Hamilton launches active fintech ETF on TSX

Jun 3rd, 2020 | By | Category: Equities

Hamilton Capital has launched a new actively managed ETF in Canada providing exposure to companies worldwide that are supporting the growth of financial services through technological innovation.

Hamilton launches active fintech ETF on TSX

The fund provides actively managed exposure to companies supporting the growth of financial services through technological innovation.

The Hamilton Financials Innovation ETF (HFT CN) has listed on the Toronto Stock Exchange and comes with a management fee of 0.75%.

Income is distributed to investors on a quarterly basis.

The ETF seeks long-term capital appreciation by investing in 30 to 60 securities of financial technology companies including payment processors and networks, asset managers, and exchanges.

The fund may also invest in companies supporting growth through lending including commercial and investment banks, insurance companies, and brokerages.

The ETF will primarily hold common stocks of companies, although it may also invest in preferred shares to a lesser extent.

When selecting individual constituents, the portfolio managers will focus on companies experiencing higher secular growth and benefitting from rising market share including firms with a higher return on equity, revenue growth, and earnings per share growth.

Currency hedging relative to the Canadian dollar will be implemented at the portfolio managers’ discretion.

The ETF’s top holdings currently consist of well-known names including Visa (4.9%), BlackRock (4.5%), Mastercard (4.5%), Nasdaq (4.0%), Paypal (4.0%), London Stock Exchange (3.7%), and Charles Schwab (3.5%).

Rob Wessel, Managing Partner at Hamilton ETFs, commented, “The technology-driven evolution of the financial sector is a powerful structural theme, offering significant long-term growth potential.

“We are excited to launch HFT and provide investors with access to a high-quality portfolio of companies that are benefitting from this theme and experiencing higher secular growth. HFT is well suited for long-term growth investors and those seeking portfolio diversification from limited overlap to more traditional sub-sectors like branch banking, insurance, and capital markets.”

Hamilton, which specializes in financial sector ETFs, recently proposed a shake-up of its entire product suite. Under the proposed changes, the firm’s existing five ETFs will terminate with assets merged into new lower-cost ETFs with slightly altered investment strategies. Shareholders are set to vote on the changes on 17 June.

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