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Best Fintech ETFs to buy in 2022

ETFs, Thematic Investing

Written by:

Alex Yeo

What is Fintech?

Financial technology or Fintech is a broad term referring to using technology to deliver financial services instead of the traditional approach. This term has grown to encompass Artificial intelligence, Blockchain, cloud computing, big data, payment processing, software, hardware and anything else under the sun that is contributing to an improvement from traditional financial services.

Best Fintech ETFs

Some of the most popular and largest fintech thematic ETFs are listed in the table below

ETFARK Fintech InnovationGrayscale Future of FinanceGlobal X FinTech
ExchangeNYSENYSENasdaq
TickerARKFGFOFFINX
Inception date4/2/191/2/2212/9/16
DenominationUSDUSDUSD
Expense ratio0.75%0.7%0.68%
Fund size881.95m6.07m584.97m
No. of holdings312166
Top 10 holdings weighting63.11%68.28%54.59%
Top 10 holdings (in order)Block, Shopify, Coinbase, Twilio, UiPath, MercadoLibre, Robinhood, Draftkings, Discovery, Silvergate CapitalRobinhood, Paypal, Coinbase, Block, Plus500, Marathon Digital, HIVE Blockchain, Riot Blockchain, Silvergate Capital, Hut 8 Mining CorpPaypal, Fiserv, Block, Intuit, Adyen, Fidelity National Information Services, Global Payments, Bill.com, SS&C Technologies, Jack Henry & Associates

ARK Fintech Innovation (ARKF)

Before we go into detail, it is crucial to note that ARKF is one of the most actively managed ETF, with daily reports on trades.

Hence it is a must for potential investors of ARKF to access the ark fund website at the link here to review its holdings before making an investment.

Its safe to say that to invest into an ARK ETF is to invest with Cathie Wood,  the founder, CEO and CIO of Ark. Cathie Wood is famous for putting together a fund that focuses on emerging and disruptive technologies and thematic strategy. Her bold approach to investing have put her in the spotlight with the funds outperforming the market in 2020 before coming down in 2021 and 2022.

ARKF focuses on exposure to innovation with a thematic multi-cap exposure to fintech innovations including mobile payments, digital wallets, peer-to-peer lending, blockchain technology and risk transformation.

ARKF aims to capture long-term growth with correlation of relative returns to traditional growth strategies and negative correlation to value strategies and as such, views itself as a tool for diversification.

The ARKF fund focuses on business platforms such as transaction innovations, blockchain technology, risk transformation, frictionless funding platforms, customer facing platforms and new intermediaries.

The top 10 holdings as of 30 June 22 are as follows:

Grayscale Future of Finance (GFOF)

GFOF is an ETF that seeks to invest in the companies and technologies shaping the “future of finance.” GFOF offers investors the opportunity to benefit from innovative businesses that are integral in evolving the financial system to build the digital economy across three pillars:

These three pillars would offer investors exposure to the innovators at the intersection of finance, technology and digital assets. As the digital economy continues to drive innovation and transformation of the financial system, there will increasingly be higher volume of improved efficiencies, faster settlements, and greater access.

Here are the Top 10 holdings as of 6 September 22

The sector and industry breakdown are as follows:

Although not as actively managed as ARKF, similarly it is worthwhile checking out the website here for the latest developments before an investment is made.

Global X Fintech (FINX)

The Global X FinTech ETF (FINX) seeks to invest in companies on the leading edge of the emerging financial technology sector, which encompasses a range of innovations helping to transform established industries like insurance, investing, fundraising, and third-party lending through unique mobile and digital solutions.

FINX looks at the following fintech sub themes when identifying stocks with potential for inclusion into its ETF.

Mobile Payments: Companies that provide platforms and services that focus on peer-to-peer mobile payments and POS (Point-of-sale) services.

Peer-to-Peer (P2P) and Marketplace Lending: Companies that provide online platforms for peer-to-peer and marketplace lending that is disrupting the traditional lending sector.

Enterprise Solutions: Companies that provide scalable technology solutions focused on disrupting traditional areas of financial services such as lending, credit scoring and banking.

Crowd-Funding: Companies that provide online platforms for sourcing funds from individual members.

Blockchain and Alternative Currency Developers: Companies that are involved in the development of blockchain technology, or that utilize blockchain technology to provide financial services. Companies that are involved in the development of other alternative currencies are also eligible for inclusion.

Personal Finance Software, Automated Wealth Management and Trading: Companies that are involved in developing personal finance software, robo-advisor solutions that leverage automation/algorithms, and/or are technology-enabled investment solution providers.

The top 10 holdings in FINX are as follows:

The industry and country breakdown are as follows:

Similarly, as it is an actively managed ETF, it is worthwhile checking out the website here for the latest developments before an investment is made.

Closing statement

ETFs have become cheap and easy ways to invest in the markets. They are cheaper than unit trusts and you just need to bet on the general theme rather than having to spend effort and time to get the stock picks right.

We have shared with you 3 ETFs you can consider if you wish to bet on FinTech. As the FinTech theme is broad, each ETF currently has a different focus. The ARKF ETF targets platforms and intermediaries while the GFOF ETF has a larger proportion in blockchain applications and crypto assets. Finally, the FINX ETF has allocated a larger proportion of its assets to mobile payment companies and enterprise solutions.

It is clear that all 3 ETFs are quite varied, but each of them covers a broad range of the theme and would be a beneficiary as demand for FinTech continues to grow.

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