For Investors: Evolve Cyber Security Index ETF (CYBR)

Evolve Cyber Security Index ETF 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 February 5, 2018, March 21, 2018, July 30, 2018, and August 10, 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. Forwardlooking 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.

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Published January 7, 2019.

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THEN

NOW

3

Source: Statistics presented are based on the Breach Level index [breachlevelindex.com]. Gemalto NV, 2018.

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

5

Source: Visual Capitalist, 2018

Business Impact of Endpoint Cybercrime:

… and the average cost of crime is

$1M each

Source: BBN TIMES, July 2018

7

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

8

The Growing Cyber Risk Gap Analysts estimate that cyber risk globally "could slow the pace of technological innovation by as much as US$3 trillion in lost economic value in 2020."

Cyber risk drivers: • • • •

Proliferation of personal data and economic value online Broader cyberattack surface More sophisticated cyber threats Increased consumer and regulatory pressures for security and privacy

Source: Kaplan, J. M., Bailey, T., Rezek, C., OHalloran, D., & Marcus, A. (2015). Beyond cybersecurity: Protecting your digital business. Hoboken, NJ: Wiley.

9

Cybersecurity Talent Growth Trends ▪

73% of Canadian executives expect the number of full-time cybersecurity staff to increase over the next three to five years.

▪ ▪

By 2021, the number of cybersecurity professionals in Canada will rise to approximately 28,000, representing a compound annual growth rate of about 7%.

Canadian organizations will need to fill some 8,000 cybersecurity roles between 2016 and 2021.

Organizational cybersecurity talent growth trends

Demand for cyber talent in Canada

▪

▪

Demand for cyber talent in Canada is increasing by 7 percent annually, with organizations needing to fill some 8,000 cybersecurity roles between 2016 and 2021.

Source: Deloitte analysis based on data from ICTC, Statistics Canada.

Canada's educational portrait, 2016 Census of Population, 2017. http://www.statcan.gc.ca/pub/11-627-m/11-627-m2017036-eng.htm

The world is "on pace to reach a cybersecurity workforce gap of $1.8 million by 2022, a 20% increase over the forecast made in 2015."

10

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 Expected 12-15 percent year-over-year cybersecurity market growth through 2021 Over 3.5 million cybersecurity job openings by 2021

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, 2018 11

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

12

Cyber Security is a High Priority for CEOs

Source: McKinsey

13

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)

Original breach 2013 Announced on October 3, 2017

March 2017 Disclosed September 25, 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

14

Data Breaches Are Costly to Shareholders Breach occurred on July 29, 2017 Disclosed on September 7, 2017

EFX US EQUITY: Equifax Inc.

150

140

130

-34.85% 120

110

100

90 Apr

Jun

Oct

Aug

Dec

Feb

Apr

2017

Source: Bloomberg as at December 31, 2018

Jun

Aug

Oct

Dec

2018

143 million

the number of stolen user accounts, including: Social Security numbers, birth dates and addresses 15

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 16

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 17

Videos: Cyber Security

The Evolution of CDN and Cloud Services

The Application Networking Story

Company: Akamai Technologies Inc. Ticker: AKAM Portfolio Weight1: 8.25%

Company: F5 Networks Inc. Ticker: FFIV Portfolio Weight1: 8.18%

NEXTDC Data Centres are Powering the Age of Cloud Computing Company: NEXTDC Ltd Ticker: NXT Portfolio Weight1: 1.36% 1As

at December 31, 2018

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CYBR: Holdings1

1

As at December 31, 2018.

19

CYBR Performance $14,800

Growth of $10,000

$14,800

CYBR: Evolve Cyber Security Index ETF (Hedged)

$13,800

$13,800

$12,800

$12,800

$11,337.22

$11,800

$10,800

$9,800 Sep-'17

Growth of $10,000 CYBR.B: Evolve Cyber Security Index ETF (Unhedged)

$12,682.04

$11,800

$10,800

Dec-'17

Mar-'18

Jun-'18

Sep-'18

$9,800 Sep-'17

Dec-'18

Dec-'17

Mar-'18

Jun-'18

Sep-'18

Dec-'18

Performance Total Returns* (%)

1 MTH

3 MTH

6 MTH

YTD

1 YR

SI**

CYBR

-8.49

-16.99

-7.47

9.04

9.04

13.37

CYBR.B

-5.56

-11.68

-3.39

19.40

19.40

26.82

Source: Bloomberg as at December 31, 2018. ** Performance since inception on September 20, 2017. * For the period ending December 31, 2018. The indicated rates of return are the historical annual compounded total returns including changes in per unit value and reinvestment of all dividends or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. The rates of return shown in the table are not intended to reflect future values of the ETF or returns on investment in the ETF. ETFs are not guaranteed, their values change frequently and past performance may not be repeated.

The Growth of $10,000 chart is based on the historical daily net asset value per unit (NAV) of the ETF, and represents the value of an initial investment into the ETF of $10,000 since its inception, on a total return basis. Distributions, if any, are treated as reinvested, and it does not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder. The NAV values do contemplate management fees and other fund expenses where paid by the fund. The chart is not a performance chart and is not indicative of future value which will vary.

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.

Investors should monitor their holdings, as frequently as daily, to ensure that they remain consistent with their investment strategies.

20

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

AVERAGE MARKET CAP

MINIMUM MARKET CAP

NUMBER OF HOLDINGS

CLASSES

0.26%

CAD 5 BILLION

CAD 100 MILLION

37

HEDGED & UNHEDGED

MANAGEMENT FEE2

MANAGEMENT EXPENSE RATIO (MER)2,3

INDEX REBALANCING (MARKET CAP WEIGHT)

RISK RATING

INDICATIVE SPREAD4

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

INDUSTRY ALLOCATION Name Communications Technology Consumer, Non-cyclical As at December 31, 2018 1 Gross of MER 2 Plus applicable sales tax 3 Includes fixed administration fee of 0.15% 4 Estimate only

GEOGRAPHIC ALLOCATION

Weight 49% 46% 5%

Name United States Israel Japan Netherlands Australia

Weight 78% 11% 7% 3% 1%

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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

22

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