A decent number of exchange traded funds hit record highs Thursday as the Dow Jones Industrial Average topped 27,000 for the first time. Included in that group were nearly all of the fintech funds trading in the U.S.
The Global X FinTech ETF (NASDAQ: FINX) was one of the fintech ETFs hitting all-time highs. FINX, which is closing in on its third anniversary, tracks the Indxx Global FinTech Thematic Index and has rapidly become one of the leaders in the fintech ETF arena.
Home to $430.88 million in assets under management, FINX “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.
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Why It's Important
FINX is up 37.48% year to date, putting the fund well ahead of traditional financial services and technology ETFs. Top holdings in FINX familiar fintech fare such as Square Inc. (NYSE: SQ), Intuit Inc. (NASDAQ: INTU) and PayPal (NASDAQ: PYPL).
Seismic structural shifts in everyday financial services underpin FINX as a solid idea for long-term investors seeking an alternative to tradition funds dedicated to this sector.
“Cash isn’t king, credit cards are, with 84% usage on a weekly basis,” said Global X in a recent note. “Comparatively, only 11% of consumers use mobile wallets on a weekly basis, and just 6% use peer to peer payments at the same frequency, demonstrating low penetration of the latest FinTech payment options.”
As is often the case with other disruptive themes, demographic changes are driving fintech. Said another way, millennials are important to the fintech investment thesis.
“Much has been made about the different spending patterns of the Millennial generation versus older cohorts, particularly their affinity for technology,” according to Global X. “These unique preferences are apparent in our survey, as Millennials frequently indicated higher adoption, greater interest, and more comfort in new technologies than the next largest population group in the US, the Baby Boomers.”
Year to date, investors have added $64.22 million to FINX.
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