The Swiss bank is launching a global equity fund that plays to the theme of a fintech industry worth trillions of dollars, and which has been boosted by the structural changes wrought by the pandemic.

Union Bancaire Privée, the Geneva-based private banking group, has launched a global fintech equity fund which taps into the growth of this sector worldwide - an example of thematic investing.

The new offering is called the UBAM - Global Fintech Equity Fund.

The fund is managed by UBP’s Swiss & Global Equity team, its co-head Martin Moeller acting as leading portfolio manager. It invests in 20 to 40 stocks offering global exposure across fintech-related themes ranging from global payments to financial IT infrastructure, networks and security, data and analytics, insurance technology and financial platforms.

UBP argues that the fintech space – with a combined market cap of more than $2 trillion – allows for considerable investment opportunity.

The fund adopts a comprehensive industry view with a selective bottom-up approach based on proprietary valuation models that emphasise cash generation, or Cash Flow Return On Investment (CFROI). Investments are made across the CFROI lifecycle and focus on companies which are achieving higher growth than expected by the market, which can “beat the fade” through high barriers to entry, and are able to reinvent themselves in difficult periods. The allocation to these three alpha opportunities will also depend on the macroeconomic environment and the team’s strong convictions on specific stocks, the firm said.

“The fintech theme is benefiting from structural trends and has been further boosted by the increased need for e-commerce and data technology solutions amid the COVID-19 pandemic,” MichaĂ«l Lok, co-chief executive for asset management at UBP, said. “After four years of research, we are therefore extremely proud to have put together this new strategy based on our proprietary CFROI investment framework, and to offer another innovative thematic solution to investors. Such a strategy can help to diversify a tech exposure and is an efficient way to secure an allocation to various disruptive trends within the fintech industry.”