Although cryptocurrency and blockchain are the buzz words in the fintech sector, the Robeco Global FinTech Equities strategy does not invest in the digital asset and is highly selective over its blockchain exposure.
Launched in 2017, the Robeco Global FinTech Equities is managed by lead portfolio manager Patrick Lemmens.
The strategy invests in stocks in developed and emerging countries across the world which benefit from the increasing digitisation of the financial sector.
Lemmens said cryptocurrencies are not regulated and the Robeco Global FinTech Equities doesn’t invest in non-regulated stuffs.
He said the strategy focuses on companies that are only listed on the stock exchange as they have higher liquidity and are less risky.
‘We do not invest in crypto. We also do not invest in companies which are blockchain.com or companies that have turned into blockchain companies.
‘Even if cryptocurrencies might eventually be regulated and listed, we will still have to figure out if these are currencies or companies, as well as depends on what kinds of cryptocurrencies they are,’ he told Citywire Asia.
Meanwhile, the executive doesn’t also believe that Kodak, an imaging business which has joined the blockchain hype and turned into blockchain companies, makes a lot of sense for its investments.
‘That’s really hype and we want to be not a hype investment,’ he said.
While there are a couple of companies that really provide fintech solutions for blockchain for banks, insurance companies, exchanges, asset managers, there aren’t many investment opportunities yet in this relatively young emerging industry, Lemmens added.
Robeco, however, is happy to wait for more investment opportunities in the blockchain space. The group is also looking at every initial public offering (IPO) of new fintech companies.
Although it’s still mostly venture capitalists and other private equity companies that currently invest in fintech companies, fintech is definitely investible from a listed perspective, with an average market capitalisation of more than $10 billion.
Lemmens said the the Robeco Global FinTech Equities does not invest in large cap tech stocks such as Alibaba and Tencent as it only invests in companies that derive at least 25% of their profits or revenues from fintech or the digitisation of the financial sector.
Since its launch, the strategy has seen a performance of 15.77% in the first six months.