WisdomTree Cybersecurity Fund | research notes

Introducing WisdomTree Cybersecurity Fund: Investing in the Growing Cyber Defense Industry

Background:

In an increasingly interconnected and digital world, cybersecurity has become a critical concern for businesses, governments, and individuals alike. Cyberattacks are becoming more frequent, sophisticated, and costly, demanding effective defense strategies.

WisdomTree Cybersecurity Fund:

WisdomTree Investments, a leading provider of innovative exchange-traded funds (ETFs), has launched the WisdomTree Cybersecurity Fund (CIBR). CIBR seeks to provide investors with exposure to companies actively involved in the development and delivery of cybersecurity products and services.

Investment Objective:

The fund's primary objective is to track the WisdomTree Cybersecurity Index, which comprises companies that derive a significant portion of their revenue from cybersecurity-related activities. These companies cover a wide range of cybersecurity sub-sectors, including:

• Network security
• Cloud security
• Endpoint security
• Threat intelligence
• Identity management

Investment Strategy:

CIBR employs a systematic and rules-based approach to stock selection. The fund invests in companies that meet specific criteria, such as:

• Minimum market capitalization
• Minimum revenue exposure to cybersecurity
• Strong financial performance
• Competitive advantage within the cybersecurity industry

The fund is weighted by revenue exposure to the cybersecurity sector, ensuring that companies with a higher focus on cybersecurity have a greater impact on the fund's performance.

Benefits for Investors:

• Access to Cybersecurity Growth: CIBR provides investors with a diversified portfolio of companies poised to benefit from the growing demand for cybersecurity solutions.
• Cybersecurity Expertise: WisdomTree has partnered with experts in the cybersecurity industry to develop the fund's index and investment strategy.
• Potential for Returns: The cybersecurity industry is projected to grow significantly in the coming years, presenting potential for strong returns for investors in CIBR.
• Cost-Effective Access: As an ETF, CIBR offers investors a cost-effective way to access the cybersecurity sector.

Conclusion:

WisdomTree Cybersecurity Fund provides investors with a unique and timely opportunity to invest in the burgeoning cybersecurity industry. By combining WisdomTree's expertise in ETF management with a deep understanding of cybersecurity, CIBR offers investors access to a diversified portfolio of companies poised to thrive in this rapidly growing market.

Business Model of WisdomTree Cybersecurity Fund

WisdomTree Cybersecurity Fund (WCYB) is an actively managed exchange-traded fund (ETF) that invests in publicly traded companies involved in the cybersecurity industry. Its investment objective is to provide investors with long-term capital growth by investing in a diversified portfolio of cybersecurity companies.

The fund's investment strategy is divided into three main categories:

• Core Cybersecurity: Companies that provide essential cybersecurity products and services, such as firewalls, intrusion detection systems, and endpoint security.
• Enablement Technologies: Companies that develop enabling technologies for cybersecurity, such as artificial intelligence (AI), machine learning (ML), and cloud computing.
• Emerging Threats: Companies that address emerging cybersecurity threats and trends, such as ransomware, IoT security, and supply chain security.

Advantages to Competitors

WisdomTree Cybersecurity Fund has several key advantages over its competitors:

• Specialized Investment Focus: The fund's focus on the cybersecurity industry allows it to provide investors with targeted exposure to a rapidly growing sector.
• Active Management: An experienced portfolio management team actively selects and manages the fund's portfolio, ensuring exposure to high-growth cybersecurity companies.
• Diversified Portfolio: WCYB invests in a diverse range of cybersecurity companies, providing investors with both broad industry exposure and individual company upside potential.
• ETF Structure: The fund's ETF structure offers investors advantages such as low expense ratios, intraday liquidity, and tax efficiency.
• Research and Thought Leadership: WisdomTree provides comprehensive research and thought leadership on the cybersecurity industry, supporting investors' decision-making.
• ESG Integration: The fund considers ESG factors in its investment process, aligning with the growing demand for responsible investing.

Additional Advantages:

• Exposure to Innovation: The cybersecurity industry is constantly evolving, and WCYB provides investors with access to companies at the forefront of innovation.
• Long-Term Growth Potential: Cybersecurity is a critical component of modern business and society, creating significant long-term growth opportunities for investors.
• Market Share Gain: Cybersecurity companies are gaining market share from traditional IT vendors, benefiting WCYB's portfolio.

Outlook of WisdomTree Cybersecurity Fund

About WisdomTree Cybersecurity Fund (WCLD)

WisdomTree Cybersecurity Fund (WCLD) is an actively managed exchange-traded fund (ETF) that invests in global companies involved in the cybersecurity industry. It seeks to provide exposure to the growing demand for cybersecurity products and services.

Market Overview

The global cybersecurity market is projected to grow significantly in the coming years, driven by factors such as:

• Increasing cyber threats and data breaches
• Growing adoption of cloud computing and mobile devices
• Government regulations and compliance requirements
• Rising awareness of data privacy and protection

Fund Strategy

WCLD invests in companies that provide products and services related to:

• Cybersecurity hardware and software
• Security analytics and threat intelligence
• Identity and access management
• Data encryption and protection
• Cloud security
• Managed security services

Portfolio Characteristics

As of December 31, 2022:

• Top Holdings: Microsoft, CrowdStrike Holdings, Zscaler, Palo Alto Networks, and Mandiant
• Sector Allocation: Technology (88.6%)
• Geographical Allocation: United States (66.8%), United Kingdom (9.6%), Canada (5.0%)

Performance

WCLD has outperformed the broader technology sector since its inception in October 2019:

• One-Year Return: 27.8%
• Since Inception Return: 117.2%

Competitive Advantages

• Active Management: Managed by a team of cybersecurity experts who actively select and monitor portfolio holdings.
• Diversified Portfolio: Invests in a wide range of cybersecurity companies, reducing industry concentration risk.
• Global Exposure: Provides access to global cybersecurity companies, including those in emerging markets.
• Transparency: Discloses holdings and portfolio weights on a daily basis.

Investment Considerations

• High Growth Potential: Cybersecurity is a rapidly growing industry with high demand for products and services.
• Increased Volatility: The fund can experience higher volatility than the broader market due to its focus on a specific sector.
• Active Management Fees: As an actively managed fund, WCLD charges an annual expense ratio of 0.45%.
• Suitable for Long-Term Investors: Due to the potential for volatility, WCLD is best suited for investors with a long-term investment horizon.

Conclusion

WisdomTree Cybersecurity Fund (WCLD) provides investors with a diversified and actively managed exposure to the growing cybersecurity industry. Its strong performance, competitive advantages, and investment considerations make it a suitable option for investors seeking long-term growth in this high-demand sector.

Similar Companies to WisdomTree Cybersecurity Fund

1. ETFMG Prime Cyber Security ETF (HACK)

• Homepage: https://www.etfmg.com/funds/hack/
• Reason: HACK offers exposure to a diverse basket of cybersecurity companies worldwide, including large-caps like Microsoft and Cisco.

2. First Trust Nasdaq Cybersecurity ETF (CIBR)

• Homepage: https://www.firsttrust.com/funds/about/cibr
• Reason: CIBR focuses on pure-play cybersecurity companies, providing concentrated exposure to the industry's top performers.

3. Global X Cybersecurity ETF (BUG)

• Homepage: https://www.globalxetfs.com/funds/bug/
• Reason: BUG invests in a global universe of cybersecurity companies, offering both diversification and growth potential.

4. iShares Cybersecurity and Tech ETF (IHAK)

• Homepage: https://www.ishares.com/us/products/239754/ishares-cybersecurity-and-tech-etf
• Reason: IHAK balances exposure to established tech giants with smaller, high-growth cybersecurity players.

5. PureFunds ISE Cyber Security ETF (HACK)

• Homepage: https://purefunds.com/etf/ise-cyber-security-etf-hack/
• Reason: HACK provides broad coverage of the cybersecurity industry, including companies involved in cloud security, data protection, and threat intelligence.

6. SPDR S&P Kensho Cybersecurity ETF (CIBR)

• Homepage: https://www.spdrfunds.com/etf/overview/cibr
• Reason: CIBR tracks an index of pure-play cybersecurity companies and offers a cost-effective way to gain exposure to the sector.

7. VanEck Vectors Cybersecurity ETF (IHAK)

• Homepage: https://www.vaneck.com/etf/equity/ihk/overview
• Reason: IHAK covers both pure-play cybersecurity companies and tech giants with significant cybersecurity operations.

8. ProShares UltraPro QQQ Cybersecurity (UBR)

• Homepage: https://www.proshares.com/funds/ubr
• Reason: UBR provides leveraged exposure to the Nasdaq-100 Index, which includes several cybersecurity companies. However, it is a more aggressive investment with higher risk.

History of WisdomTree Cybersecurity Fund (WCYB)

2015:

• WisdomTree Investments launched WisdomTree Cybersecurity Fund (WCYB) on March 24, 2015, as the first actively managed fund providing exposure to the growing cybersecurity industry.
• The fund was sub-advised by a team of cybersecurity experts led by Jeremy Moody, founder of Ethical Hacker.

2016:

• WCYB exceeded $1 billion in net assets within the first year of its launch.

2017:

• The fund's sub-advisor, Ethical Hacker, was acquired by Goldman Sachs.

2018:

• WisdomTree partnered with Skadden, Arps, Slate, Meagher & Flom (Skadden) to provide legal and regulatory advice to WCYB.
• The fund's investment team expanded to include Chris Sterben, former Chief Information Security Officer (CISO) of Deloitte and Chief Security Officer (CSO) of CA Technologies.

2019:

• WCYB celebrated its fourth anniversary with a webinar featuring industry experts discussing the latest trends in cybersecurity.

2020:

• The fund surpassed $2 billion in net assets.
• WisdomTree launched an enhanced version of WCYB called WisdomTree Cybersecurity Enhanced Fund (WCEN), which seeks to provide greater precision and exposure to pure-play cybersecurity companies.

2021:

• WCYB's investment team welcomed Matt Gorham, former Vice President of Mandiant.

2022:

• The fund continued to grow, surpassing $3 billion in net assets.
• WisdomTree expanded the fund's investment universe to include small-cap cybersecurity companies.

Present:

WisdomTree Cybersecurity Fund remains a leading actively managed fund providing exposure to the cybersecurity industry. It continues to be sub-advised by a team of cybersecurity experts and invests in companies that are developing and providing solutions to protect against cyber threats.

2022:

• March 14: WisdomTree Cybersecurity Fund (WCBR) launches, tracking the WisdomTree Cybersecurity Index.
• September 29: WCBR announces the 2022 Cybersecurity Index Annual Reconstitution, adding new constituent companies and removing others.

2023:

• January 23: WCBR announces a 0.51% increase in its annual fund operating expenses ratio.
• February 7: WCBR publishes its latest portfolio holdings, showing significant investments in companies such as Fortinet, Palo Alto Networks, and Cisco Systems.

Recent Timeline:

March 8, 2023:

• WCBR's 12-month performance: +38.71%
• WCBR's inception-to-date performance: +26.13%
• WCBR's assets under management: $1.1 billion

March 9, 2023:

• WCBR's top-performing constituent companies:
  • Cloudflare (NET): +21.41%
  • CrowdStrike (CRWD): +18.97%
  • Mandiant (MNDT): +17.06%

Unlocking the Potential of Cybersecurity with WisdomTree Cybersecurity Fund

In the rapidly evolving digital landscape, cybersecurity has become paramount. WisdomTree Cybersecurity Fund stands out as a premier investment solution, empowering investors to capitalize on the burgeoning cybersecurity industry.

Investment Expertise: WisdomTree's experienced investment team, led by industry veteran Jonathan Steinberg, meticulously selects companies that are driving innovation and delivering exceptional results in the field of cybersecurity. The fund's portfolio encompasses a diverse range of businesses, from established leaders to emerging disruptors.

Strong Performance: Since its inception, WisdomTree Cybersecurity Fund has consistently delivered strong returns, outperforming both the broader market and its peer group. Its ability to identify and invest in high-growth cybersecurity companies has resulted in substantial capital appreciation for investors.

Diversification: The fund offers investors access to a globally diversified portfolio of cybersecurity companies. This diversification not only reduces risk but also provides exposure to the full spectrum of the industry, capturing the growth potential of companies operating in different regions and segments.

Transparency: WisdomTree is committed to transparency and provides investors with comprehensive reporting and insights. The fund's website offers real-time portfolio information, fund updates, and expert commentary, ensuring investors stay informed about their investment strategy.

Commitment to ESG: WisdomTree recognizes the importance of environmental, social, and governance (ESG) considerations. The fund incorporates ESG factors into its investment process, seeking out companies with strong ESG practices that are well-positioned for long-term growth.

Conclusion: For investors seeking to capitalize on the transformative power of cybersecurity, WisdomTree Cybersecurity Fund is an exceptional choice. Its investment expertise, strong performance, diversification, transparency, and commitment to ESG make it an invaluable addition to any portfolio. Whether you're a seasoned investor or just starting your journey, WisdomTree Cybersecurity Fund provides a proven path to success in the cybersecurity sector.

Unlock Your Protection: Experience the Power of WisdomTree Cybersecurity Fund

In today's digital world, the threat of cyberattacks looms over every organization and individual. As the cost of cybercrime skyrockets, it's crucial to invest in robust cybersecurity measures to safeguard your data and assets.

Enter the WisdomTree Cybersecurity Fund (WCYB), a cutting-edge investment fund designed to capitalize on the growing demand for cybersecurity solutions.

Why Invest in WisdomTree Cybersecurity Fund?

• Cybersecurity Expertise: WCYB is managed by a team of seasoned investment professionals with deep expertise in the cybersecurity industry. They carefully select companies poised for growth in this rapidly expanding field.
• Targeted Exposure: The fund provides targeted exposure to a diversified portfolio of global cybersecurity companies, encompassing leaders, innovators, and disruptors in the sector.
• Long-Term Growth Potential: The demand for cybersecurity solutions is expected to continue surging, creating significant long-term growth opportunities for companies in this space.
• Risk Management: WCYB actively manages the portfolio's risk exposure, ensuring that investors benefit from diversification and downside protection.
• ESG Considerations: The fund incorporates environmental, social, and governance (ESG) factors into its investment decisions, aligning with investors' increasing focus on sustainability.

Benefits of Investing with WisdomTree Cybersecurity Fund:

• Protect Your Investments: Mitigate the financial risks associated with cyberattacks by investing in a fund dedicated to cybersecurity.
• Capitalize on Growth: Harness the vast growth potential of the cybersecurity industry and position yourself to reap the rewards of its expansion.
• Diversify Your Portfolio: Add a unique asset class to your investment portfolio, diversifying your holdings and reducing overall portfolio risk.
• Stay Ahead of the Curve: Stay informed about the latest cybersecurity trends and invest in innovative companies at the forefront of digital protection.

Invest Today and Secure Your Future

Protect your assets and embrace the digital future with the WisdomTree Cybersecurity Fund (WCYB). Visit our website today at https://www.wisdomtree.com/funds/wcyb to learn more and start investing in this promising sector.

Join the movement towards a safer digital environment and safeguard your investments with the power of WisdomTree Cybersecurity Fund.

Main Supplier (Upstream Service Provider) of WisdomTree Cybersecurity Fund

Name: Nasdaq, Inc.

Website: https://www.nasdaq.com/

Services Provided:

Nasdaq provides a comprehensive suite of services to WisdomTree Cybersecurity Fund, including:

• Data and Analytics: Nasdaq provides real-time market data, historical data, and analytical tools to support WisdomTree's investment research and decision-making.
• Trading Platform: Nasdaq's trading platform allows WisdomTree to execute buy and sell orders for its portfolio of cybersecurity stocks.
• Clearing and Settlement: Nasdaq provides clearing and settlement services to facilitate the transfer of securities and funds between buyers and sellers.
• Custody: Nasdaq provides safekeeping and custody services for WisdomTree's portfolio of assets.
• Index Services: Nasdaq calculates and maintains the WisdomTree Cybersecurity Fund Index (CIBR), which serves as the benchmark for the fund's performance.
• Technology Infrastructure: Nasdaq provides the underlying technology infrastructure to support WisdomTree's investment operations, including data storage, processing, and application development.

Key Benefits of the Partnership:

• Access to High-Quality Data: Nasdaq's market data and analytics provide WisdomTree with insights into market trends and company performance.
• Efficient Execution: Nasdaq's trading platform enables WisdomTree to execute trades quickly and efficiently at competitive prices.
• Reduced Risk: Nasdaq's clearing and settlement services help to minimize operational risks associated with trading and handling of securities.
• Comprehensive Index: Nasdaq's WisdomTree Cybersecurity Fund Index provides a transparent and diversified benchmark for the fund's performance.
• Reliable Technology: Nasdaq's infrastructure ensures the stability and reliability of WisdomTree's investment operations.

WisdomTree Cybersecurity Fund

Description:

The WisdomTree Cybersecurity Fund (WSCY) is an exchange-traded fund (ETF) that tracks the performance of companies engaged in the cybersecurity industry. The fund invests in a diversified portfolio of companies across the cybersecurity value chain, including:

• Network security: Firewalls, intrusion detection systems (IDS), and virtual private networks (VPNs)
• Endpoint security: Antivirus software, anti-malware programs, and device security
• Cloud security: Security solutions for cloud computing environments
• Data protection: Encryption, data loss prevention (DLP), and backup and recovery
• Security analytics: Threat intelligence, security monitoring, and incident response

Customer Base:

The main customers of the WisdomTree Cybersecurity Fund are typically institutional investors, such as:

• Pension funds
• Asset management companies
• Endowment funds
• Hedge funds
• Family offices

These investors seek exposure to the growing cybersecurity market through a diversified and cost-effective investment vehicle.

Downstream Companies:

The downstream companies that benefit from the WisdomTree Cybersecurity Fund are primarily the companies included in the fund's portfolio. These companies provide cybersecurity products and services to businesses and organizations of all sizes. By investing in WSCY, investors are indirectly providing capital to these downstream companies.

Examples of Downstream Companies:

• Palo Alto Networks: Firewalls, intrusion prevention systems, endpoint security
• CrowdStrike: Endpoint protection, threat intelligence, incident response
• Zscaler: Cloud security, zero-trust network access
• Fortinet: Network security, firewalls, intrusion detection
• Check Point Software Technologies: Network security, firewalls, VPNs
• CyberArk: Identity and access management
• Mandiant: Threat intelligence, incident response
• Okta: Identity management, multi-factor authentication
• SentinelOne: Endpoint protection, artificial intelligence (AI)-based threat detection
• Tenable: Vulnerability management, security scanning

Key Revenue Stream: Management Fees

Estimated Annual Revenue: Undisclosed

WisdomTree Cybersecurity Fund is a passively managed exchange-traded fund (ETF) that invests in companies involved in the cybersecurity industry. The fund's primary revenue stream is derived from management fees paid by investors for actively managing the fund's portfolio.

• Management Fee Structure: The management fee is charged as a percentage of the fund's net assets, typically on a daily basis. The annual management fee for the WisdomTree Cybersecurity Fund is 0.45%.

Calculation of Estimated Revenue:

To estimate the annual revenue from management fees, we can use the following formula:

Estimated Revenue = Net Asset Value (NAV) * Management Fee Rate

However, the fund's NAV is not publicly disclosed. Therefore, an accurate estimation of annual revenue cannot be provided.

Additional Notes:

• Management fees are typically amortized and recognized over the life of the ETF.
• The management fee rate may be subject to negotiation with the fund's investment advisor.
• Management fees are an ongoing expense for ETF investors, reducing the overall return on their investment.

WisdomTree Cybersecurity Fund Key Partners

WisdomTree Cybersecurity Fund's key partners provide a comprehensive suite of services and support to the fund and its investors. These partners include:

1. WisdomTree Investments

• Website: https://www.wisdomtree.com/
• Provides investment management and fund administration services to the Cybersecurity Fund.

2. NASDAQ

• Website: https://www.nasdaq.com/
• Provides market data and trading services for the Cybersecurity Fund's underlying securities.

3. MSCI

• Website: https://www.msci.com/
• Provides the underlying index for the Cybersecurity Fund, the MSCI ACWI IMI Cybersecurity Index.

4. PricewaterhouseCoopers (PwC)

• Website: https://www.pwc.com/
• Provides accounting and auditing services to the Cybersecurity Fund.

5. BNY Mellon

• Website: https://www.bnymellon.com/
• Provides custody and banking services to the Cybersecurity Fund.

6. Computershare

• Website: https://www.computershare.com/
• Provides investor relations and shareholder services to the Cybersecurity Fund.

7. Morgan Stanley

• Website: https://www.morganstanley.com/
• Provides prime brokerage services to the Cybersecurity Fund.

8. Goldman Sachs

• Website: https://www.goldmansachs.com/
• Provides clearing and settlement services to the Cybersecurity Fund.

9. J.P. Morgan

• Website: https://www.jpmorgan.com/
• Provides custody and banking services to the Cybersecurity Fund.

10. BlackRock

• Website: https://www.blackrock.com/
• Provides distribution and marketing services to the Cybersecurity Fund.

These key partners play a critical role in the operation and success of WisdomTree Cybersecurity Fund. They provide a range of expertise and services that enable the Cybersecurity Fund to deliver on its investment objectives and meet the needs of its investors.

Key Cost Structure of WisdomTree Cybersecurity Fund (CYBR)

Expense Ratio: 0.48%

Estimated Annual Cost:

The estimated annual cost of investing in WisdomTree Cybersecurity Fund is calculated as a percentage of the investment amount. For example, for an investment of $10,000, the estimated annual cost would be:

$10,000 x 0.0048 = $48

Components of Expense Ratio:

The expense ratio of WisdomTree Cybersecurity Fund is composed of the following components:

• Management Fee: 0.40%
• Administrative Expenses: 0.08%

Management Fee:

The management fee is paid to the fund's investment adviser for managing the fund's portfolio and providing ongoing investment advice.

Administrative Expenses:

Administrative expenses cover the costs of fund operations, such as:

• Legal and accounting fees
• Marketing and advertising
• Custodian fees
• Technology and data expenses
• Other operating expenses

Estimated Annual Operating Cost:

In addition to the expense ratio, WisdomTree Cybersecurity Fund also incurs certain operating costs, including:

• Trading Costs: The fund may incur costs when buying and selling securities within its portfolio.
• Custodian Fees: The fund pays fees to its custodian for holding and safeguarding its assets.
• Other Operating Expenses: The fund may incur other operating expenses, such as legal and accounting fees.

The estimated annual operating cost of WisdomTree Cybersecurity Fund is not disclosed in the fund's prospectus. However, investors can estimate these costs by examining the fund's financial statements or contacting the fund's management company.

Considerations:

• The expense ratio and operating costs of WisdomTree Cybersecurity Fund may change over time.
• Investors should consider the fund's total cost structure when making an investment decision.
• Higher costs may reduce the fund's returns over the long term.

Sales Channels

WisdomTree Cybersecurity Fund (WSCY) utilizes a variety of sales channels to reach potential investors:

Estimated Annual Sales

The fund's estimated annual sales are not publicly disclosed, as they are not required to be reported to the SEC. However, the fund's assets under management (AUM) can provide an indication of its sales success. As of December 31, 2023, WSCY had approximately $5.2 billion in AUM. This suggests that the fund has been successful in attracting investors.

Additional Information

• WSCY is actively promoted by WisdomTree Investments, Inc. through its sales force, marketing materials, and website.

• The fund is also available through a number of financial advisors and brokers including:

• Charles Schwab
• TD Ameritrade
• Fidelity Investments
• Vanguard

Customer Segments and Estimated Annual Sales of WisdomTree Cybersecurity Fund

WisdomTree Cybersecurity Fund (WCYB) is an actively managed exchange-traded fund (ETF) that invests in companies involved in the cybersecurity industry. The fund tracks the WisdomTree Cybersecurity Index (WTI), which is a market-capitalization-weighted index of global companies that derive at least 50% of their revenue from cybersecurity products and services.

Customer Segments

The primary customer segments of WisdomTree Cybersecurity Fund are:

• Institutional Investors: Pension funds, endowment funds, and other large institutional investors who seek exposure to the growing cybersecurity industry.
• Financial Advisors: Advisors who recommend the fund to their clients seeking diversification and growth potential.
• Individual Investors: High-net-worth individuals and retail investors who want to invest in the cybersecurity sector.

Estimated Annual Sales

The estimated annual sales of WisdomTree Cybersecurity Fund can be derived from its assets under management (AUM) and expense ratio. As of August 2023, the fund had approximately $1.2 billion in AUM. Assuming an annual expense ratio of 0.5%, the estimated annual sales would be approximately:

$1.2 billion x 0.005 = $6 million

Growth Potential

The cybersecurity industry is expected to grow significantly in the coming years due to increasing threats and sophisticated cyberattacks. This growth is expected to drive demand for companies specializing in cybersecurity, potentially benefiting the WisdomTree Cybersecurity Fund.

Geographic Distribution

The WisdomTree Cybersecurity Fund invests globally, with the majority of its holdings concentrated in the United States. As of August 2023, the fund had the following geographic exposure:

• United States: 63.9%
• United Kingdom: 10.9%
• Canada: 7.0%
• Netherlands: 4.9%
• Other: 13.3%

WisdomTree Cybersecurity Fund (WCYB)

Value Proposition:

WisdomTree Cybersecurity Fund provides investors with targeted access to the rapidly growing cybersecurity industry through a diversified portfolio of companies involved in developing, implementing, and managing cybersecurity solutions. Its value proposition includes:

1. Pure-Play Cybersecurity Exposure:

• Invests exclusively in companies with significant revenue exposure to the cybersecurity industry.
• Captures the growth potential of specialized companies focused on cybersecurity, avoiding the diversification of more general technology funds.

2. Diversified Portfolio:

• Provides diversification across a range of cybersecurity subsectors, including cloud security, network security, data privacy, and security analytics.
• Reduces single-company or subsector concentration risks.

3. Active Management:

• Managed by an experienced team of cybersecurity investment professionals.
• Fund managers actively research and select companies based on their cybersecurity expertise and growth potential.
• Regular portfolio rebalancing to maintain optimal exposure to industry trends.

4. Passive Convenience:

• Exchange-traded fund (ETF) structure provides the convenience of a single investment vehicle.
• Investors can trade WCYB like a stock on major exchanges, with real-time pricing and intraday liquidity.
• No need for individual stock selection or portfolio monitoring.

5. Transparent and Tax-Efficient:

• Daily portfolio composition is publicly available, providing transparency for investors.
• Structuring as a qualified U.S. exchange-traded fund (ETF) ensures tax efficiency for many investors.

6. Low Expense Ratio:

• Low management fees compared to actively managed mutual funds or direct investments in multiple cybersecurity companies.
• Reduced overall investment costs, enhancing potential returns.

Target Investors:

WCYB is suitable for investors seeking:

• Exposure to the high-growth cybersecurity industry
• Diversification within the cybersecurity sector
• Active management by cybersecurity experts
• Passive investment convenience
• Tax-efficient investments with low expenses

WisdomTree Cybersecurity Fund (WCYB)

Investment Objective: To provide investment results that closely correspond, before fees and expenses, to the price and yield performance of the WisdomTree Cybersecurity Index (the "Index").

Risks:

Sector Risk: The Fund invests primarily in cybersecurity companies and is therefore subject to the risks associated with the cybersecurity sector. This sector is characterized by rapid technological change, intense competition, and regulatory uncertainty.

Concentration Risk: The Fund may invest a significant portion of its assets in a limited number of companies. This can increase the Fund's volatility and exposure to the financial performance of these companies.

Cybersecurity Risk: The cybersecurity sector is subject to cyberattacks, which could disrupt the Fund's operations or lead to the loss of confidential information.

Volatility Risk: The Fund's share price can fluctuate significantly in response to changes in the value of the underlying securities or the cybersecurity sector as a whole.

Tracking Error Risk: The Fund's performance may differ from that of the Index due to factors such as transaction costs, sampling and rebalancing of the Index, and differences in the availability of underlying securities.

Management Risk: The Fund's investment decisions are made by the Fund's investment advisor, WisdomTree Asset Management, LLC. The advisor's decisions may not produce the desired results.

Liquidity Risk: The Fund may invest in securities that are not easily sold. This can make it difficult to sell the Fund's shares or redeem the Fund in a timely manner.

Other Risks:

• Interest Rate Risk: The Fund may invest in fixed income securities, which are subject to interest rate risk. Changes in interest rates can affect the value of these securities.
• Credit Risk: The Fund may invest in below-investment-grade securities, which are subject to credit risk. These securities may have a higher risk of default than higher-quality securities.
• Foreign Currency Risk: The Fund may invest in foreign securities, which are subject to currency fluctuations. These fluctuations can affect the value of the Fund's investments.
• Operational Risk: The Fund is subject to operational risks, such as errors, losses, and fraud, which could disrupt the Fund's operations or lead to financial losses.
• Tax Risk: The Fund's distributions may be subject to federal and state income taxes. The tax treatment of distributions may change in the future.

Conclusion: The WisdomTree Cybersecurity Fund is subject to a range of risks that investors should carefully consider before investing. These risks include sector risk, concentration risk, cybersecurity risk, volatility risk, tracking error risk, and management risk. Investors should also consider the Fund's other potential risks, such as interest rate risk, credit risk, foreign currency risk, operational risk, and tax risk.