Times are tough right now, but the US consumer is feeling a little better this month with the US Consumer Sentiment Index hitting its highest level since last April. Add to that Wednesday that e-commerce company Shopify (SHOP) would raise prices for its plans and an analyst’s assessment that the company has dry powder for mergers and acquisitions, and there could be strong arguments for investors to follow an active fintech ETF like the ARK Fintech Innovation ETF (ARKF).
SHOP was up 8.7% at press time on Wednesday and was already up nearly 39% in the past month. The Canadian company, which received an upgrade from Deutsche Bank this week, announced the 34% selling fee hike in a blog post. This price increase can also raise the company’s growth flooralso, which could be a key stimulus in a year that promises to be a little volatile.
Meanwhile, at least one analyst believes the company’s cash flow and financial flexibility position to make more purchases to support its strategy. This could help in a year where competitors may struggle due to rising rates or a possible recession, allowing SHOP to cement itself as the preeminent e-commerce platform.
ARKF currently has SHOP listed as its highest weighted stock at 11.8%. The active fintech ETF currently charges a fee of 75 basis points and invests in companies positioned to win in the fintech space focused on blockchain, transaction innovation, client platforms, and more. ARKF recently turned a month’s net outflows into net inflows over the past five days, adding $11.5 million over that period.
ARKF not only benefits from SHOP, but also from its ongoing crypto spring exposure through Coinbase (COIN), its third largest holding at 10%. The active fintech ETF also holds transaction firm Block (SQ) as its second-highest weighted stock at 11.7%.
Investors have a lot on their plate right now, with earnings week in full swing. That said, customers will continue to spend, and SHOP could be a title positioned to gain market share this year if its strength in M&A capability yields results. For investors interested in the space, ARKF is definitely an ETF to consider.
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