risks.

The following risks may be materially relevant but may not always be adequately captured by the summary risk indicator and may cause additional loss: Concentration risk, Emerging market risk and Active management risk.

Global FinTech

Embracing the digitalisation of finance
 

Fintech has profoundly disrupted the financial services industry since its emergence in the aftermath of the 2008 global financial crisis. As it continues to transform the financial landscape over the next decade and beyond, our Global FinTech strategy seeks to help investors tap into this sustainable long-term trend.

*Source: Fintech Market Size, Share, Price, Growth, Report 2023-2028 (expertmarketresearch.com)

the future is FinTech.

Fintech is revolutionising financial services and looks set to shape the future trajectory of the industry. Just think of how much payments and mobile banking have changed in the past 10 years, and then imagine more changes of a similar magnitude occurring over the next decade.

Fintech, or financial technology, is the broad term applied to technologies that either enhance existing financial services or enable the creation of new products. It both disrupts legacy services and sustains innovation within them. 

Within certain areas, fintech solutions equip traditional providers with the tools to retaliate and defend their market position.

We believe fintech will eventually evolve into a new financial service sector comprised of very different players. The winners and losers are being determined as we speak and are mostly characterised by their ability to transform legacy business and offer relevant services at competitive prices.

five FinTech themes.

Financial services and companies are changing rapidly by embracing digital technologies. In general, we believe five core areas will drive investment opportunities in the industry over the next two decades:  

FinTech universe of opportunities.

  • An increasingly sophisticated digital payments infrastructure is enabling this transformation. Singapore and the Netherlands currently lead with digital payments, while Italy, Greece and most emerging markets remain largely cash-based societies.

    Snapshot of key digital payments companies:
     

  • A significant number of people across the world lack exposure to financial services. For example, almost a quarter of US households – or 34 million – are either unbanked or underbanked1.

    Key companies supporting digital infrastructure include:
     

    1 Source: Federal Deposit Insurance Corporation (FDIC) 2022 American Banker.

  • Digitisation involves unbundling services traditionally provided by banks (payments, lending, insurance and wealth management). This boosts efficiency and fosters the emergence of new banking and fintech services.

    Examples of providers who are enhancing efficiency through digitisation include:
     

  • The rise of technology ecosystems is increasing the need for fintech. This refers to companies (e.g., PayPal, Uber)** that build up large customer bases and then lock them in with additional services. With the Banking as a Service (BaaS) model, traditional banks can integrate digital services directly into the products of non-bank businesses. These tech-ecosystem companies need fintech expertise, creating a large B2B opportunity.

    Examples of tech-ecosystem companies include:
     

  • Cyber security is a necessity for providers of digital financial services, which are particularly vulnerable to hackers. Regulations aimed at preventing cyber-attacks are strengthening, with higher fines for businesses that lack protection. Cybercrime insurance is an example of an area that is growing steadily.

    Key providers of cyber security:
     

**Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or securities. It should not be assumed that the recommendations made in the future will be profitable or will equal the performance of the securities discussed in this document

why us?

Successful trends investing involves the ability to monetise behavioural inefficiencies in the market, where the impact and pace of change are underestimated in the long run. With fintech, new technologies are both transforming legacy financial services providers and enabling new types of services.

The market is constantly changing, requiring bespoke, dual expertise that includes a comprehensive understanding of both financial services and technology. 

At LOIM, the expertise of our dedicated FinTech investment team is uniquely adapted to this sector. The strategy is led by Henk Grootveld, who joined LOIM in January 2020 from Robeco and brings over 20 years of expertise in thematic investment, and managed by Jeroen van Oerle and Christian Vondenbusch, who both joined LOIM with Henk. Jeroen has a specialisation in technology and was previously Portfolio Manager of Robeco’s Global FinTech Equities strategy. Christian is a highly experienced Senior Portfolio Manager with a demonstrated track record in thematic investing and a specialisation in financials.

Together the team have demonstrated an ability to separate short-term hype from the companies making real earnings driven by long-term trends.

our strategy.

Our Global FinTech strategy focuses on capturing value from the technological and digital transformation of the financial services sector.

The strategy follows a high conviction stock-picking process, founded in the continuous fundamental analysis of global markets, as fintech continues to drive the uptake of digital technologies across financial services industries. An active portfolio of around 50 well-diversified stocks is selected, following a disciplined analysis focused on their financial track record and business practices, and a forward-looking assessment of the sustainability of their business models and valuation.

Holdings are diversified across three categories:
 

investment philosophy and process.

We believe sustainability will drive future return potential.

At Lombard Odier Investment Managers, our conviction in sustainability is integrated into our processes, driving everything we do.

Our approach to implementation is rigorous and disciplined thanks to a transversal platform across strategies. This ensures maximum efficiency. 

Our fundamental research is highly focused and benefits from the sharing of best practices and ideas.

Our disciplined approach facilitates strict risk management by ensuring transparency and accountability at every step of the process.
 

Source: LOIM analysis. For illustrative purposes only. 

investment team.

LOcom_AuthorsAM-VanOeorle.png

Jeroen van  Oerle
Co-Portfolio Manager

LOcom_AuthorsAM-Vondenbusch.png

Christian Vondenbusch
Co-Portfolio Manager

LOcom_AuthorsAM-Grootveld.png

Henk Grootveld
Global Trends

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more about our funds.

LO Funds - Global FinTech

Asset Class Equities
Strategy Thematic Equities
Category Global Trends
Share class name ISIN Currency Date NAV
Share class name LO Funds - Global FinTech, (EUR) I A ISIN LU2166617709 Currency EUR Date 5/16/24 NAV 12.31
Share class name LO Funds - Global FinTech, (EUR) M A ISIN LU2581994212 Currency EUR Date 5/16/24 NAV 11.23
Share class name LO Funds - Global FinTech, (USD) I A ISIN LU2107598596 Currency USD Date 5/16/24 NAV 13.69
Share class name LO Funds - Global FinTech, (USD) M A ISIN LU2107598919 Currency USD Date 5/16/24 NAV 13.56
Share class name LO Funds - Global FinTech, (USD) M D ISIN LU2107599057 Currency USD Date 5/16/24 NAV 13.56
Share class name LO Funds - Global FinTech, (USD) N A ISIN LU2107599487 Currency USD Date 5/16/24 NAV 13.67
Share class name LO Funds - Global FinTech, (USD) P A ISIN LU2107599644 Currency USD Date 5/16/24 NAV 13.2
Share class name LO Funds - Global FinTech, (USD) P D ISIN LU2107599727 Currency USD Date 5/16/24 NAV 13.2
Past performance is not a guarantee of future results. If the funds are denominated in a currency other than that in which the majority of the investor's assets are held, the investor should be aware that changes in rates of exchange may affect the value of the funds' underlying assets. The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk.

Global FinTech: trends to watch in 2024
investment viewpoints Asset Management
investment viewpoints Asset Management Equities DC DB Banks Wholesale Official institutions Third party asset managers Geronne Independants Institutional Consultants Insurance Fund of funds FinTech Endowments Themes

Global FinTech: trends to watch in 2024

We believe that our universe of FinTech companies is attractively valued and well-placed to benefit from a broadening of the market in 2024. How will trends like AI and M&A play out in this space? 

AI in financial services
investment viewpoints Asset Management
investment viewpoints Asset Management Equities DC DB Banks Wholesale Official institutions Third party asset managers Geronne Independants Institutional Consultants Insurance Fund of funds FinTech Endowments Themes

AI in financial services

There is a great deal of Artificial intelligence (AI) within financial services, but it is not disruptive. Rather, AI is sustaining innovation and improving efficiency. 

Fintech has changed finance forever. What comes next?
investment viewpoints Asset Management
investment viewpoints Asset Management FinTech

Fintech has changed finance forever. What comes next?

The disruption caused by fintech has been profound. How will digitalisation continue to alter the financial services landscape?  

FinTech: 3 years of pure-play, high-quality investing
investment viewpoints Asset Management
investment viewpoints Asset Management Institutional Consultants DB DC Insurance Official institutions FinTech Wholesale Banks Endowments Fund of funds Geronne Independants Third party asset managers

FinTech: 3 years of pure-play, high-quality investing

Since we launched our Global FinTech strategy three years ago, we have maintained a focus on quality growth at a reasonable price, outperforming our peer group. 

Fintech equities: are investors neglecting cybersecurity risk?
investment viewpoints Asset Management
investment viewpoints Asset Management Institutional Consultants DB DC Insurance Official institutions FinTech Wholesale Banks Endowments Fund of funds Geronne Independants Third party asset managers

Fintech equities: are investors neglecting cybersecurity risk?

Cyberattacks exact significant financial costs on companies – but are these being priced-in to equity valuations?

FinTech trends to watch in 2023
investment viewpoints Asset Management
investment viewpoints Asset Management Institutional Consultants DB DC Insurance Official institutions FinTech Wholesale Banks Endowments Fund of funds Geronne Independants Third party asset managers

FinTech equities: trends to watch in 2023

Excessive valuations in our FinTech universe are now largely gone, contributing to a positive 2023 outlook, in our view. 

important information.

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