AltFi, ETF Stream’s sister publication, has partnered with index provider BITA to launch a global fintech index.
The AltFi Fintech index offers exposure to a basket of approximately 60 ‘pure-play’ fintech companies.
To be included in the index, companies must have an AltFi revenue-based fintech exposure score of at least 50%, a market cap of $100m and a three-month average daily trading volume of $300,000.
AltFi’s fintech exposure score is calculated through analysis of a company’s business lines via the collection of publicly available data such as regulatory filings and quarterly earnings reports.
Companies are weighted by market cap with each constituent capped at 9% while the cumulative weight of all constituents above 4.5% cannot exceed 40%.
The index has returned 14.3% so far this year versus 10.7% for the MSCI World, as at 29 September.
The move makes AltFi the first specialist financial publisher to launch a dedicated fintech industry benchmark.
Daniel Lanyon, editorial director at AltFi, said: “The fintech sector is at a pivotal moment of change. Valuations are bouncing back in both public and private markets but only partly owing to an improving macroeconomic picture.
“Much more interesting is the stellar performance of a number of publicly listed fintech companies such as Nubank demonstrating the explosive power of financial innovation.”
Sam Ridley, managing director at AltFi, said: “The launch of the index will bring the most definitive benchmark available yet to the fintech ecosystem, bringing clarity to investors and companies.
“It will help track the performance of listed fintech companies, especially important as the IPO market begins to open in the coming years.”
Victor Hugo Gomez, CEO of BITA, added: “Leveraging both firms’ research and expertise, the index showcases the growth of global fintech firms and serves as a benchmark for investors and the industry at large."
BITA is a portfolio company of ETFS Capital, an investor in AltFi and ETF Stream