Investors are paying attention to fintech ETFs as the industry soars. Investing in the fintech sector is a great way to grow wealth and diversify your portfolio.
I’ve compiled a list of the best fintech ETFs to build and diversify your portfolio. Before we dig into the top funds, let’s take a look at the fintech sector.
What Is Fintech?
Financial technology (fintech) describes new technology that can improve financial services. Fintech companies often use mobile devices to connect people with financial services.
Innovations in the fintech space have changed the way we see our finances. These include payment apps, peer-to-peer (P2P) transfers, digital wallets and cryptocurrencies. Big banks and other institutions allow some of these things but are slow-moving. New companies and technologies are expanding rapidly.
Today, we can use these new technologies to improve our lives. Online payment apps like PayPal, Square’s Cash App, Apple Pay and Venmo have taken over traditional banking and payment transfer services. With this in mind, let’s take a look at the top fintech ETFs in 2021…
Top Fintech ETFs for 2021
- Global X FinTech ETF (Nasdaq: FINX)
- ARK Fintech Innovation ETF (NYSE: ARKF)
- Ecofin Digital Payments Infrastructure Fund (Nasdaq: TPAY)
- ETFMG Prime Mobile Payments ETF (NYSE: IPAY)
- Amplify Transformational Data Sharing ETF (NYSE: BLOK)
Let’s take a look at these fintech ETFs in more detail…
Fintech ETF Highlights
Global X FinTech ETF
Expense Ratio: 0.68%
Holdings: 65
This fintech ETF invests in companies on the leading edge of the financial technology sector. These companies transform industries like insurance, investing, fundraising and third-party digital lending.
This fund is the oldest and most established on this list. It has been publicly traded for over four years. It tracks the Indxx Global Fintech Thematic Index. This index covers companies involved in mobile payments, P2P and marketplace lending, and alternative currencies. Some of the company’s top holdings are Intuit (Nasdaq: INTU) Block (NYSE: SQ), Fiserv (Nasdaq: FISV) and Ayden (Nasdaq: AYDEN).
ARK Fintech Innovation ETF
Expense Ratio: 0.75%
Holdings: 31
ARKF is ARK’s fintech innovation ETF. This fund seeks long-term growth of capital. The fund invests in companies that are positioned around mobile payments, digital wallets and blockchain technology. A company fits ARKF’s investment theme if…
- It derives a significant portion of its revenue or market value from the theme of fintech innovation
Or…
- It has stated its primary business to be in products and services focused on the theme of fintech innovation.
Like the ETF listed above, this fund’s top holdings include Block and Coinbase (Nasdaq: COIN). Other top holdings include Shopify (NYSE: SHOP), Twilio (NYSE: TWLO) and Discovery (Nasdaq: DISCA).
Ecofin Digital Payments Infrastructure Fund
Expense Ratio: 0.40%
Holdings: 55
Similar to the two above, this fintech ETF also focuses on digital payments. The fund tracks the total return performance of the Ecofin Global Digital Payment Infrastructure Index.
TPAY invests in companies that are engaged in the digital space. It offers exposure to new forms of digital payment like mobile, point-of-sale devices and P2P engines. This fund invests in companies that’s primary business includes…
- Credit card networks
- Digital transaction processing
- Credit card issuing
- Digital payment processing software
- Online financial services.
The fund’s top holdings include Block, Ayden, PayPal,American Express (NYSE: AXP) and Visa (NYSE: V).
ETFMG Prime Mobile Payments ETF
Expense Ratio: 0.75%
Holdings: 54
This fund invests in companies shifting from physical cards and cash transactions to digital systems. It tracks the price and yield performance of the Prime Mobile Payments Index.
This index brings exposure to the mobile and electronic payment industry. Specifically, it tracks the performance of companies that…
- Engage in providing payment processing services or applications
- Provide payment solutions
- Build or provide payment industry architecture, infrastructure or software
- Provide services as a credit card network.
This fintech ETF’s top four holdings are MasterCard (NYSE: MA),Visa, American Express, PayPal and Ayden.
Amplify Transformational Data Sharing ETF
Expense Ratio: 0.71%
Holdings: 47
This fintech ETF invests in companies involved in the development and use of blockchain technology. It does not track an index. Instead, this fund invests in a mix of growth and value stocks. They come from different industries and lead in blockchain-based data sharing technologies.
BLOK’s top holdings include Coinbase, Galaxy (OTC: BRPHF), Nvidia (Nasdaq: NVDA) and Silvergate (NYSE: SI). This fund also invests indirectly in Bitcoin through the Bitcoin Investment Trust.
The Final Line on Fintech ETFs
Fintech ETFs continue to attract investors as the field soars. However, despite the promising future of fintech and continuous innovation, no returns are guaranteed. There are always risks with investing, and you should do your own research before making an investment.
Aimee Bohn graduated from the College of Business and Economics at Towson University. Her background in marketing research helps her uncover valuable trends. Over the past year, her primary focus has been researching IPOs and other trends.
