ETF Investment in Financial Firms: "Focusing Only on Interest Rates Is Risky"... Now Attention Must Shift to 'This' [Weekend Money]

"Major Countries Advancing Digital Asset Policies
Approaching Beyond Interest Rate Trends with Broader Perspectives"

There is advice that, when investing in financial ETFs that include large banks, card network companies, and exchanges, investors should focus not only on interest rate trends but also on each country's policies regarding digital assets and related matters.

Choi Bowon, a researcher at Korea Investment & Securities, stated, "After the U.S.–Iran conflict, the movement of government bond yields determined the ups and downs of major financial ETFs. However, in the second half of the year, attention should be broadened to various financial services companies."

He cited the aggressive push for digital asset and stablecoin policies in various countries as the background. Choi explained, "Major countries are accumulating digital assets in large quantities as strategic assets and are increasing the introduction of stablecoins to secure global hegemony. North American, European, and Asian countries are extending trading hours and diversifying traded assets. With the U.S. midterm elections approaching, there is a high possibility that policies related to digital assets will become more concrete in each country. Therefore, it is necessary to approach financial ETFs from various perspectives."

In this competition for dominance, he suggested financial ETFs that include companies related to digital assets and those expected to benefit from diversified trading hours and assets, such as 'ARK Blockchain & Fintech Innovation (ARKF)', 'Amplify Blockchain Technology (BLOK)', 'VanEck Digital Transformation (DAPP)', and 'Global X FinTech (FINX)'. Choi noted, "Recent changes in the financial market are reflected in the main financial services and fintech ETFs. The notable characteristic is not only the inclusion of existing companies such as Shopify, Block, Robinhood, Coinbase, and recently volatile Circle Internet, but also an increased weighting of Bitcoin mining companies."

He particularly expressed a preference for ARKF, citing its inclusion of a variety of growth stocks in addition to major fintech and trading platform companies. The top holdings of ARKF are Shopify, Circle Internet, ARK Fintech Innovation ETF, Coinbase, Block, Robinhood, Palantir, AMD, and Toast.

For secondary preferred ETFs, he selected FINX and DAPP. The top holdings of FINX include Robinhood, Block, PayPal, Coinbase, Fiserv, Circle Internet, Intuit, SoFi Technologies, and Affirm Holdings. DAPP's largest holding is Hut 8, followed by Iris Energy, Block, Applied Digital, Riot Platforms, Coinbase, Marathon Digital Holdings, and TeraWulf.

Choi explained, "This is because companies that are transitioning from Bitcoin mining to data center-related businesses are now among the top holdings. These ETFs deserve more attention because they include companies expected to benefit not only from clearer digital asset regulations but also from increased investments in AI and data centers."

This content was produced with the assistance of AI translation services.