The financial technology theme has struggled to take off this year as a squeeze on investors hits funding. However, the share prices of Global X FinTech ETFโs two top holdings, Intuit and Finserv, have risen in 2023, with the latterโs deal with data expert Plaid offering potential for sector growth.
Global X FinTech ETFโs value has fallen by 20% since July.
Top holding Fiservโs partnership with Plaid could revolutionise mobile banking.
Fintech funding in the Americas rose to $35bn in the first half of 2023.
The Global X FinTech ETF [FINX] has followed a downward trajectory since its 2023 peak at the end of July, slumping by 20.5%. The fund, founded in 2016, offers exposure to companies driving innovation in the financial technology (fintech) space, including firms in banking, investment and insurance; it tracks the Indxx Global FinTech Thematic Index. Over the four weeks to 13 October, FINX fell 8.3%, but it has risen 2.3% year-to-date.
The fundโs lacklustre performance comes despite strong growth for the share price of top holding Intuit [INTU], which has risen 38% year-to-date, although growth slowed to 1.5% in the month to 13 October.
Second-largest holding, Fiserv [FI], tumbled 7.4% in the month to 13 October but grew 11.3% year-to-date. On 12 October, the payments company announced a partnership with data network experts Plaid [PLDIF], a move that could revolutionise consumer access to financial data in the fintech sector.
The fintech theme has struggled of late, driven by a downturn in venture capital as interest rates and inflation soar, factors that could be weighing on FINXโs wider performance.
Broken down by industry, as of 30 September, 50.9% of the fundโs holdings were in IT companies, followed by financials (38.9%), industrials (4.7%), communication services (3.3%) and healthcare.
Earnings of Top-two Holdings Rise
The top-holding Intuit has an 8.4% weighting in FINX. The California-based platformโs portfolio includes names such as Credit Karma, MailChimp and TurboTax.
In August, Intuit reported positive results for the fourth quarter (Q4) of FY 2022/23, delivering revenues of $2.7bn, up 12% year-over-year from $2.4bn. This beat the Zacks Consensus Estimate by 2.7%. The company posted non-GAAP earnings per share of $1.65, a rise of 50% year-over-year, also beating the Zacks estimate of $1.38. However, Intuitโs credit score arm Credit Karma saw revenue fall by 11% to $424m for the quarter.
CMO / NED / CEO / Venture Studio Builder / Emerging Technology ( Blockchain / AI / Web3 / Crypto ) Culture & Consumer
2moBull market = ๐