A Fintech ETF Off To A Fabulous Start

Hundreds of new exchange traded funds have come to market this year, many of which dwell in the spaces of disruptive technology and thematic investments. Some have been immediately successful while others are still waiting on their moment.

The ARK Fintech Innovation ETF ARKF is in the former group. ARKF, the only new ETF launched this year by New York-based ARK Investment Management, debuted in February and already has $72 million in assets under management. That's a solid start considering the fund charges 0.75% per year, or $75 on a $10,000 investment.

That's pricey even the world of thematic ETF, but ARKF is an actively managed product hailing from a family of highly successful active funds.

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Why It's Important

ARKF, which was one of about 200 ETFs that hit record highs on Monday, takes a broad approach to the burgeoning fintech universe.

“A company is deemed to be engaged in the theme of Fintech innovation if (i) it derives a significant portion of its revenue or market value from the theme of Fintech innovation, or (ii) it has stated its primary business to be in products and services focused on the theme of Fintech innovation,” according to New York-based Ark.

ARKF, which is up 17.24% year to date, can hold 35 to 55 stocks and holds 43 stocks with a median market value of $26 billion. Square SQ and Apple AAPL combine for nearly 16% of the fund's weight.

ARKF emphasizes “fintech innovation,” which ARK defines platforms including blockchain, customer facing platforms, funding platforms, new intermediaries, risk transformation and transaction innovations.

See Also: Here Are The Winners Of The 2019 Benzinga Global Fintech Awards

What's Next

Data confirm ARKF is at the right place right time because fintech market growth is expected to swell over the next several years.

“The global fintech market was valued at about $127.66 billion in 2018, and is expected to grow to $309.98 billion at an annual growth rate of 24.8% through 2022,” according to a recent Business Research report.

ARKF is up 7.36% this month, indicating investors may already be anticipating fintech market growth in 2020.