Summary The Global X FinTech ETF (FINX) is rated Hold due to muted near-term growth prospects and a portfolio skewed toward mature fintech names. FINX's diversified holdings dilute narrative-driven upside, with legacy payments, SaaS, crypto, and international fintech each contributing distinct cyclical and macro sensitivities. Performance has lagged growth alternatives like ARKF and SPY over five years, reflecting FINX's lower exposure to disruptive or momentum-driven fintech segments. FINX is best used as a fintech sleeve in a broader portfolio, with timing and macro cycles critical for capital deployment; near-term upside remains limited. The Global X FinTech ETF ( FINX ) has not shown the best of performance numbers in the past few years now and the way it is set up, the scope for growth is limited in the near term. Despite the growth positioning, FINX's current passive portfolio appears invested in mature fintech players, where narrative alpha is missing and cyclical and macro factors dominate returns. As a result, FINX's position is a Hold. I don't see much downside risk, but returns will continue to be muted. It can be considered as a diversified fintech sleeve in a larger portfolio, but does not make a strong case for its primary growth objective. Dissecting the Portfolio The methodology behind the portfolio selection and weighting is fairly simple. It defines fintech as technology-driven financial services which are disrupting existing business models in the financial services and banking sectors Companies listed in developed markets and those that can be classified as belonging to either of the segments outlined as per the methodology snippet below qualify. This qualification is on the basis of majority revenues originating from the segments, outline these segments as a growth area, or with a primary objective that aligns with these segments. Segments considered Fintech - FINX (FINX Methodology Summary Document) After applying a screen around free float percentage, market cap and liquidity, the portfolio is weighted by market cap. To prevent concentration, individual stock weights are capped to 6%. Further, the total weight of all constituents with over 5% weight is capped at 40% and remaining stocks have a lower cap of 4.5%. The focus on concentration implies that the top 10 holdings (in a portfolio of ~65 holdings) contribute around half the weight of the overall portfolio. That is not a very heavy concentration. Particularly the top weight cap at 6% prevents extreme concentrations at the very top. Top 10 Holdings - FINX (Seeking Alpha) I downloaded the full holdings and bucketed the holdings thematically. Around 15% of the portfolio appears to be crypto or blockchain plays, like Coinbase Global, Inc. (COIN), Circle Internet Group, Inc. (CRCL), MARA Holdinga, Inc. (MARA), Riot Platforms, Inc. (RIOT), and the like. This bucket has its own cycles (like in 2023-24 and for large parts of 2025, before a recent crash) due to bitcoin and crypto volatility. FINX dilutes the impact by investing in miners (typically low ROIC) and mid-tier crypto infrastructure beyond Coinbase. This means FINX's blockchain plays do not reap the extreme rallies and cyclicality of a portfolio that invests heavily in Coinbase and other purer crypto beta. Around a third of the portfolio is legacy payments and financial infrastructure companies like PayPal Holdings, Inc. (PYPL), Fidelity National Information Services (FIS) and Adyen N.V. (ADYEY). These mature fintech companies are mostly already digitized. So they are low on narratives and multiple expansion and not explosive growth levers. On top of this, this segment is higher on cyclicality and macro sensitivity. This segment has not collapsed but are far removed from disruptive names like Robinhood Markets, Inc. (HOOD) (there's no Robinhood holding in FINX). Consumer credit and lending comprises around 13% of the portfolio - stocks like Affirm Holdings, Inc. (AFRM) and Upstart Holdings, Inc. (UPST). This bucket had to live through rate shocks and credit normalization cycles and still remain sensitive to the macro environment. While there is promise in this segment when the environment is conducive, investments here can remain dead money for years. Around 17% of the portfolio is in SaaS fintech companies like Intuit and Toast. This is a promising segment and growth here has not been disappointing. Intuit itself has almost doubled from the 2023 lows and Toast has grown even more (depending on entry points). This segment's valuations are high, but growth prospects (at least in the past couple of years) are still relatively explosive. International fintech names like HUB24 Limited and StoneCo Ltd. (STNE) come with FX drags, lower valuation rerating possibilities and regulatory risks. This accounts for ~10% of the portfolio and provides geographical diversification. The final ~8% of the portfolio is invested in trading and brokerage aligned firms, like Webull Corporation (BULL). This is cyclical in terms of trading activity, though correlation with market volatility or crashes are somewhat lower. However, the upside here too has not been explosive across the board. Reflection in Performance The result of the portfolio mix discussed is reflected in performance. A total return performance compared to another mature diversified fintech ETF, iShares FinTech Active ETF (BPAY), shows a chart that is close to call. There are periods of outperformance in FINX, but overall nothing structurally different other than the fact that BPAY is an active agile strategy. Data by YCharts The total returns compared to other growth alternatives are more telling though, particularly in the past one year. This is directly attributable to a mature payments and infra bias in FINX compared to ARK Blockchain & Fintech Innovation ETF (ARKF) which bets bigger on narrative driven convex opportunities (also higher risks). Compared to SPDR® S&P 500® ETF (SPY), the AI narrative is less explosive. Data by YCharts However, that is not to say that FINX has always been a laggard in growth terms. Depending on how far we zoom out, FINX has sometimes done better than both the alternatives discussed. The 5-year and 3-year charts show completely different pictures. In the past 3 year window, FINX has often outrun SPY. Data by YCharts Data by YCharts While empirical performance does not paint a consistent picture, it drives home the important point of fintech cyclicality aspect compared to a SPY like broader exposure. It becomes all the more essential therefore to time entries. Unlike SPY, both FINX and ARKF become Buys in specific regimes, not always. SPY also needs timing depending on market conditions, but less so if the investment horizon is long enough. For instance, while SPY has delivered ~94% returns in the past 5 years, FINX is down by 32% from an investment made 5 years ago. SPY has had the benefit of the secular AI tailwinds, true, but 5-year investments have generally not lagged by as much historically (unless black swan events). Data by YCharts Looking Ahead Since timing is everything in FINX, the outlook for the portfolio becomes important. The crypto bucket is hard to call, but I see high growth potential due to supportive legislations encouraging greater adoption going ahead. Any tailwind here will help FINX (but also helps ARKF styled aggressive plays). This bucket will also remain volatile for a while. I am neutral to mildly positive on legacy payment companies from a growth perspective. I expect the next story here being that around margin stability than rerating. This segment could help absorb volatility in other high growth buckets, but should not be viewed as the core driver of future outperformance. Credit exposed holdings in FINX are likely to have selective upside till the macro credit concerns normalize and underwriting fears are muted. Vertical SaaS is looking promising. However, AI in fintech is generally an efficiency or table stakes engagement lever, not a material revenue generator on its own. Valuations could mean much of the upside here comes from actual growth and execution. International fintech needs USD weakness to thrive. There is good optionality here, but cannot be called bankable for future portfolio returns. In fact regulatory risks will continue to weigh on this segment. Overall, given the broader macro situation of still higher rates for longer and credit stress concerns, only investors who want to start accumulating at the lows can consider deploying periodic capital in FINX. As such, I rate it a Hold till macro recovery is in sight. That could be be at least a few quarters away. FINX is a diversified fintech and should be played depending on the macro cycles. It is not a disruption ETF, nor a momentum ETF (like ARKF). That reduces risks compared to ARKF, but its primary growth promise is likely to be muted in the near term.
