atonrâ fintech certificate AWS
ATONRÂ FINTECH CERTIFICATE The AtonRâ Fintech Index is a long-only, USD-based, actively managed total return index. The pace of innovation in financial technology (Fintech) has been accelerating lately with notably the emergence of mobile payments. This is just the beginning of a secular trend as technology and digitalisation are likely to reshape the financial industry with applications ranging from robo-advisers, P2P lending and money remittances to blockchain. Banks and insurers will have no choice but to invest heavily as Fintech is expected to spark major operating efficiencies through increased automation and is also likely to lift the financial industry's revenue outlook through enhanced customer experience and engagement. The investment universe is naturally composed of Internet and mobile financial platforms, payment networks and processors and hardware and software vendors (cybersecurity, biometrics, chips). It can also include more traditional
Main Features Asset Class Inception Date Currency Type of Return ISIN Issuer Issue Price Last Price Sharpe Ratio Correlation Beta Benchmark
Equity 7-Jun-17 USD Total Return XS1365787230 NATIXIS 100.0 117.4
MSCI World Net Return
MONTHLY RETURNS (%) JAN
FEB
MAR
APR
MAY
2017
HIGHS/LOWS
JUN -1.4%
JUL AUG 6.0% 2.1%
Price
Date
All Time High
122.4
24-Nov-17
All Time Low
98.1
4-Jul-17
SEP OCT 3.1% 5.8%
NOV 0.9%
DEC
ANNUAL 17.4%
124 122 120 118 116 114 112 110 108 106 104 102 100 98
November 2017 highlights The AtonRâ Fintech certificate gained 0.9% in November, underperforming the MSCI World Net Return by 1.3%. Launch-to-date (June 7, 2017 launch), it outperforms its reference index by 8.8%. We often argue that many US and European tech and fintech companies will leverage their online and mobile payment services to expand into digital banking services, following in the footsteps of China-based Ant Financial (Alibaba) and Tencent. This move has already started at the two US fintech leaders, PayPal and Square, and the results are quite impressive. While Square’s core payment business grew 33% in the latest quarter (an acceleration vs. the +26% reported in Q2), its new businesses rocketed 84% to USD65m and boasted strong margins. These new businesses, which encompass Square Capital (loans to small businesses), Square Payroll (payroll processing), Square Invoices and Square Gift Cards among others, are still in the early stages and have significant room to grow, suggesting that the company can keep growing above 30% for an extended period of time. And new financial service offerings are likely to pop up on a regular basis as illustrated by PayPal’s expansion into investment services through the integration of the micro-investing app Acorns into its platform. PayPal users will have the opportunity to have their purchase transactions rounded up to the nearest whole dollar amount with the extra bit (call it spare change) being invested in Acorns ETF portfolios. In all, both PayPal and Square are definitely on track to become full digital banks. While this points to secular growth for these companies, this can also increase their risk profile and funding needs considering that some businesses (online lending notably) can be prone to losses and are capital intensive. Against this backdrop, we view PayPal’s disposal of its US consumer credit portfolio to Synchrony Financial for USD6bn as a highly encouraging sign for the fintech industry. We are pretty much convinced that most fintech players will adopt an asset-light model and will partner with legacy financial institutions for capital-intensive activities. This kind of partnership could even extend to the commercial relationship with customers, with Chinese fintech companies showing the way as always. In recent weeks, Industrial & Commercial Bank of China announced it was teaming up with the finance unit of Internet retailer JD.com to offer digital banking services while Baidu and China Citic Bank launched an online banking joint venture. We wouldn’t be surprised to see similar moves from US players in the future.
AtonRâ Partners SA 12 rue Pierre Fatio - 1204 Geneva - Switzerland - +41 22 310 15 01 - http://www.atonra.ch
ATONRÂ FINTECH CERTIFICATE Top 3 Performers
Worst 3 Performers
Name
Name
LENDINGTREE INC TENCENT HOLDINGS LTD-UNS ADR SQUARE INC - A
LENDINGCLUB CORP ENVESTNET INC XERO LTD
Top 3 Holdings Name SQUARE INC - A PAYPAL HOLDINGS INC LENDINGTREE INC
Geographical Breakdown
Currency exposure
Asia Pacific
5.3% 2.1% 2.8% 9.5%
4.9% 14.8% Europe
80.3%
US
80.3%
Asset Allocation
CHF AUD
Equities
JPY
Cash
EUR USD
98.8%
Important Information All net estimated returns are based on unaudited, internally prepared assessments and have not been independently verified. The net estimated returns are subject to adjustments as a result of changes or delays in AtonRâ's calculations of the profit and loss of the portfolio. Any such adjustments could have a material impact on the estimated net returns of the AtonRâ Basket. Net returns are reported after deduction of AtonRâ's management and/or performance fees. Past performance is not indicative or a guarantee of future results. Investment losses may occur, and investors could lose some or all of their investment. Although AtonRâ Partners SA believes that the information provided in this document is based on reliable sources, it cannot assume responsibility for the quality, correctness, timeliness or completeness of the information contained in this report. The information contained in these publications is sent to you by way of information and cannot be divulged to a third party without the prior consent of AtonRâ Partners. It cannot be considered under any circumstances as an offer to sell, or a solicitation of any offer to buy financial instruments. Any indices cited herein are provided only as examples of general market performance and no index is directly comparable to the past or future performance of the Certificate. It should not be assumed that the Certificate will invest in any specific securities that comprise any index, nor should it be understood to mean that there is a correlation between the Certificate’s returns and any index returns. Any material provided to you is intended only for discussion purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any security and should not be relied upon by you in evaluating the merits of investing in any securities.
AtonRâ Partners SA 12 rue Pierre Fatio - 1204 Geneva - Switzerland - +41 22 310 15 01 - http://www.atonra.ch
Main Features Asset Class Inception Date Currency Type of Return ISIN Issuer Issue Price Last Price Sharpe Ratio Correlation Beta Benchmark
Equity 7-Jun-17 USD Total Return XS1365787230 NATIXIS 100.0 117.4
MSCI World Net Return
MONTHLY RETURNS (%) JAN
FEB
MAR
APR
MAY
2017
HIGHS/LOWS
JUN -1.4%
JUL AUG 6.0% 2.1%
Price
Date
All Time High
122.4
24-Nov-17
All Time Low
98.1
4-Jul-17
SEP OCT 3.1% 5.8%
NOV 0.9%
DEC
ANNUAL 17.4%
124 122 120 118 116 114 112 110 108 106 104 102 100 98
November 2017 highlights The AtonRâ Fintech certificate gained 0.9% in November, underperforming the MSCI World Net Return by 1.3%. Launch-to-date (June 7, 2017 launch), it outperforms its reference index by 8.8%. We often argue that many US and European tech and fintech companies will leverage their online and mobile payment services to expand into digital banking services, following in the footsteps of China-based Ant Financial (Alibaba) and Tencent. This move has already started at the two US fintech leaders, PayPal and Square, and the results are quite impressive. While Square’s core payment business grew 33% in the latest quarter (an acceleration vs. the +26% reported in Q2), its new businesses rocketed 84% to USD65m and boasted strong margins. These new businesses, which encompass Square Capital (loans to small businesses), Square Payroll (payroll processing), Square Invoices and Square Gift Cards among others, are still in the early stages and have significant room to grow, suggesting that the company can keep growing above 30% for an extended period of time. And new financial service offerings are likely to pop up on a regular basis as illustrated by PayPal’s expansion into investment services through the integration of the micro-investing app Acorns into its platform. PayPal users will have the opportunity to have their purchase transactions rounded up to the nearest whole dollar amount with the extra bit (call it spare change) being invested in Acorns ETF portfolios. In all, both PayPal and Square are definitely on track to become full digital banks. While this points to secular growth for these companies, this can also increase their risk profile and funding needs considering that some businesses (online lending notably) can be prone to losses and are capital intensive. Against this backdrop, we view PayPal’s disposal of its US consumer credit portfolio to Synchrony Financial for USD6bn as a highly encouraging sign for the fintech industry. We are pretty much convinced that most fintech players will adopt an asset-light model and will partner with legacy financial institutions for capital-intensive activities. This kind of partnership could even extend to the commercial relationship with customers, with Chinese fintech companies showing the way as always. In recent weeks, Industrial & Commercial Bank of China announced it was teaming up with the finance unit of Internet retailer JD.com to offer digital banking services while Baidu and China Citic Bank launched an online banking joint venture. We wouldn’t be surprised to see similar moves from US players in the future.
AtonRâ Partners SA 12 rue Pierre Fatio - 1204 Geneva - Switzerland - +41 22 310 15 01 - http://www.atonra.ch
ATONRÂ FINTECH CERTIFICATE Top 3 Performers
Worst 3 Performers
Name
Name
LENDINGTREE INC TENCENT HOLDINGS LTD-UNS ADR SQUARE INC - A
LENDINGCLUB CORP ENVESTNET INC XERO LTD
Top 3 Holdings Name SQUARE INC - A PAYPAL HOLDINGS INC LENDINGTREE INC
Geographical Breakdown
Currency exposure
Asia Pacific
5.3% 2.1% 2.8% 9.5%
4.9% 14.8% Europe
80.3%
US
80.3%
Asset Allocation
CHF AUD
Equities
JPY
Cash
EUR USD
98.8%
Important Information All net estimated returns are based on unaudited, internally prepared assessments and have not been independently verified. The net estimated returns are subject to adjustments as a result of changes or delays in AtonRâ's calculations of the profit and loss of the portfolio. Any such adjustments could have a material impact on the estimated net returns of the AtonRâ Basket. Net returns are reported after deduction of AtonRâ's management and/or performance fees. Past performance is not indicative or a guarantee of future results. Investment losses may occur, and investors could lose some or all of their investment. Although AtonRâ Partners SA believes that the information provided in this document is based on reliable sources, it cannot assume responsibility for the quality, correctness, timeliness or completeness of the information contained in this report. The information contained in these publications is sent to you by way of information and cannot be divulged to a third party without the prior consent of AtonRâ Partners. It cannot be considered under any circumstances as an offer to sell, or a solicitation of any offer to buy financial instruments. Any indices cited herein are provided only as examples of general market performance and no index is directly comparable to the past or future performance of the Certificate. It should not be assumed that the Certificate will invest in any specific securities that comprise any index, nor should it be understood to mean that there is a correlation between the Certificate’s returns and any index returns. Any material provided to you is intended only for discussion purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any security and should not be relied upon by you in evaluating the merits of investing in any securities.
AtonRâ Partners SA 12 rue Pierre Fatio - 1204 Geneva - Switzerland - +41 22 310 15 01 - http://www.atonra.ch
