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Market Overview

Fast Growth For This Fintech ETF

Fast Growth For This Fintech ETF

As has been widely reported during the evolution of the exchange trade funds industry, some new ETFs burst out of the gates, displaying impressive asset-gathering acumen while other rookie ETFs scuffle for awhile.

Just last week, a new ETF debuted and, with some help, had $846 million in assets under management after its first day of trading, making it one of the most successful ETF launches on record. Though not to the tune of $846 million, some other new ETFs are capturing investors' attention and assets at impressive rates.

What Happened

The ARK Fintech Innovation ETF (NYSE: ARKF) debuted on Feb. 4 as the newest U.S.-listed fintech ETF. Underscoring investors increasing willingness to embrace new ETFs, ARKF is proving to be one of the most successful rookie ETFs to debut in recent months.

The actively managed ARKF entered Tuesday with $52.7 million in assets under management.

“In short order thanks to impressive investor demand and averaging more than 32,000 shares traded daily on average since the launch, the fund has already grown to be the fifth largest ETF in the ARK ETF family,” said Paul Weisbruch, head of ETF sales and trading at Dallas-based Esposito Securities, in a recent note.

Why It's Important

To be flirting with $53 million in assets under management after less than two months on the market is impressive for many ETFs, even more so for thematic ETFs. Consider this: there is a dedicated fintech ETF and a mobile payments, which are two and half years old and almost four years old, respectively. Combined, those funds have about $723 million in assets under management.

ARKF may not top $700 million in assets, but its fast start shows it's a credible competitor to its more established rivals. The new fintech ETF charges 0.75 percent per year, or $75 on a $10,000 investment. That's the same fee found on the mobile payments ETF and above the 0.68 percent charged by the established fintech ETF, both of which are passively managed funds.

“ARKF has clearly been well embraced in short order judging from its admirable asset level and daily trading volume despite being only a little over one month old,” said Weisbruch.

What's Next

ARKF came to market amid expectations of exponential for the broader fintech industry. Fintech companies are seen as disrupting everyday financial services, including insurance, investing, mobile payments and personal lending.

The new ETF's top 10 holdings include Square Inc. (NYSE: SQ), Apple Inc. (NASDAQ: AAPL) and PayPal Holdings, Inc. (NASDAQ: PYPL).

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