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Move Over FANGs, FinTech ETF is Hot Now

Neena Mishra
Updated
Investors need to pay close attention to Vipshop Holdings (VIPS) stock based on the movements in the options market lately.

Investors love tech stocks and ETFs as tech continues to be the best performing sector this year, up about 15%. Some niche tech ETFs have done much better. One of them is the Global X FinTech ETF (FINX) that focuses on the emerging financial technology industry. It has risen about 24% this year.

FinTech industry combines finance and technology and is comprised of disrupters that aim to cut costs and improve the quality of financial services.

In this episode of ETF Spotlight, I dicussed FINX with Jay Jacobs, head of research & strategy at Global X.

First off, Jay talked about the industry, its key growth drivers and why investors should look at this space.

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While the industry is not too big currently, it has been growing rapidly and has excellent growth prospects.

Jay also talked about how companies are selected and weighted in the index.

FinTech is a global growth story. Not surprisingly, in addition to the usual suspects like PayPal (PYPL) and Square (SQ), it holds some highly innovative foreign companies that do not find place in other US tech or financial ETFs.

FINX made its debut in September 2016 but it did not get much attention for many months. However, over the past year or so, it has seen rising investor interest. We discussed some of the reasons behind this enthusiasm, in addition to solid performance.

In fact, the global payments industry is very hot as of now. There were 102 M&A transactions worth a total of $46 billion in the first six months of 2018, according to Dealogic, topping 2017’s full-year figure of $32.9 billon.

Global X also has some other very interesting thematic ETFs including the Robotics & Artificial Intelligence ETF (BOTZ) and the Internet of Things ETF (SNSR). 

Jay explained how investors could benefit from these powerful macro-level themes and trends as well as how these strategies should be used in a portfolio. Check out the podcast for details.

Make sure to be on the lookout for the next edition of the ETF Spotlight! If you have any comments or questions, please email podcast@zacks.com.

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Square, Inc. (SQ) : Free Stock Analysis Report
 
PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
 
GLBL-X FINTECH (FINX): ETF Research Reports
 
GLBL-X IOT ETF (SNSR): ETF Research Reports
 
GLBL-X ROB&ART (BOTZ): ETF Research Reports
 
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Zacks Investment Research
 
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report