TechBreakdowns Fintech COMPLETE Index

As part of our ongoing coverage of various tech sectors, we are excited to introduce a new indices section on TechBreakdowns.com. Kicking off this section is our focus on fintech.

If you're interested in following along, there will soon be a page holding all indices on TechBreakdowns.com. Updates will also be provided via the TechBreakdowns newsletter of all indices during their rebalancing periods.

This index aims to encompass the entire fintech sector, with a specific focus on growing companies. Here are the criteria for inclusion:

1. Market Cap: The equity must have a market cap above $250 million.
2. Revenue Growth: The equity should have shown revenue growth over the last three years (ideally, >5%).
3. Fintech Focus: The equity should generate, or be expected to generate, a significant portion of its revenues from the intersection of finance and technology.
4. U.S. Listing: The equity should be listed on a U.S. exchange (ADRs are acceptable).
5. Liquidity: The equity should be liquid, with an average daily trading volume exceeding $5 million.

Growing Revenues

To ensure the index is not weighed down by low-growth names, we have set growth criteria. However, there will be some flexibility:

1. IPOs: For instance, if Stripe were to go public this year without providing three years' worth of growth data, it could still be included if the available data meets our criteria.
2. Contextual Growth: Companies like Block (SQ), which did not grow in 2022 due to extraordinary circumstances like the COVID-19 pandemic, will be considered based on their overall growth trajectory. Discretion will be applied, and updates on inclusions or removals will be provided.

Defining "Fintech"

There is no universal definition of fintech. Inclusion or exclusion from the index will be based on TechBreakdowns' decisions, with reasoning provided during quarterly updates.

Rebalancing

The index will be rebalanced quarterly, adding new equities, removing others, and balancing equally. Rebalancing will occur on weekends using the last closing prices.

Tracking

The index will be tracked on the TechBreakdowns index page with regular updates. We will benchmark it against the S&P 500 and the NASDAQ. Dividends will not be tracked.

Initial Portfolio

The portfolio will start with $10,000. We will also track $10,000 invested in the two benchmark indices. Here are the initial stocks in the TechBreakdowns Fintech COMPLETE Index: