atonrâ fintech certificate
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 100.0 116.4
MSCI World Net Return
MONTHLY RETURNS (%) JAN
FEB
MAR
APR
MAY
2017
HIGHS/LOWS
JUN -1.4%
JUL AUG 6.0% 2.1%
Date
116.4
31-Oct-17
All Time Low
98.1
4-Jul-17
NOV
DEC
ANNUAL 16.4%
118 116 114 112 110 108 106 104 102 100 98 07-06-17 14-06-17 21-06-17 28-06-17 05-07-17 12-07-17 19-07-17 26-07-17 02-08-17 09-08-17 16-08-17 23-08-17 30-08-17 06-09-17 13-09-17 20-09-17 27-09-17 04-10-17 11-10-17 18-10-17 25-10-17
Price
All Time High
SEP OCT 3.1% 5.8%
October 2017 highlights The AtonRâ Fintech certificate gained 5.8% in October, outperforming the MSCI World Net Return by 3.9%. Launch-to-date (June 7, 2017 launch), it outperforms its reference index by 10%. The Chinese fintech industry was in the spotlight last month as two companies went public with a bang: Qudian, an online consumer lender, and ZhongAn, a property & casualty online insurance company. The success of these IPOs clearly paves the way for the listing of some of the Chinese fintech leaders, including Lufax (peer-to-peer lending) and Ant Financial (Alibaba’s financial services arm whose valuation is estimated around $60-70bn). If confirmed, such major IPOs would give huge M&A firepower to companies that seek to consolidate a very fragmented fintech industry and to expand their financial services offering, both at home and abroad (as a reminder, Ant Financial is in the process of acquiring US-based MoneyGram). In the end, this could be a positive for the valuation of fintech assets across the board. Talking about M&A, US fintech unicorn SoFi (valued at $4bn in its latest funding round) could clearly be a target. The company, which started offering student loans and has since diversified into mortgages and consumer loans, just lost its CEO following lawsuits claiming a sexual harassment and toxic workplace culture at the company and dropped its plans to get a banking license. In our view, PayPal could step in and try to acquire SoFi considering that the company’s nascent lending business only covers small and medium companies and will have at some point to serve consumers. We believe that PayPal is closer to becoming a full digital bank than any other fintech and to get there, the company will have to offer payment and lending to both consumers and merchants/companies. Aside from these potential strategic moves in the fintech industry, the current spending trends seem to be higher than ever and as we often say, investing in the makers of picks and shovels of any technology revolution can be as rewarding as investing in the technology disruptors. In the fintech space, the picks and shovels are financial software and IT services. While leading IT services firm Accenture reported in its latest quarter a growth acceleration in its Financials vertical (to +9% from +6%), financial software vendor Temenos recorded Q3 licenses well above expectations (+13%) and raised its license growth guidance to 18% from 12% as it wins a large number of new clients and contracts. We have a significant exposure in the portfolio to financial software firms as we see them in a sweet spot: whoever wins the fintech revolution, software vendors will benefit as they sell their products to both fintech pure players and legacy financial institutions seeking to accelerate their digital shift.
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
SQUARE INC - A PAYPAL HOLDINGS INC AMAZON.COM INC
BLACKHAWK NETWORK HOLDINGS I LENDINGCLUB CORP NETS A/S
Top 3 Holdings Name SQUARE INC - A PAYPAL HOLDINGS INC LENDINGTREE INC
Geographical Breakdown
Currency exposure
Asia Pacific
5.1% 2.5% 2.0% 8.8%
4.5% 13.9% Europe
81.6%
US
81.6%
Asset Allocation
CHF AUD
Equities
JPY
Cash
EUR USD
98.4%
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 100.0 116.4
MSCI World Net Return
MONTHLY RETURNS (%) JAN
FEB
MAR
APR
MAY
2017
HIGHS/LOWS
JUN -1.4%
JUL AUG 6.0% 2.1%
Date
116.4
31-Oct-17
All Time Low
98.1
4-Jul-17
NOV
DEC
ANNUAL 16.4%
118 116 114 112 110 108 106 104 102 100 98 07-06-17 14-06-17 21-06-17 28-06-17 05-07-17 12-07-17 19-07-17 26-07-17 02-08-17 09-08-17 16-08-17 23-08-17 30-08-17 06-09-17 13-09-17 20-09-17 27-09-17 04-10-17 11-10-17 18-10-17 25-10-17
Price
All Time High
SEP OCT 3.1% 5.8%
October 2017 highlights The AtonRâ Fintech certificate gained 5.8% in October, outperforming the MSCI World Net Return by 3.9%. Launch-to-date (June 7, 2017 launch), it outperforms its reference index by 10%. The Chinese fintech industry was in the spotlight last month as two companies went public with a bang: Qudian, an online consumer lender, and ZhongAn, a property & casualty online insurance company. The success of these IPOs clearly paves the way for the listing of some of the Chinese fintech leaders, including Lufax (peer-to-peer lending) and Ant Financial (Alibaba’s financial services arm whose valuation is estimated around $60-70bn). If confirmed, such major IPOs would give huge M&A firepower to companies that seek to consolidate a very fragmented fintech industry and to expand their financial services offering, both at home and abroad (as a reminder, Ant Financial is in the process of acquiring US-based MoneyGram). In the end, this could be a positive for the valuation of fintech assets across the board. Talking about M&A, US fintech unicorn SoFi (valued at $4bn in its latest funding round) could clearly be a target. The company, which started offering student loans and has since diversified into mortgages and consumer loans, just lost its CEO following lawsuits claiming a sexual harassment and toxic workplace culture at the company and dropped its plans to get a banking license. In our view, PayPal could step in and try to acquire SoFi considering that the company’s nascent lending business only covers small and medium companies and will have at some point to serve consumers. We believe that PayPal is closer to becoming a full digital bank than any other fintech and to get there, the company will have to offer payment and lending to both consumers and merchants/companies. Aside from these potential strategic moves in the fintech industry, the current spending trends seem to be higher than ever and as we often say, investing in the makers of picks and shovels of any technology revolution can be as rewarding as investing in the technology disruptors. In the fintech space, the picks and shovels are financial software and IT services. While leading IT services firm Accenture reported in its latest quarter a growth acceleration in its Financials vertical (to +9% from +6%), financial software vendor Temenos recorded Q3 licenses well above expectations (+13%) and raised its license growth guidance to 18% from 12% as it wins a large number of new clients and contracts. We have a significant exposure in the portfolio to financial software firms as we see them in a sweet spot: whoever wins the fintech revolution, software vendors will benefit as they sell their products to both fintech pure players and legacy financial institutions seeking to accelerate their digital shift.
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
SQUARE INC - A PAYPAL HOLDINGS INC AMAZON.COM INC
BLACKHAWK NETWORK HOLDINGS I LENDINGCLUB CORP NETS A/S
Top 3 Holdings Name SQUARE INC - A PAYPAL HOLDINGS INC LENDINGTREE INC
Geographical Breakdown
Currency exposure
Asia Pacific
5.1% 2.5% 2.0% 8.8%
4.5% 13.9% Europe
81.6%
US
81.6%
Asset Allocation
CHF AUD
Equities
JPY
Cash
EUR USD
98.4%
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
