Fund Offers Exposure to Financial Technology

Financial technology, as some might say, is too important to be left to the financiers.

Indeed, it is hard to find a sector of the economy that hasn’t been touched by financial technology innovations, including the insurance, fundraising and third-party lending sectors. The Global X FinTech ETF (NASDAQ: FINX) offers prospective investors access to this dynamic sector of the economy.

Specifically, FINX focuses on providing investment results that generally correspond to the price and yield performance, before fees and expenses, of the Indxx Global FinTech Thematic Index. This approach is particularly salient because FINX can transcend sector, industry and geographical classifications. For example, FINX has holdings that are in North America (73%), Europe (17%) and the Asia-Pacific region (10%).

Some of this exchange-traded fund’s (ETF) largest positions include PayPal Holdings Inc. (NASDAQ: PYPL), SS&C Technologies Holding (NASDAQ: SSNC), Intuit Inc. (NASDAQ: INTU), Fiserv Inc. (NASDAQ: FISV), Temenos Group AG-Reg (OTCMKTS: TMSNY), Square Inc. (NYSE: SQ), Fidelity National Info SE (NYSE: FIS) and First Data Corp — Class A (NYSE: FDC).

While these companies are mainly in the technology arena (78%), this ETF has holdings in companies that are in the financial (11%), health care (3%) and other (8%) sectors, too.

The fund currently has $361 million in net assets and an average spread of 0.23%. It also has an expense ratio of 0.68%, meaning that it is more expensive to hold in comparison to other exchange-traded funds.

In terms of FINX’s MSCI ESG Fund Quality Score of 4.79, it ranks in the 17^th percentile within its peer group and in the 28^th percentile within the global universe of all funds in the MSCI ESG Fund Metrics coverage.

Chart Courtesy of StockCharts.com

This fund’s performance has been quite solid in the long term. While it only has been up 3.65% over the past month, it rose 14.94% over the past three months and remains up 29.88% year to date. In short, while FINX does have several advantages over some of its peer funds and provides an investor with a way to pursue profits from some truly cutting-edge technology, this ETF’s risks and costs are not zero.

Thus, interested investors should always do their due diligence and decide whether the fund is suitable for their portfolios.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Investing Edge, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.