Governments, companies and individuals alike should focus on cyber security

Governments, companies and individuals alike should focus on cyber security

26 July 2021 from Ophelia InvestReading time: 4 minutes

Is cyber security, or IT security as it is called in Danish on your agendas? Governments, companies and individuals should all have some focus on IT security.

We focus on megatrends in collaboration with Vontobel, an investment manager with Swiss roots. We have chosen Vontobel as a sponsor for this theme because they offer trackers that follow three of the biggest megatrends: cyber security, artificial intelligence and hydrogen. The article contains affiliate links but is written objectively and with the aim of driving you smarter about cybersecurity.

What is cyber security

We live an ever-increasing part of our lives digitally, both at work and in our personal lives. Therefore, it is important that security is in place when we use our phone, computer or tablet. When we talk about cyber security (or IT security in Danish), we are talking about protecting networks, websites, and generally all data on the web against unwanted access. This can be to make sure our personal photos or messages don't end up in the wrong hands, or to make sure hackers don't get access to big companies' trade secrets.

But that's just the tip of the iceberg. Today, almost everything is controlled digitally, which means that almost everything is also vulnerable to hacker attacks. Be it shops, banks, newspapers, manufacturing plants or critical infrastructure.

Current example of attack in the US

A good example of how many things hackers can take control of today through cyber attacks is the attack on Colonial Pipeline, which operates the largest pipeline system in the US. On Friday 7 May 2021, the company was hit by a cyber attack that caused it to temporarily shut down all pipelines. Colonial Pipeline is responsible for transporting gasoline, diesel and jet fuel, and accounts for half of the US East Coast's energy consumption. When a company like Colonial Pipeline is hit by such attacks, it could have serious consequences, potentially leading to an energy shortage. The US news station CNBC has written an open article about this.

Cyber security; a step deeper

When hackers carry out cyber attacks it is usually to gain access to sensitive information or control over systems. The purpose of hacker attacks can vary widely, but there are basically three types:

  •     Cybercrime: Individuals or groups attack systems for financial gain.
  •     Cyber-attack: Politically motivated, and typically aimed at gathering or disseminating information
  •     Cyberterrorism: Aims to destroy digital systems, in order to disable it and create panic

All types of attacks typically involve high costs for the victim, and implementing effective IT security measures is therefore extremely important.

Why is cyber security a mega trend?

The number of cyber attacks is increasing rapidly, and so is the need for cyber security. Banks and pharmaceutical companies in particular have been subject to many attacks in recent years. According to the International Data Corporation, by 2022 $134 billion will be spent on cyber security. This figure will only increase in the coming years, so it can be good business to offer cyber security solutions. The next section gives you an overview of the options you have for investing in cyber security.

Get exposed to cyber security

If you are interested in gaining exposure to cyber security through a certificate, Vontobel offers the following certificate:

 Tracker Certificate Open-End on Solactive Cyber Security Performance-Index (ISIN: DE000VP9JQK2)

You can see the development of the index the tracker certificate follows here:

Note: past performance is not a reliable indicator of future results.

The certificate currently tracks 14 stocks (as of May 10, 2021) selected by Solactive, and is based on the "Cyber Security Performance Index". Below you can see the 12 stocks included in the index.

Certificates from Vontobel

The certificate is "open ended", which means that there is no expiry date. In addition, it is worth noting that, unlike many others, the certificate is not leveraged. The management fee of the certificate is 1.2% per annum. In addition, you pay a spread when buying the product.

You can view the certificate here, including documentation consisting of final terms and base prospectus and read more about it here. For an overview you can find the key investor document here.

As an investor in a certificate you should note that you bear, amongst others, the credit risk of the issuer (the risk that the issuer of the certificate or the guarantor are not able to fulfill the obligations under the product). The product is not capital-protected.

Certificates targeting other mega trends?

In addition to the tracker certificate that follows developments in cyber security index, Vontobel, offers two more tracker certificates in the mega trend field: Artificial intelligence and Hydrogen.

You can read more about investing in cyber security in our article on the topic here. Likewise, you can read more about Artificial Intelligence in our article here.

Important Notice

This information is neither an investment advice nor an investment or investment strategy recommendation, but advertisement. The complete information on the securities, in particular the structure and risks associated with an investment, are described in the base prospectus, together with any supplements, as well as the final terms.

It is recommended that potential investors read these documents before making any investment decision. The documents and the key information document are published on the website of the issuer, Vontobel Financial Products GmbH, Bockenheimer Landstrasse 24, 60323 Frankfurt am Main, Germany, on and are available from the issuer free of charge. The approval of the prospectus should not be understood as an endorsement of the securities. The securities are products that are not simple and may be difficult to understand. This information includes or relates to figures of simulated past performance. Past performance is not a reliable indicator of future performance.

24/01/2022 04:33:22


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