One byproduct of the coronavirus outbreak is the heavier reliance on technology is opening opportunities for exchange-traded fund (ETF) investors to take advantage of the innovation. One area that’s helping to keep small businesses afloat is a financial technology (fintech), particularly when it comes to loans.
“Fintech is able to speed up access to capital by using cutting-edge technology to streamline the financing process,” a TechRadar article noted. “Leading providers are creating solutions that cut out the middlemen who slow down traditional loan and investment applications, reducing both the time and cost involved in securing funding.”
The article went on to say that, in particular, that blockchain “is one of the most powerful tools in this area, as it digitizes many of the aspects that have previously required complex back-end actions or third-party intervention. Alternative business finance platforms built on the blockchain can validate transactions immediately, for speedier contract exchange and cash clearing. Additionally, the use of blockchain reduces the counterparty and settlement risk between companies and investors.”
One fund to take advantage of within financial innovation is the Goldman Sachs Motif Finance Reimagined ETF (GFIN). GFIN seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Motif Finance Reimagined Index.
The fund seeks to achieve its investment objective by investing at least 80% of its assets in securities included in its underlying index. The index is designed to deliver exposure to companies with common equity securities listed on exchanges in certain developed markets that may benefit from the on-going structural changes in the support and delivery of financial services.
Other ETFs to look at in the growing fintech space include the Global X FinTech ETF (NasdaqGM: FINX) and the ARK Fintech Innovation ETF (NYSEArca: ARKF). ARKF invests in equity securities of companies that ARK believes are shifting financial services and economic transactions to technology infrastructure platforms, ultimately revolutionizing financial services by creating simplicity and accessibility while driving down costs.
FINX seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Global Fintech Thematic Index. The underlying 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.
In blockchain include the Reality Shares Nasdaq NexGen Economy ETF (NASDAQ: BLCN). BLCN seeks long-term growth by tracking the investment returns of the Reality Shares Nasdaq Blockchain Economy Index, which is designed to measure the returns of companies that are committing material resources to development, researching, supporting, innovating or utilizing blockchain technology for their proprietary use or for use by other blockchain-focused companies.
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