The Global X FinTech Thematic ETF (NasdaqGM: FINX), the first exchange traded fund dedicated to the fast-growing fintech space, is up almost 22% year-to-date. FINX offers long-term potential due to several important catalysts, including the mobile payments boom.
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.
Electronic and mobile payments are expected to be key drivers of fintech growth in the coming years.
“Recent M&A in the payments industry and growing retailer adoption of cashless transactions further confirms the US payment industry’s growth prospects,” according to Fitch Ratings. “Strong demand for electronic payments capabilities and related technology should support industry fundamentals for merchant acquirers, card processors, network operators, and technology and gateway providers, but large-scale acquisitions may have credit implications.”
Inside the Innovation of Fintech
As expressed by FINX, fintech “encompasses a range of innovations helping to transform established industries like insurance, investing, fundraising, and third-party lending through unique mobile and digital solutions,” according to Global X.
The ETF holds 37 stocks from 10 industries, most of which are from the financial services and technology sectors. About 10 countries are represented in the fund, but the U.S. accounts almost 70% of the ETF’s geographic weight.