Warning: members of the public are being contacted by people claiming to work for AXA Investment Managers UK Limited.  Find out more information and what to do by clicking here.

FinTech Strategy: Investors’ interest in Fintech close to an all-time high

  • 08 February 2021 (3 min read)

Key points

  • Contradictory health and economic developments contributed to roil investors’ short‑term confidence
  • Markets increasingly expect growth and inflation to make a comeback at some point in the future
  • Regulatory scrutiny is increasing, both in China, in Europe and in the US, we believe this to be a sign that fintech is getting really mainstream

What’s happening?

After a solid start during the first days of the year, global equity markets ended January slightly down on the back of a sharp rise in volatility triggered by a retail-driven short squeeze of hedge fund positions. Contradictory health and economic developments contributed to roil investors’ short-term confidence. On the negative side, the IMF downgraded 2021 growth expectations again. Several countries announced tighter Covid-19 restrictions on the face of apparently more aggressive variants. A number of vaccine delivery delays were also announced due to manufacturing issues. On the positive side, the new White House administration announced a massive $1.9tn support plan while vaccination campaigns started in a large number of countries and are still ramping up rapidly.

Rate-wise, the US yield curve continued steepen over the month, indicating that markets increasingly expect growth and inflation to make a comeback at some point in the future.

Portfolio positioning and performance

The FinTech strategy under-performed its performance benchmark in January as semi-conductor stocks as well as Microsoft and Apple, which are part of the chosen benchmark but not part of the fintech universe, performed strongly.

Top performers included Chinese fintech stocks Lufax, ZhongAn, Tencent and Alibaba which all posted strong rebounds as the impact of increased regulatory scrutiny gradually got better understood by the market. Network International, a unique play on the growth of digital payments in Africa, also performed strongly.

On the negative front, Global Payments, FIS, StoneCo, Worldline and Fiserv, all active in the fast growing digital payment area but with a degree of exposure to travel or brick-and -mortar payment activity levels - and therefore impacted by the recent round of increased Covid19 restrictions. The medium-term outlook for these businesses remains excellent.*

In January we did not make any significant changes to the strategy. 

* Stock shown for illustrative purposes only and should not be considered as advice or a recommendation for an investment strategy.


Covid19 proved to be a significant tailwind for the fintech universe and investor interest in the space is close to an all-time high. Regulatory scrutiny is increasing, both in China, in Europe and in the US but we strongly believe this to be an encouraging sign that fintech is maturing into a significant economic activity. After a year during which stock performance was in a large part driven by long-term “blue-sky” hopes, we expect the differences between the strongest business models and some less sustainable concept stocks to become more apparent in 2021. In the shorter-term, the results’ season has started strongly with most companies beating already high expectations.

Overall, we believe that the Fintech strategy is well positioned for the post Covid19 world, with a strong focus on structurally growing businesses with solid balance sheets. The Fintech businesses the strategy invests in are through-the-cycle growers. They will undoubtedly represent a larger part of the global economy in 5 years, even more so in 10 years.

No assurance can be given that the FinTech Strategy will be successful. Investors can lose some or all of their capital invested. The FinTech strategy is subject to risks including Equity; Emerging Markets; Global Investments; Investments in small and/or micro capitalisation universe; Investments in specific sectors or asset classes; ESG.

Have our latest insights delivered straight to your inbox

Subscribe to updates.

    Not for Retail distribution

    This document is intended exclusively for Professional, Institutional, Qualified or Wholesale Clients / Investors only, as defined by applicable local laws and regulation. Circulation must be restricted accordingly.

    This promotional communication does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities.

    Due to its simplification, this document is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee that forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this document is provided based on our state of knowledge at the time of creation of this document. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.

    Before making an investment, investors should read the relevant Prospectus and the Key Investor Information Document / scheme documents, which provide full product details including investment charges and risks. The information contained herein is not a substitute for those documents or for professional external advice.

    The products or strategies discussed in this document may not be registered nor available in your jurisdiction. Please check the countries of registration with the asset manager, or on the web site https://www.axa-im.com/en/registration-map, where a fund registration map is available. In particular units of the funds may not be offered, sold or delivered to U.S. Persons within the meaning of Regulation S of the U.S. Securities Act of 1933. The tax treatment relating to the holding, acquisition or disposal of shares or units in the fund depends on each investor’s tax status or treatment and may be subject to change. Any potential investor is strongly encouraged to seek advice from its own tax advisors.

    Past performance is not a guide to current or future performance, and any performance or return data displayed does not take into account commissions and costs incurred when issuing or redeeming units. The value of investments, and the income from them, can fall as well as rise and investors may not get back the amount originally invested. Exchange-rate fluctuations may also affect the value of their investment. Due to this and the initial charge that is usually made, an investment is not usually suitable as a short term holding.

    Risk Warning

    The value of investments, and the income from them, can fall as well as rise and investors may not get back the amount originally invested. 

    Are you an IFA or other Professional Investor ?

    Are you a financial advisor, institutional, or other professional investor?

    This section is for professional investors only. You need to confirm that you have the required investment knowledge and experience to view this content. This includes understanding the risks associated with investment products, and any other required qualifications according to the rules of your jurisdiction.