Cybersecurity Portfolio, Series 10
"Cybersecurity" is security that is applied to computing devices such as computers and smartphones, as
well as to networks and the Internet. Cybersecurity is used to protect computers, information and
services from unauthorized users. The Cybersecurity Portfolio contains a diversified portfolio of
companies that have been identified for their growing involvement in the cybersecurity industry.
With the heightened need for cybersecurity solutions, we believe this could be a favorable time to
invest in companies involved in such areas as anti-virus solutions, data back-up and recovery,
cloud-based systems, data encryption, data loss, enterprise security and homeland security.
Consider These Factors
- Global cybersecurity spending is anticipated to exceed $1 trillion cumulatively • from 2017-2021. In
2004, the global cybersecurity market was worth $3.5 billion and is forecast to reach approximately
$120 billion in 2017.1
- Approximately 4 billion people are anticipated to be online – and need cyber protection – by 2020, up
from over 2 billion in 2016. By 2030 the human attack surface, defined as the totality of all exploitable
security holes within an organization that are created through the activities and vulnerabilities of
personnel, could possibly equal the world's population which is anticipated to reach 8.5 billion.2
- Data breaches increased 40% in 2016 and hit an all-time record of 1,093, according to a report released
by the Identity Theft Resource Center and CyberScout. In 2017 through November 7th, total breaches
reached 1,152 with 171,653,785 records exposed.
- In fiscal year 2017, the White House is proposing $62 million in funding to expand cybersecurity
education across the country.3 In May 2017, President Trump issued a presidential executive order on
strengthening the cybersecurity of federal networks and critical infrastructure.
2 Business Wire
| Not FDIC Insured Not Bank Guaranteed May Lose Value
You should consider the portfolio's investment objectives, risks, and
charges and expenses carefully before investing. Contact your financial advisor
or call First Trust Portfolios, L.P. at 1.800.621.1675 to request a prospectus,
which contains this and other information about the portfolio. Read it carefully
before you invest.
An investment in this unmanaged unit investment trust should be made with an understanding of the risks involved with owning common stocks, such
as an economic recession and the possible deterioration of either the financial condition of the issuers of the equity securities or the general condition of
the stock market.
You should be aware that the portfolio is concentrated in stocks in the information technology sector which involves additional risks, including limited
diversification. The companies engaged in the technology sector are subject to fierce competition, high research and development costs, and their products
and services may be subject to rapid obsolescence. Technology company stocks, especially those which are Internet-related, may experience extreme price
and volume fluctuations that are often unrelated to their operating performance. There is no assurance that the projections stated herein will be realized.
Cybersecurity companies are subject to the risks set forth in "Information Technology" above. In addition to their cybersecurity business, certain of these
companies may be involved in other businesses unrelated to cybersecurity. Negative performance by a company's other business operations may have a
negative effect on a company's stock performance, even in situations in which they are deriving positive results from their cybersecurity business.
An investment in a portfolio containing small-cap and mid-cap companies is subject to additional risks, as the share prices of small-cap companies and
certain mid-cap companies are often more volatile than those of larger companies due to several factors, including limited trading volumes, products,
financial resources, management inexperience and less publicly available information.
An investment in a portfolio containing equity securities of foreign issuers is subject to additional risks, including currency fluctuations, political risks,
withholding, the lack of adequate financial information, and exchange control restrictions impacting foreign issuers.
This UIT is a buy and hold strategy and investors should consider their ability to hold the trust until maturity. There may be tax consequences unless units
are purchased in an IRA or other qualified plan.
The value of the securities held by the trust may be subject to steep declines or increased volatility due to changes in performance or perception of the issuers.