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 - Second quarter results were strong across the fintech universe

  • 05 August 2020 (10 min read)

Key points

  • Global equity markets performed well in July on the back of strong corporate earnings
  • The strategy out-performed its performance benchmark
  • All sub-themes contributed positively, led by cashless society companies

What’s happening?

Although global Covid19 infection rates showed no sign of slowing down, global equity markets performed well in July on the back of strong corporate earnings and generally strong second half guidance from large index constituents.

Portfolio positioning and performance

The FinTech strategy outperformed its performance benchmark in June.

Top contributors to the fund’s performance were, StoneCo (Brazil, digital payments, strong digital payment volumes), Paypal (US, digital payments, blowout Q2 results), ZhongAn (China, online insurance, strong post-Covid operating trends), ZScaler (US, cybersecurity, strong demand) and FIS (US, digital payments, strong operating environment).

Negative contributors included Worldline (France, digital payments, profit taking following strong previous performance), Visa and Amex (US, digital payments, fears about offline retail exposure and subdued cross-border payment volumes), Temenos (Switzerland, banking software, worries about large contracts being delayed) and Banco Santander (Spain/Latam, innovative financial, Latam Covid19 fears).

In July, we started to build a position is new generation cybersecurity stock Crowdstrike.


We expect volatility to remain elevated for some time on the back of fluctuating Covid19 newsflow.

Today’s exceptional liquidity environment should also continue to support valuations over the next few quarters, until economic visibility is sufficiently improved, at which point the performance of “value” / cyclical companies could start to catch up with their growth counterparts. Under this scenario, equity markets could perform strongly on a medium-term basis even if some “blue sky” smaller tech stocks were to take a breather.

While some growth companies will never be able to live up to the market’s high expectations, we strongly believe that the companies the fund invests in will continue to deliver the goods as their growth is “real”, based on a long-term structural shift in demand for fintech services.  The Covid-19 crisis is a significant growth accelerator for the fintech universe.

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.

    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 document is for informational purposes only and 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.

    It has been established on the basis of data, projections, forecasts, anticipations and hypothesis which are subjective. Its analysis and conclusions are the expression of an opinion, based on available data at a specific date.

    All information in this document is established on data made public by official providers of economic and market statistics. AXA Investment Managers disclaims any and all liability relating to a decision based on or for reliance on this document. All exhibits included in this document, unless stated otherwise, are as of the publication date of this document. Furthermore, due to the subjective nature of these opinions and analysis, these data, projections, forecasts, anticipations, hypothesis, etc. are not necessary used or followed by AXA IM’s portfolio management teams or its affiliates, who may act based on their own opinions. Any reproduction of this information, in whole or in part is, unless otherwise authorised by AXA IM, prohibited.

    Issued in the UK by AXA Investment Managers UK Limited, which is authorised and regulated by the Financial Conduct Authority in the UK. Registered in England and Wales, No: 01431068. Registered Office: 22 Bishopsgate, London, EC2N 4BQ. In other jurisdictions, this document is issued by AXA Investment Managers SA’s affiliates in those countries.

    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.