Jupiter Financial Opportunities fund manager Guy de Blonay says greater strides towards a “cashless society” are presenting a number of opportunities for investors.
He says: “The move towards a cashless society is turning out to be one of the most powerful forces driving returns in the global financial sector.
“Rising credit card use, the growing dominance of e-commerce and the emergence of mobile payment technology are putting paid to the idea that cash is king.
“Companies in a position to benefit from this trend or that provide the technology to facilitate and accelerate its development offer appeal in a sector that has been short of opportunity for some time.”
De Blonay says credit card companies such as Visa and Mastercard would make obvious candidates with their global reach and greater demand from emerging markets, but warns new entrants to the market can also provide opportunities.
“As the move to a cashless society is only its infancy, it is still too early to say which companies will end up leading the field,” he explains.
“Investing in a range of firms riding this trend may be sensible until the landscape clears and winners emerge.”
De Blonay adds: “The field is particularly crowded for companies involved in providing the technology helping facilitate the cashless revolution but a couple of names already stand out.”
The fund manager highlights Gemalto and Wirecard as European mobile companies set to benefit from the rise of the cashless society, as well as internet companies Amazon and Google who will also benefit as they become providers of financial services.
“Whatever the size of the company, they all operate in an area of the financial sector that carries tremendous growth potential,” he says. “Admittedly, growth comes at a price. Some of these stocks can seem an expensive proposition.
“At the same time, investors need to remember these companies don’t carry the problems of government interference, are relatively immune from sovereign risk concerns and offer few worries when it comes to their balance sheet. In the current climate, these are characteristics with undeniable appeal.”