The uprise of the FinTech industry goes hand in hand with the high pace of innovation in the BIS & AI segment, providing the market with highly advanced and easy-to-use solutions for C2C, B2C & B2B customers.
Due to the FinTech2016 report published by KPMG, the best rated 100 FinTech companies were able to raise additional $14.6 bn within the last 12 months. China is the leading FinTech hub with four out of the five best companies being Chinese, although the highest transaction value is reached in the US. The worldwide transaction value is expected to grow at a CAGR of 20.9% per year from 2016 to 2020. Digital Payments are leading in the category "Total Transaction Volume" with around $2.15 bn in 2016, followed by Business & Personal Finance.
In the following I am going present you the performance of my demo portfolio that I have created in October in 2016 on Wikifolio. The aim was simply to track the major development of FinTech stocks, without the need for investing and risking your personal money on the stock market.
I tried to cover as many popular FinTech companies as possible. Unfortunately, this portfolio cannot be seen as a real representation of the FinTech market since most FinTech start-ups are privately owned and participating is only possible being a venture capitalists or investing into ICOs, when it comes to blockchain projects. Also, not all companies are covered by Wikifolio. Except for the French company Ingenico, all other stocks were from the US or Germany.
Best performer
The best performing stock is Square Inc., which focuses on point-of-sale software and services that help sellers make informed business decisions through the use of analytics and reporting. My position on Square Inc. grew by 91.4% with a weighting of nearly 7%
Second best performer
The second best company comes from Germany and is called Wirecard AG. Last year, they successfully launched N26 Bank, which was able to gain many customers due to low fees, high service and digital innovation. Here, the position grew by 42.5% with the highest weighting of 8.6%.
Worst performer
The worst performer was On Deck Capital Inc from the US. This company focuses on providing loans to small businesses. The loss on this position is roughly 12% with a weighting of nearly 5%.
Performance of portfolio
My FinTech wikifolio was steadily increasing with slight, but rather insignificant pullbacks. So the performance since the creation (last 8 months) was an increase of 9.7% but a maximum loss of 4.5%. The positive development can be mainly contributed to the overall positive development of stock markets in the US and Germany. FinTech stocks remain risky and volatile and can lead to a total loss of investment. However, there are many interesting and promising companies, that definitely deserve being mentioned. Also, most importantly is always to diversify and to invest only for a long-term. That way, even volatile FinTech stocks can be considered including into the own portfolio.
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Sources
Picture Nr.1 & Nr.2 “Screenshot”. Wikifolio Financial Technologies AG 2011-2017, June 2017 Web. URL https://www.wikifolio.com/en/int/my-wikifolios (13.06.2017)
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