen user accounts, including: Social Security numbers, birth dates and addresses 14


The House Analogy Protecting data is similar to the steps used to protect your house. VIDEO CAMERAS LOCKS ON DOORS

Security incident and event monitoring (SIEM)

Firewalls, passwords, 2-factor authentication

MONITORED ALARM SYSTEM Antivirus, security monitoring

SAFE FOR VALUABLES

SECURITY GUARD

Network segmentation, encryption

Security consultants

GUARD DOG Intrusion detection system, network alarms

Source: Gazette

SIGNAGE

LOCKS ON DOORS

Group policies

Firewalls, passwords, 2-factor authentication 15


Cyber Security Market Predictions

DAMAGE COSTS

CYBER SECURITY

CYBER CRIME

from cyber crime hit $6 trillion annually by 2021

spending to exceed $1 trillion from 2017 to 2021

will more than triple the number of unfilled cyber security jobs (3.5 million by 2021)

Source: CyberSecurity Ventures

HUMAN ATTACK

GLOBAL

surface to reach four billion people by 2020

ransomware damage costs are predicted to exceed $5 billion in 2017 16


GLOBEANDMAIL.COM

This year’s top performing Canadian-listed equity ETF is a fund almost no one owns CLARE O’HARA PUBLISHED: JUNE 1, 2018 UPDATED: JUNE 2, 2018

Even though data breaches have been making frequent news headlines – including at two major Canadian banks this week – investors in Canada have been slow to embrace the fast-growing sector of cybersecurity. Returns suggest they may want to start paying attention: This year’s top-performing equity exchange-traded fund (ETF) on the Toronto Stock Exchange focuses on that sector. The Evolve Cyber Security Index ETF was launched last year under the symbol CYBR. With a management fee of 0.55 per cent, the fund invests primarily in equity securities of both domestic and global companies that are involved in the cybersecurity industry through hardware and software development. Despite an impressive year-to-date return of 21.72 per cent in the fund’s unhedged version (and 17.47 per cent in a hedged product), the ETF has only attracted $12-million in assets under management since launching last September. The fund has 34 stock holdings; many are U.S.-based cybersecurity firms, with top holdings that include F5 Networks Inc., Trend Micro Inc., Fortinet Inc., Akamai Technologies Inc. and Palo Alto Networks Inc. Bank of Montreal and Canadian Imperial Bank of Commerce this week reported data breaches where personal data were stolen from approximately 90,000 client accounts. While the news has sparked concern on how clients can protect their personal information and fuelled the discussion around the importance of cybersecurity among large corporations, there hasn’t been an uptick in interest for the Canadian ETF, according to Evolve’s CEO, Raj Lala. Mr. Lala says it doesn’t surprise him that he hasn’t seen an influx of assets since the recent bank hacks. “Many times people don’t connect problems or negative news to investment opportunities, but as awareness grows in the sector we will see increased flow,” he says.

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CYBR: Holdings1

1

As at July 31, 2018.

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Videos: Cyber Security

The Evolution of CDN and Cloud Services

The Application Networking Story

Company: Akamai Technologies Inc. Ticker: AKAM Portfolio Weight1: 7.57%

Company: F5 Networks Inc. Ticker: FFIV Portfolio Weight1: 7.62%

NEXTDC Data Centres are Powering the Age of Cloud Computing Company: NEXTDC Ltd Ticker: NXT Portfolio Weight1: 1.53% 1As

at July 31, 2018

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Who Should Consider CYBR?

Investors who are: Looking to diversify their tech portfolio

Interested in cyber security Seeking capital appreciation Seeking a hedge for companies vulnerable to cyber attack

Interested in Socially Responsible Investments (SRI) and Environment Social Governance (ESG) mandates Technology executives, and tech business owners

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Canada’s First Cyber Security ETF Evolve Cyber Security Index ETF INDICATIVE YIELD1

AVERAGE MARKET CAP

MINIMUM MARKET CAP

NUMBER OF HOLDINGS

CLASSES

0.37%

CAD 6 BILLION

CAD 100 MILLION

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HEDGED & UNHEDGED

MANAGEMENT FEE

MANAGEMENT EXPENSE RATIO (MER)2

INDEX REBALANCING (MARKET CAP WEIGHT)

RISK RATING

INDICATIVE SPREAD

0.40%

0.55%

QUARTERLY

MEDIUM TO HIGH

20bps

INDEX METHODOLOGY • •

FactSet RBICS: Carrier Edge Network Management Equipment, Customer Premises Network Security Equipment, Network Security Equipment, Data Center Services, Government IT Services, Network Security Software, Network Security Access Policy Software Minimum market cap of at least CAD 100 million and minimum average daily value traded of CAD $2 million over the preceding 3 months

GEOGRAPHIC ALLOCATION Name

INDUSTRY ALLOCATION

Weight

United States Israel Japan Netherlands Australia South Korea As at July 31, 2018 1 Gross of MER 2 Includes fixed administration fee of 0.15%. Plus applicable sales tax.

74% 11% 8% 4% 2% 1%

Name

Weight

Information Technology Telecommunication Services

98% 2%

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FIRST IN CANADA

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Evolve Automobile Innovation Index ETF

Evolve Cyber Security Index ETF

Evolve Innovation Index ETF

Quarterly Rebalancing Management Fee: 0.40%

Quarterly Rebalancing Management Fee: 0.40%

Evolve North American Gender Diversity Index ETF Annual Rebalancing (with Quarterly Reviews) Management Fee: 0.40%

Quarterly Rebalancing Management Fee: 0.40%

Sphere FTSE Canada Sustainable Yield Index ETF

Sphere FTSE Europe Sustainable Yield Index ETF

Semi-Annual Rebalancing

Semi-Annual Rebalancing

Sphere FTSE Emerging Markets Sustainable Yield Index ETF Semi-Annual Rebalancing

Management Fee: 0.45%

Management Fee: 0.50%

Management Fee: 0.54%


Our Innovative Suite of ETFs: Actively Managed

Evolve US Banks Enhanced Yield ETF

Evolve Global Healthcare Enhanced Yield ETF

Evolve Marijuana ETF

Evolve Blockchain ETF

Semi-Annual Rebalancing

Quarterly Rebalancing

Evolve Funds Group Inc.

Evolve Funds Group Inc.

Management Fee: 0.45%

Management Fee: 0.45%

Management Fee: 0.75%

Management Fee: 0.75%

Evolve Active Core Fixed Income ETF

Evolve Active Canadian Preferred Share ETF

Evolve Active US Core Equity ETF

Evolve Active Short Duration Bond ETF

Foyston, Gordon & Payne Inc.

Foyston, Gordon & Payne Inc.

Nuveen Asset Management, LLC

Nuveen Asset Management, LLC

Management Fee: 0.45%

Management Fee: 0.65%

Management Fee: 0.70%

Management Fee: 0.70%


MARKETING RESOURCES Quarterly Calls & Webinars Newsletters

Press & Media

Factsheets

Infographics, Videos & Podcasts

Monthly Commentaries 24


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Invest Better. evolveetfs.com

For Investors: Evolve Cyber Security Index ETF (CYBR)  
For Investors: Evolve Cyber Security Index ETF (CYBR)