Critically, the migration from cash and cheque to electronic payment is a multi-year trend, which is still far from mature. While this is a seemingly consensual proposition, the market is underestimating the sustainability of this structural theme.
Any view on including financial stocks should not be predicated on forecasts of the monetary environment or economic growth, though such matters should of course be taken into account. But investors should find exposure to well-run companies aligned with long-term trends, and thus able to compound value irrespective of the business cycle.
Tom Walker is a portfolio manager for the Martin Currie Global Portfolio Trust
Key figures
£2.5bn - Combined assets in specialist financials equity funds in the IA sectors
18.2% - Exposure of the MSCI World to financial stocks, the largest sector
0.76 - Five year correlation between the MSCI World and MSCI World/Banks indices
0.89 - Five year correlation between the MSCI World and MSCI World/Insurance indices
