Cybersecurity Needed to Protect Smart Homes From Digital Burglars
15 May 2024
Most people have encountered some form of cybercrime, ranging from computer viruses or email scams to account hacking or phishing. As more services become available online, personal information such as name, social security number, and date of birth become invaluable to hackers, making it even more important to protect this data.
But some of this data is accessible through our home devices. In fact, any remote device (such as smart TVs, thermostats, or security cameras) that transmits information over the internet is vulnerable to hackers. The connected device can be their gateway to a bank account or other personal information.
In a recent blog post1, research firm Parks Associates revealed that growing numbers of consumers are suffering privacy and security incidents: the number has risen from 36% of survey respondents in 2018 to 54% in 2023 (see left graph). Not surprisingly, consumers are concerned about hackers accessing their data. The number of respondents expressing concern rose by 21% between the second quarter (Q2) of 2021 and Q2 2023 (see right graph).
Consumers Experienced More Online Privacy and Security Issues
% of US internet HHs experiencing data privacy/security issue in prior 12 months
People Are More Concerned About Hackers Accessing Personal Data
% of US internet HHs concerned about hackers, others who have bad intentions online, accessing personal data
Source: Parks Associates, 18 April 20241
Interest in Data Security Services is Increasing
That explains the mounting interest in data security and willingness to pay for it. Often these security services come bundled with other products.
Microsoft, for example, bundles its security offerings with its other software, such as Windows or its Azure cloud service. Several Internet service providers include cybersecurity in their subscriptions. For example, customers of Dutch internet service provider Ziggo receive a free subscription to Ziggo Safe Online (developed by security company F-Secure) for one device. For a small monthly fee, they can also purchase protection for additional devices.
Alternatively, consumers can use dedicated cybersecurity software from companies such as Norton (part of the security company Gen) or McAfee, which is often bundled with a device (new laptop or PC).
All these examples of data security packages almost always include a combination of antivirus software, firewalls, virtual private networks (VPNs), and other measures to protect our online lives, such as safe browsing and password safes. Each of these has a different role to play. For example, firewalls protect your network from unauthorized access and malicious threats, while VPNs encrypt your internet traffic and increase your privacy and anonymity online. Antivirus software is designed to detect, prevent and remove malicious software (malware) from your devices. Together, they create a robust defense against cyber threats, and ensure a safer and more secure browsing experience.
Investing in Cybersecurity – the Employer Angle
As cybersecurity becomes more important, it is natural for our VanEck Smart Home Active UCITS ETF to invest in this segment. Some of its investments include companies that bundle cybersecurity into their (cloud) products, such as Microsoft, Amazon, and Google (Alphabet). However, a more interesting angle that we have been exploring is the employer perspective.
Why? Well, remote working expands the attack surface for cybercrime as people log into corporate systems on their laptops, tablets and phones, accessing and uploading private data and corporate documents. With more and more people working from home and the risk of cyber-attacks on the rise, employers need to make their (remote) workforces cyber secure.
Since 2008, corporate IT spending has been growing at 3-4% per year, and cybersecurity is taking a growing share of that budget, according to Morgan Stanley.2 Security software budgets are growing three times faster than overall software and IT spend (see graph).
Our team is most interested in the companies benefiting from these growing budgets, such as Check Point Software Technologies, ZScaler and CrowdStrike. These three companies are among the top security holdings in the ETF’s portfolio.
Security Budgets Grow 3x Faster Than Total Software and IT Spend
Budget growth - security vs. total software vs. overall IT (MS 4Q23 CIO Survey)
Source: Morgan Stanley via Softwareanalyst Substack.2
With both consumers and businesses making cybersecurity a top priority, this segment will continue to be a growing part of the smart home ecosystem. As homes become more digitized, so they need to stay a step ahead of a new breed of digital burglar.
IMPORTANT INFORMATION
This is a marketing communication. Please refer to the prospectus of the UCITS and to the KID before making any final investment decisions.
This information originates from Dasym Managed Accounts B.V. with registered address at Flevolaan 41 A, 1411 KC Naarden, the Netherlands (DMA), DMA is an investment company incorporated under Dutch law and regulated by the Dutch Authority for the Financial Markets (AFM) and the Dutch Central Bank (DNB). The information prepared by DMA is intended only to provide general and preliminary information to investors and shall not be construed as investment, legal or tax advice. The views and opinions expressed in this presentation are those of the author(s) but not necessarily those of DMA. DMA and its associated and affiliated companies (together “Dasym”) assume no liability with regards to any investment, divestment or retention decision taken by the investor on the basis of this information. Dasym makes no representation or warranty, express or implied, as to the accuracy or completeness of any of the information contained in this blog. Dasym undertakes no responsibility to update the information prepared by it and contained in this blog.
This information is published by VanEck (Europe) GmbH. VanEck (Europe) GmbH, with registered address at Kreuznacher Str. 30, 60486 Frankfurt, Germany, is a financial services provider regulated by the Federal Financial Supervisory Authority in Germany (BaFin). The information is intended only to provide general and preliminary information to investors and shall not be construed as investment, legal or tax advice. VanEck (Europe) GmbH and its associated and affiliated companies (together “VanEck”) assume no liability with regards to any investment, divestment or retention decision taken by the investor on the basis of this information. The views and opinions expressed are those of the author(s) but not necessarily those of VanEck. Opinions are current as of the publication date and are subject to change with market conditions. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results. Information provided by third party sources is believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck assumes no liability for the content of any linked third-party site, and/or content hosted on external sites. Brokerage or transaction fees may apply.
VanEck Asset Management B.V., the management company of VanEck Smart Home Active UCITS ETF (the "ETF"), a sub-fund of VanEck UCITS ETFs plc, engaged Dasym Managed Accounts B.V., an investment company regulated by the Dutch Financial Service Supervisory Authority (AFM), as the investment advisor for the Fund. The Fund is registered with the Central Bank of Ireland and actively managed. Investing in the ETF should be interpreted as acquiring shares of the ETF and not the underlying assets.
Investors must read the sales prospectus and key investor information before investing in a fund. These are available in English and the KIIDs/KIDs in certain other languages as applicable and can be obtained free of charge at www.vaneck.com, from the Management Company or from the following local information agents:
Austria - Facility Agent: Erste Bank der oesterreichischen Sparkassen AG
Germany - Facility Agent: VanEck (Europe) GmbH
Spain - Facility Agent: VanEck (Europe) GmbH
Sweden - Paying Agent: Skandinaviska Enskilda Banken AB (publ)
France - Facility Agent: VanEck (Europe) GmbH
Portugal - Paying Agent: BEST – Banco Eletrónico de Serviço Total, S.A.
Luxembourg - Facility Agent: VanEck (Europe) GmbH
All performance information is based on historical data and does not predict future returns. Investing is subject to risk, including the possible loss of principal.
No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of Dasym and VanEck.
© VanEck (Europe) GmbH / Dasym Managed Accounts B.V.
Important Disclosure
This is a marketing communication. Please refer to the prospectus of the UCITS and to the KID before making any final investment decisions.
This information originates from Dasym Managed Accounts B.V. with registered address at Flevolaan 41 A, 1411 KC Naarden, the Netherlands (DMA), DMA is an investment company incorporated under Dutch law and regulated by the Dutch Authority for the Financial Markets (AFM) and the Dutch Central Bank (DNB). The information prepared by DMA is intended only to provide general and preliminary information to investors and shall not be construed as investment, legal or tax advice. The views and opinions expressed in this presentation are those of the author(s) but not necessarily those of DMA. DMA and its associated and affiliated companies (together “Dasym”) assume no liability with regards to any investment, divestment or retention decision taken by the investor on the basis of this information. Dasym makes no representation or warranty, express or implied, as to the accuracy or completeness of any of the information contained in this blog. Dasym undertakes no responsibility to update the information prepared by it and contained in this blog.
This information is published by VanEck (Europe) GmbH. VanEck (Europe) GmbH, with registered address at Kreuznacher Str. 30, 60486 Frankfurt, Germany, is a financial services provider regulated by the Federal Financial Supervisory Authority in Germany (BaFin). The information is intended only to provide general and preliminary information to investors and shall not be construed as investment, legal or tax advice. VanEck (Europe) GmbH and its associated and affiliated companies (together “VanEck”) assume no liability with regards to any investment, divestment or retention decision taken by the investor on the basis of this information. The views and opinions expressed are those of the author(s) but not necessarily those of VanEck. Opinions are current as of the publication date and are subject to change with market conditions. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results. Information provided by third party sources is believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck assumes no liability for the content of any linked third-party site, and/or content hosted on external sites. Brokerage or transaction fees may apply.
VanEck Asset Management B.V., the management company of VanEck Smart Home Active UCITS ETF (the "ETF"), a sub-fund of VanEck UCITS ETFs plc, engaged Dasym Managed Accounts B.V., an investment company regulated by the Dutch Financial Service Supervisory Authority (AFM), as the investment advisor for the Fund. The Fund is registered with the Central Bank of Ireland and actively managed. Investing in the ETF should be interpreted as acquiring shares of the ETF and not the underlying assets.
Investors must read the sales prospectus and key investor information before investing in a fund. These are available in English and the KIIDs/KIDs in certain other languages as applicable and can be obtained free of charge at www.vaneck.com, from the Management Company or from the following local information agents:
UK - Facilities Agent: Computershare Investor Services PLC
Austria - Facility Agent: Erste Bank der oesterreichischen Sparkassen AG
Germany - Facility Agent: VanEck (Europe) GmbH
Spain - Facility Agent: VanEck (Europe) GmbH
Sweden - Paying Agent: Skandinaviska Enskilda Banken AB (publ)
France - Facility Agent: VanEck (Europe) GmbH
Portugal - Paying Agent: BEST – Banco Eletrónico de Serviço Total, S.A.
Luxembourg - Facility Agent: VanEck (Europe) GmbH
Performance quoted represents past performance. Current performance may be lower or higher than average annual returns shown. Discrete performance shows 12-month performance to the most recent quarter-end for each of the last 10 years where available. E.g. '1st year' shows the most recent of these 12-month periods and '2nd year' shows the previous 12 months period and so on.
Performance data for the Irish domiciled ETFs is displayed on a Net Asset Value basis, in Base Currency terms, with net income reinvested, net of fees. Returns may increase or decrease as a result of currency fluctuations.
All performance information is based on historical data and does not predict future returns. Investing is subject to risk, including the possible loss of principal.
No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of Dasym and VanEck.
© VanEck (Europe) GmbH / Dasym Managed Accounts B.V.
