7 Fintech ETFs to buy now
Financial technology is changing.
The growth of mobile payments and e-commerce is only part of the development of financial technology, or fintech, and its impact on the global banking system. From cryptocurrencies to risk management artificial intelligence to crowdfunding, things are changing for finance in the 21st century. If you are looking to invest in these trends, choosing individual stocks can take a lot of research and, in many cases, a lot of risk. Another option: exchange-traded funds, or ETFs, which offer a simple and diversified way to invest in the fintech revolution. Here are seven fintech ETFs to consider.
ETF Global X FinTech (symbol: FINX)
This Fintech Global X ETF is one of the oldest and most established on the list. Market players interested in accessing an investment with high growth potential, equipped with innovative technologies that are transforming financial services, should turn to FINX. With over $ 1.3 billion in assets and over five years in the public market, FINX is a legitimate ETF with a clear interest behind it. The fund owns more than 50 of the world’s biggest names in fintech. This fund’s tactic is to invest money in companies “at the cutting edge of the emerging fintech sector,” according to Global X’s fund summary. This means that the ETF’s primary stake is Adyen, a Unique Dutch global payments platform that allows businesses to accept online payments on any device. PayPal Holdings Inc. (PYPL), Coinbase Global Inc. (COIN) and Afterpay Ltd. are among the top 10 holdings of the fund. These are all companies that represent major fintech themes, including mobile payments, peer-to-peer and market lending, and blockchain.
ETF Ark Fintech Innovation (ARKF)
The Ark ETF family offers investors unique offerings focused on disruptive technology and growth areas, from biotech stocks to autonomous vehicles. ARKF is the fintech offer, launched in early 2019 and offering exposure to companies in mobile payments as well as in digital wallets and blockchain technology. ARKF offers exposure to a diversified fund that owns risky but state-of-the-art companies in different markets. This Ark fund is an actively managed fund with an expense ratio of 0.75% and net assets worth $ 4 billion. The fund owns more than 40 fintech companies, both foreign and domestic, that provide products or services that have the potential to change the fintech landscape, offering the potential for high capital growth potential. Its No. 1 position is fintech payments Square Inc. (SQ), and the fund owns a handful of digital retail games, including Canadian e-commerce giant Shopify Inc. (SHOP).
ETFMG Prime Mobile Payments ETF (IPAY)
Mobile payments are a big part of the potential that many see in fintech. Just as the digital age has made it easy for investors to access information on the go, smartphones also allow them to transact anywhere on the planet. These transactions can take place without cash, and some can be more secure than a physical credit card. The ETF ETFMG Prime Mobile Payments seeks to match the performance of the Prime Mobile Payments index, a benchmark for the mobile and electronic payments industry. IPAY is pure play in this corner of fintech, with PayPal and Square as well as big dogs such as Visa Inc. (V) and smaller players such as PaySign Inc. (COUNTRY). The fund is one of the first ETFs to target the mobile payments industry. It has over $ 1.2 billion in assets under management, making it one of the largest funds dedicated to fintech.
Ecofin Fund for Digital Payment Infrastructures (TPAY)
A smaller and newer entrant with total net assets of $ 14 million, TPAY is also a variant of digital payments, but one that focuses on the infrastructure required for 21st century transactions rather than trying to select the ones. actions that deal the most in volume. Over 50% of TPAY’s revenue comes from processing electronic transactions. Take, for example, one of the fund’s main holdings, Fiserv Inc. (FISV), which provides risk management, compliance and technology services to banks. Or look to another holding company, DocuSign Inc. (DOCU), which provides security and auditing services. Rather than building up an installed user base with a payments app or requesting billions of linked accounts, these companies see the banks themselves as customers – not consumers – and add an interesting twist to the trend of digital payments. A defining characteristic of Ecofin is that it focuses on sustainable investments by combining ecology and finance with the aim of having a positive impact on society.
SPDR Industry Selected Sector ETF (XLI)
XLI seeks to match the performance and composition of its benchmark, the Industrial Select Sector Index, one of the main economic segments of the S&P 500. As fintech developments such as blockchain and artificial intelligence play a larger role Important in the industrial sector, these companies will become more efficient by streamlining operations, increasing productivity, improving supply chain management and making other improvements. This fund is therefore a way of betting on the efficiency effects that fintech can bring to other industries. XLI has performed in line with its benchmark since its inception in 1998 and has a cumulative return of approximately 17% in 2021. Some of its holdings include leading names such as Honeywell International Inc. (HON), Raytheon Technologies Corp. (RTX), Boeing Co. (BA) and Caterpillar Inc. (CAT).
Vanguard Growth ETF (VUG)
Investors who want access to high growth but low cost securities can turn to VUG. Many companies in this fund are transforming their industries using fintech innovations, so this is another way to bet on the fintech ripple effect. This growth ETF also has the lowest expense ratio on the list at 0.04%. The fund is suitable for a long-term investor taking a passive approach to investing as it includes some of the biggest growth names in its portfolio. It also offers some diversification as the fund only devotes 48% to technology, with the other half allocated to a variety of sectors of the equity market. Some of the top holdings of the fund include Apple Inc. (AAPL), Amazon.com Inc. (AMZN), Facebook Inc. (FB), Tesla Inc. (TSLA) and Nvidia Corp. (NVDA), among many other big names in tech. .
IShares US Financial Services ETF (IYG)
This fund is intended for investors who wish to gain exposure to the financial services sector. With an expense ratio of 0.42%, IYG integrates huge fintech incubators within some of the largest financial firms including Goldman Sachs Group Inc. (GS) and financial services firms such as American Express Co. ( AXP). IYG offers an easy way to invest in the internal efforts of these big players. Not only are these efforts well funded, but they can also be easily supplemented with significant acquisitions that strengthen the dominance of these major financial players.
Fintech ETF to buy now:
– Global X FinTech ETF (FINX)
– Ark Fintech Innovation ETF (ARKF)
– ETFMG Prime Mobile Payments ETF (IPAY)
– Ecofin Fund for Digital Payment Infrastructures (TPAY)
– SPDR fund for the selected industrial sector (XLI)
– Vanguard Growth ETF (VUG)
– iShares US Financial Services ETF (IYG)