2022 has been a challenging year for technology investors, given that inflation fears are slamming the sector with volatility. However, for the long-term growth horizon, financial technology, or simply fintech, is still a solid bet.
Fintech was one of the hot sectors amid the height of the pandemic, but it’s fallen asunder since then. With inflation bringing down the tech sector as a whole, fintech was dragged down as well, but a study recently showed that despite the recent weakness, fintech showed resilience over the past couple of years.
“The Global COVID-19 Fintech Impact and Resilience Study, published by the Cambridge Centre of Alterative Finance (CCAF), the World Bank Group, and the World Economic Forum, has concluded that the fintech industry was more resilient to the pandemic than previously stated in an earlier report from December 2020,” a Finextra article noted.
While stock market indexes may fall, innovation continues. That’s exactly what fintech firms are accomplishing as disruptive technology continues to take hold of the financial sector, changing the way businesses and individuals process financial transactions.
“Fintech firms are transforming the financial sector by driving innovation, introducing more competition and expanding access to financial services; the survey indicated that fintech firms have served women, SMEs and low-income households—people who have traditionally faced challenges in accessing financial services," the article added.
Getting Fintech Exposure for Growth
With the growth potential of the fintech industry, it opens opportunities for exchange traded funds (ETFs) that focus squarely on this technology sub-sector. As such, one fund to consider is the Global X FinTech ETF (FINX ).
FINX seeks to provide investment results that correspond to the Indxx Global Fintech Thematic Index. The index is designed to provide exposure to exchange-listed companies in developed markets that provide financial technology products and services, including companies involved in mobile payments, peer-to-peer (P2P) and marketplace lending, financial analytics software, and alternative currencies, as defined by the index provider.
The fund gives investors exposure to:
- High growth potential: FINX enables investors to access high growth potential through companies that are applying technological innovations to disrupt and improve the delivery of financial services.
- An unconstrained approach: The fund’s composition transcends classic sector, industry, and geographic classifications by tracking an emerging theme.
- ETF efficiency: In a single trade, FINX offers access to dozens of companies with high exposure to the fintech theme.
Overall, FINX offers exposure to an area of tech that should continue to see more investor interest.
For more news, information, and strategy, visit the Thematic Investing Channel.