An ancient Greek philosopher named Heraclitus is said to have coined the phrase “The only thing that is constant is change.” Roughly 2,500 years later and these words ring truer than ever. In the world of asset management, it’s crucial that firms have a grasp on where things are heading so they can remain competitive, but it’s becoming increasingly difficult to predict the direction in which things might go.
Financial Technology (Fintech) refers to the technologies used and applied in the financial services sector. During the last decade, due to technological innovations, fintech firms are disrupting traditional financial services sectors in retail banking, investment, mobile payments, loans, fund-raising and asset management. Fintech is also changing customer behavior and expectations as they are now able to access data and information anywhere and everywhere.
One of the hottest subsets of the fintech landscape these days, and for good reason, is alternative data providers. Quantitative investment funds, which continue to outperform their discretionary peers, are in an all-out frenzy to feed their algorithms with as much valuable data as possible to find market signals
ITG Investment Technology Group has been a laggard in a sector that is now spiraling lower — not a good combination. ITG is an investment play that is unchanged year-to-date and 3% lower during the last 12-month period. It sports a dividend yield of 1.4%. Earnings momentum has been waning with three straight losing quarters: 1.3%, 14.7% and 3.6% respectively.
While many fintech firms are swimming firmly upstream, Broadridge Financial Solutions is up 16% year-to-date and 54% duing the last 12-month period with a dividend yield of 1.4%. Earnings have been mixed, splitting positive and negative quarters over the last year.
It is the season for trend and breakout traders, according to my chart range statistics, aggregate statistics, and pivots. I do love sideways markets like I love Nashville biscuits with slow-pouring molasses & butter. Trying to pinpoint range reversals is a thrill. However, these breakout markets, at this moment wrecking my range-prediction precision, are teaching me honesty, flexibility, and caring service to others.
Financial technology has been driving markets for decades. Often when we talk about fintech it is about some new technology that promises to disrupt the current market model. But today’s disruptive technology can be tomorrow’s trading infrastructure.
Distributed ledger technology is a cryptographically encoded, highly detailed ledger of transactions, distributed across a public or private network that promises substantial benefits of transaction speed and security, process efficiencies and cost savings.