Cybersecurity Portfolio, 38

"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

• The global cybersecurity market is anticipated to reach $638.2 billion by 2032, up from $205.8 billion in 2023 and is anticipated to have a compound annual growth rate (CAGR) of 13.4% over the 2024-2032 period.1¹


• Worldwide spending on hardware, software, and services related to cybersecurity was anticipated to reach $219 billion in 2023, a 12.1% increase from 2022 according to the International Data Corporation (IDC). The IDC expects investments in cybersecurity solutions and services to reach nearly $300 billion in 2026.


• In 2015, global ransomware damage costs were $325 million. By 2031, the costs are estimated to exceed $265 billion annually, with an attack on a business, consumer, or device every two seconds.²



Portfolio Objective

This unit investment trust seeks above-average capital appreciation; however, there is no assurance the objective will be met.

¹ Astute Analytica
² Cybersecurity Ventures

You should consider the portfolio's investment objective, risks, and charges and expenses carefully before investing. Contact your financial professional 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.

Risk Considerations
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 “Information Technology” risks listed previously. 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.

Securities of non-U.S. issuers are subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting non-U.S. issuers.

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.

Large capitalization companies may grow at a slower rate than the overall market.

As the use of Internet technology has become more prevalent in the course of business, the trust has become more susceptible to potential operational risks through breaches in cybersecurity.

Ongoing armed conflicts between Russia and Ukraine in Europe and among Israel, Hamas and other militant groups in the Middle East, have caused and could continue to cause significant market disruptions and volatility within the markets in Russia, Europe, the Middle East and the United States. The hostilities and sanctions resulting from those hostilities could have a significant impact on certain investments as well as performance.

The ongoing effects of the COVID-19 global pandemic, or the potential impacts of any future public health crisis, may cause significant volatility and uncertainty in global financial markets. While vaccines have been developed, there is no guarantee that vaccines will be effective against future variants of the disease.

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.

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.