Europe’s first fintech ETF, and an IFISA roundup

published 31 March 2017

Source, the London-based provider of exchange-traded funds (ETF), has announced what it claims is Europe's first fintech ETF: the Source KBW Nasdaq Fintech UCITS ETF (LSE: FTEK), which will track the KBW Nasdaq Financial Technology index. This tracks 50 US-listed companies "that use technology to deliver financial products and services", with the ETF giving equal weighting to each. But don't expect this fund to be investing in hot new start-ups that are aiming to change the world. These tend to be unlisted companies backed by private equity or venture capitalists. The index instead includes many major players in traditional financial services, including Visa, Equifax, American Express and Thomson Reuters.

In the news this week

There's less than a week to go until the end of the tax year, so if you haven't used up your individual savings account (Isa) allowance, you'll have to act fast. The good news for investors hoping to take advantage of the higher rates available from P2P loans and other alternative finance sectors is that more innovative finance Isas (IF Isas) are launching at last.

In the last two weeks, six new IF Isas have become available. CapitalRise lets investors buy into central London property, while Basset & Gold offers a mini-bond that pays over 6%, fixed for three years. HNW Lending, which offers loans to wealthy individuals secured on assets such as property, classic cars or fine wine, promises returns of between 7% and 15%. There is a minimum investment of £5,000. Property Crowd hopes to return between 7% and 10% by investing in "institutional-grade property-backed loans" to businesses. And Downing offers "crowd bonds" loans to businesses that are secured on the borrower's assets that offer between 4% and 7% per annum. Finally, the UK Bond Network's IF Isa, which has a minimum investment of £5,000, buys corporate bonds that promise returns of between 7% and 12%.

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Remember that higher returns usually mean higher risk and IF Isas are no exception. All are riskier than a bank deposit and so are not a direct substitute for cash in a savings account.

Ben studied modern languages at London University's Queen Mary College. After dabbling unhappily in local government finance for a while, he went to work for The Scotsman newspaper in Edinburgh. The launch of the paper's website, scotsman.com, in the early years of the dotcom craze, saw Ben move online to manage the Business and Motors channels before becoming deputy editor with responsibility for all aspects of online production for The Scotsman, Scotland on Sunday and the Edinburgh Evening News websites, along with the papers' Edinburgh Festivals website.

Ben joined MoneyWeek as website editor in 2008, just as the Great Financial Crisis was brewing. He has written extensively for the website and magazine, with a particular emphasis on alternative finance and fintech, including blockchain and bitcoin. As an early adopter of bitcoin, Ben bought when the price was under $200, but went on to spend it all on foolish fripperies.