Robeco has launched a new fund capitalizing on the increasing popularity of the financial technology sector, investing only in listed Fintech companies.
The fund, which will be available to both wholesale and retail investors, will concentrate on three types of Fintech companies that the investment house describes as ‘today’s winners’ that already have a competitive advantage in the marketplace.
The investment house will plough cash into companies that facilitate the digitization trend (called enablers) and challengers, which it claims could be future winners.
By spreading investments across these three types of company, the investment house claims the fund will be diversified to withstand risk.
The fund, which is described as 'benchmark agnostic', will be managed by Patrick Lemmens, who manages Robeco New World Financial Equities, and Jeroen van Oerle.
Mr Lemmens said: “To launch a fund that solely invests in the fintech space is very exciting.
"I strongly believe that digital finance will open the way to two billion people who currently don’t manage their financial affairs, and that online payment methods will become mainstream, while cash becomes the exception.
"With the launch of this fund, we enable investors to gain exposure to and profit from the trend of increasing digitization."
The fund is domiciled in Luxembourg.
Martin Bamford, financial adviser from Informed Choice, said though Artificial Intelligence and fintech was an interesting area, he warned his customers against “getting too specific” when investing in funds.
He said: "It could be a good fund for those who are knowledgeable about the sector and interested in it, but I wouldn’t be recommending it too much to all my clients."
Reflecting on the fact that the fund was described as “benchmark agnostic” he said it was an “interesting phrase” but that he felt that not being constrained by benchmarks was a good thing, even if it makes it difficult to compare with other funds.
He said: "If you’re paying for active fund management, you don’t want them to be too constrained."
Sam Blanning, head of research for Star House Financial Services, said: "Given the amount of money that firms like Nutmeg are haemmorhaging every year, I suggest that fintech is currently a sector best left to the venture capitalist funds.
"Robeco's fintech fund is in reality a global financials fund rather than a technology fund.
"Virtually all its holdings are very old-school financial firms like Axa, Citigroup, etc.
"Robeco's rationale is that it is investing in them because they're good at technology, and fair enough.
"But it is clearly a financials fund and not a technology fund. Financials is not a sector I would bet on currently, whether the underlying firms have nice mobile apps or not."