Ark Investment Management, the investment manager behind a series of unique Internet and technology exchange traded funds, could add to its ETF stable with a new fintech fund.
“The product, the ARK Fintech Innovation ETF, will invest in companies working to change the way the financial sector operates, according to a regulatory filing,” reports Bloomberg.
Established Ark ETFs include higher fliers such as the ARK Genomic Revolution Multi-Sector ETF (NYSEArca: ARKG), ARK Innovation ETF (NYSEArca: ARKK) and ARK Web x.0 ETF (NYSEArca: ARKW). Those funds are actively managed.
ARKW centers its investments on long-term growth of capital where 80 percent of its assets in domestic and foreign equity securities of companies coincide with the ETF’s investment theme of Web x.0. This includes companies in the forefront of web technology, such as cloud computing, cyber security, big data, and machine learning.
Fintech allows financial firms to leverage cutting edge technology to reduce costs, improve decision making and risk controls, remove middlemen and enhance customer experiences.
Core Competency
“The concept is right in the sweet spot for the New York-based $2.3 billion ETF issuer, which has made a name for itself running funds focused on innovation, the internet and genomics,” according to Bloomberg.
Thematic strategies tend to be alpha-seeking, have a long time horizon and are growth oriented. The thematic investments also transcend classic sector, industry and geographic classifications as many overlap.
Competitors in the fintech ETF arena include the Global X FinTech Thematic ETF (NasdaqGM: FINX). FINX targets companies on the leading edge of emerging financial technology industry, which includes a range of innovations that caters toward businesses engaged in insurance, investing, fundraising and third-party lending through unique mobile and digital solutions.
“The US FinTech industry is on a positive growth trajectory due to healthy economic trends and beneficial secular changes that results in a revenue opportunity for global payments that exceeds $2 trillion,” said Fitch Ratings in a recent note.
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