A targeted ETF strategy that focuses on the rising usage of smartphones and e-commerce in an increasingly digital age has been among this year’s standout performers.
The ETFMG Prime Mobile Payments ETF (NYSEArca: IPAY) jumped 36.1% year-to-date, compared to the 21.7% gain for the S&P 500.
The ETFMG Prime Mobile Payments ETF was the first-to-market mobile payments ETF that tries to capitalize on the transition taking place from cash and physical credit card payments to a mobile and digital system. The market will continue to benefits from the proliferating usage of smartphones, ecommerce, and the need for quick-and-easy transactions as more consumers go digital, according to ETFMG
Looking ahead, the global mobile payment technology market is expected to reach $3.4 trillion by 2024, at a compound annual growth rate of 60% between 2018 and 2024, according to Zion Market Research. In 2017, the market was at $123.5 billion.
Sam Masucci, CEO of ETFMG, in a note argued that three themes within mobile payments will continue to contribute to the growth of the industry, including Blockchain, Open Banking and Cannabis Banking.
IPAY tries to reflect the performance of the Prime Mobile Payments Index, which tracks the performance of the exchange-listed equity securities of companies across the globe that engage in providing payment processing services or applications, provide payment solutions, build or provide payment industry architecture, infrastructure or software, or provide services as a credit card network.
Top holdings include components like Fidelity national Information Serices 9.4%, Fiserv 8.9%, Mastercard 66.1%, Visa 6.1%, American Express 5.6%, Paypal Holdings 5.3%, Discover Financial Services 3.7%, Global PMTS 3.6%, FLeetcor Technologies 3.5% and Total Sys Services 3.5%.
The ETF also enjoyed large bumps this year after capturing 3 major acquisitions year-to-date, including Fiserv’s buyout of First Data, Fidelity National’s acquisition of Worldpay, and Global Payments buying Telecomm Systems. This sector ETF may continue to enjoy growth as the industry further matures and consolidates.
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