Amplify ETFs has launched a new fund in the US – the Amplify CrowdBureau Peer-to-Peer Lending & Crowdfunding ETF (LEND US) – which provides thematic exposure to the peer-to-peer (P2P) lending and equity crowdfunding ecosystem.

Christian Magoon, CEO of Amplify ETFs.

Crowdfunding is an umbrella term generally referring to the financing method, typically internet-based, by which capital is raised through the solicitation of small individual investments.

Contributions generally come from a large number of entities that lend money directly or indirectly to borrowers.

“Businesses and consumers seeking alternative sources for capital are finding more opportunity in P2P lending and equity crowdfunding platforms,” said Christian Magoon, CEO of Amplify ETFs. “As the development of these platforms advances and more borrowers seek respite from the inefficiencies found within the traditional banking system, we’re excited to offer growth-oriented investors an attractive way to capitalize on this shift in behavior.”

The fund tracks the CrowdBureau Peer-to-Peer Lending & Equity Crowdfunding Index, developed by CrowdBureau, an analytics firm covering 90 crowdfunding platforms globally. The index includes companies listed on US stock exchanges with minimum market capitalizations of $75 million.

Constituents are drawn from four business segments which are assigned specific weights in the index: Pure P2P lending and equity crowdfunding platforms make up the majority of the exposure with a segment weight of 80%, followed by providers of technology and software solutions to the P2P lending and crowdfunding industry (14%), social networking platforms (5%), and financial institutions with dedicated P2P lending and crowdfunding platforms (1%).

Constituents within each segment are weighted by market capitalization, although stocks that do not meet liquidity thresholds are capped at 0.5%. The index, which currently contains 35 constituents, reconstitutes and rebalances on a quarterly basis.

The fund has listed on NYSE Arca and comes with an expense ratio of 0.65%.