Another new exchange traded fund recently joined the thematic ETF fray, this one focusing on the burgeoning fintech market. The Amplify CrowdBureau Peer-to-Peer Lending & Crowdfunding ETF (NYSEARCA: LEND) debuted on May 9.
LEND seeks investment results that generally correspond to the CrowdBureau Peer-to-Peer (P2P) Lending & Equity Crowdfunding Index (the Index),” according to Amplify ETFs. “The Index is comprised of companies that 1) operate the platforms that facilitate P2P lending and investment-based crowdfunding, and 2) provide the technology & software that enable the operation of these platforms.”
By focusing on crowdfunding and peer-to-peer lenders, LEND represents a new avenue for investors to access fintech investments.
“The financial services sector is often viewed as a value proposition, not a destination for investors seeking growth. Fintech is reshaping the growth proposition in the normally staid financial services sector and investors can tap that growth with exchange traded funds (ETFs),” according to Nasdaq.
Looking At Lend
LEND allocates half its weight to developed market stocks and another 50% to emerging markets fare. The new ETF is a blend fund in terms of market capitalization, but 58% of its holdings are classified as mid-cap stocks. LEND, which charges 0.65% per year, or $65 on a $10,000 investment, is home to 34 stocks.
“Crowdfunding is an umbrella term generally referring to the financing method, typically internet-based, by which capital is raised through the solicitation of small individual investments or contributions from a large number of persons, entities or institutions that lend money directly or indirectly to businesses or consumers,” according to Amplify.
As is the case with many cap-weighted thematic ETFs, there is some holdings-level concentration risk with LEND as just three stocks – LendingTree, Inc. (NASDAQ: TREE), Qudian Inc.(NYSE: QD) and LexinFintech Holdings Ltd. (NASDAQ: LX) – combine for over half the new ETF’s weight.
LEND’s roster includes an 80% tilt toward peer-to-peer lenders and crowdfunding equity platforms and a 14% allocation to software and technology services providers.
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