Dynamic Capital Group AG issued an Actively Managed Certificate (AMC) on
Future of Finance 40^(c) in collaboration with Michael O'Sullivan

Link: https://dynamiccapitalgroup.com/en/products/

ISIN: CH1104954412

The COVID crisis has accelerated many trends that were building. One is the rise of the digital economy, which prior to the pandemic was thriving in China, but has accelerated rapidly in the US and Europe where in places the proportion of retail activity that takes place digitally has shot from 5% to 30%.
In finance, this trend has been pronounced in the performance of digital finance players like PayPal and in the rise of new financial ecosystems in retail trading, cryptocurrencies and in Cloud enabled financial operations. At the same time, an increasing number of new, digital finance companies have come to market.

The emergence of digital finance companies stands in contrast to incumbent banks, who despite a yield curve assisted rise in their share prices continue to underperform the broad market. The fact that most major European banks have sustained low valuations (price to book ratios) suggests that investors have very little faith in their ability to earn above their cost of capital. Regulation, generally ineffective IT spending, poor leadership and corporate governance issues and risk laden balance sheets are some of the problems facing European banks.

To put this is stark, performance terms. Since May 2006 the MSCI European Equity market index has doubled, while the MSCI European banks index has halved. It doesn't look like European banks will catch up any time soon. As more pure fintech companies come to market investors increasingly have the choice to move away from 'dinosaur' banks (that still collectively hold well over Eur 700bn in investor capital) and gain access to disruptive innovation and new eco-systems in finance. What is also interesting is that in many countries that do not have well-developed incumbent financial systems, fintech led banks are growing rapidly - Brazil and some African countries like Kenya are examples.

In this context, the 'Future of Finance 40' is an equally weighted group of forty companies that span the payments, Cloud banking services, crypto and digital currency, wealth and banking software and trading platforms that are listed in the US, Europe, Australia and in select emerging markets.
The companies in the FF40 are chosen on the basis of sector growth, market penetrations, earnings and revenue growth, ownership structure and fintech strategy.
With very few exceptions, the intention is not to feature incumbent banks nor large social media players like Amazon and Facebook, who while often featured in fintech ETF's and fintech funds are not pure fintech plays. The intention is that the FF40 manages to pick up the positive effects of market growth and innovation across several fintech sectors, not to mention the side-effects of disruption.

By nature, the companies in the FF40 have a high sensitivity (or beta) to market moves and in the event of a broad market downturn, risk a drawdown.
For this reason, the FF40 investment process incorporates the ability for the manager to move to 49% cash and to also allocate to US Treasuries in the event of a peak in risk appetite that would render future performance of the FF40 vulnerable to a drawdown.
With the digital age now unambiguously upon us, the FF40 is one of the few ways of offering investors the means of gaining access to innovation and disruption in finance, that does not tie them to slow moving incumbents and that provides a mechanism to limit overall market risk.

Michael O'Sullivan has twenty years experience in global financial markets, most recently as Chief Investment Officer in the International Wealth Management Division of Credit Suisse, where he worked for twelve years. Today he is adviser to a number of asset managers. Michael is the author of 'The Levelling', which outlines what's next in politics, economics, finance and geopolitics in the post globalization era. He was a member of the World Economic Forum's Council on the New Economy, and a Forbes contributor, and a speaker at the 2020 TED Talk conference. He studied in Cork and received MPhil and DPhil degrees at Balliol College, Oxford as a Rhodes Scholar. He has taught finance and economics at Oxford University and Princeton University.

Dynamic Capital Group AG is an innovative issuer of Structured Products especially Actively Managed Certificates (AMC's), Tracking Certificates and Credit Linked Notes (CLN's) providing access to a wide range of bankable and non-bankable assets. DCG is also specialized for providing to Venture Capital and Private Equity companies access to the financial markets. Structured products are ideal vehicles to gain exposure to many difficult-to-access asset classes including Food-Tech, Crypto currencies, ESG and Fintech. Due their cutting-edge technology DCG can create, order and manage the distribution of their products in an efficient and simple manner.
Headquartered in Zurich, Dynamic Capital Group AG also has offices in Winterthur, Guernsey, Cyprus and Dubai.

Dynamic Capital Group, Löwenstrasse 20, 8001 Zurich , Switzerland

Dynamic Capital Group, Wintower, Neuwiesenstrasse 15, 8400 Winterthur, Switzerland

https://dynamiccapitalgroup.com/

products@dynamiccapitalgroup.com