IPAY vs KOMP

Key Takeaways

• IPAY offers concentrated exposure to ~40 global digital payments companies, while KOMP provides broader diversification across 482 innovative firms disrupting multiple industries.
• IPAY's expense ratio of 0.75% is significantly higher than KOMP's low-cost 0.20%, impacting long-term cost efficiency.
• IPAY emphasizes financial services (41%) and technology (55%), whereas KOMP balances technology (~33%), industrials (~28%), and healthcare (~12%) for reduced sector risk.
• Top 10 holdings represent over 54% of IPAY, indicating higher concentration risk, compared to under 10% in KOMP.
• Both are passive thematic ETFs, but KOMP's tiered weighting and annual reconstitution enhance adaptability to innovation trends.
• KOMP exhibits stronger trend consistency and lower relative volatility due to broader exposure in recent market cycles.

Introduction

In an era of accelerating digital transformation, ETFs targeting fintech innovation and broader technological disruption have garnered investor interest. The Amplify Digital Payments ETF (IPAY) and State Street SPDR S&P Kensho New Economies Composite ETF (KOMP) offer alternative pathways to thematic growth. IPAY focuses narrowly on mobile and digital payments infrastructure, capitalizing on e-commerce and cashless trends. KOMP, conversely, captures a wider "new economies" theme, including AI, robotics, and automation across sectors. While not direct competitors, both appeal to investors seeking exposure to exponential technologies amid rising capital flows into innovation. This comparison highlights their structural differences, aiding decisions on sector-specific versus diversified thematic positioning.

Amplify Digital Payments ETF (IPAY) Overview

The Amplify Digital Payments ETF (IPAY) is a passive thematic ETF that seeks to track the Nasdaq CTA Global Digital Payments Index (WALLET). This modified market-cap weighted index targets companies delivering payment-related products and services, including card networks, processors, and software solutions. The fund holds approximately 40 securities, with top 10 holdings comprising over 54% of assets: Block Inc. (~6%), SQ (~6%), V (~6%), MA (~5.5%), Adyen NV (~5.5%), Affirm Holdings Inc. (~5.5%), Wise Group PLC (~5.5%), AXP (~5%), COF (~5%), COIN (~5%), and PYPL (~5%). Sector allocations tilt heavily toward technology (55%) and financial services (41%), with minor industrials (4%). The expense ratio is 0.75%, and the index rebalances quarterly. As a non-diversified fund, IPAY provides targeted liquidity in global fintech transaction volumes but carries concentration risk.

State Street SPDR S&P Kensho New Economies Composite ETF (KOMP) Overview

The State Street SPDR S&P Kensho New Economies Composite ETF (KOMP) is a passive thematic ETF tracking the S&P Kensho New Economies Composite Index. This AI-powered index uses natural language processing on regulatory filings to identify and equally weight (within tiers) ~482 U.S.-listed global companies driving disruption via robotics, AI, automation, and processing power. Top 10 holdings account for ~10%: Elbit Systems Ltd. (1.6%), Bloom Energy Corp. (1.2%), ON Semiconductor Corp. (1.1%), Teledyne Technologies Inc. (1.1%), Himax Technologies Inc. (1.0%), Iridium Communications Inc. (0.9%), 3D Systems Corp. (0.8%), Bruker Corp. (0.8%), Generac Holdings Inc. (0.8%), and Twist Bioscience Corp. (0.7%). Sector breakdown features technology (~33%), industrials (~28%), healthcare (~12%), utilities (~5%), and communication services (~6%). The expense ratio is a low 0.20%, with annual reconstitution based on Sharpe ratios across sub-indexes. KOMP's diversified structure mitigates single-sector volatility while capturing broad innovation.

Industry and Thematic Backdrop

The digital payments and new economies sectors thrive amid global digitization, with mobile payments projected to expand from $3 trillion in 2023 to $28 trillion by 2032 at a 28% CAGR (compound annual growth rate). Catalysts include AI-driven fraud prevention, stablecoin adoption for settlements, real-time payment rails like FedNow, and regulatory clarity on CBDCs (central bank digital currencies). Macro drivers such as e-commerce growth, smartphone penetration, and tokenized assets fuel IPAY's focus. KOMP benefits from AI investments, robotics in manufacturing, and automation, with hyperscaler CapEx hitting $561 billion in 2026 for data centers. Risks encompass interest rate sensitivity affecting fintech lending, geopolitical tensions disrupting supply chains, and regulatory scrutiny on crypto exposures. Capital flows favor diversified innovation over narrow fintech amid sector rotation.

Performance and Positioning Comparison

In recent market cycles, KOMP has demonstrated superior relative positioning, capturing ~38-44% gains over the past year through diversified exposure to AI and industrials amid tech rallies. IPAY, more sensitive to fintech earnings and consumer finance pressures, posted year-to-date declines around -10% and one-year returns near -11%, trailing broader equities. Over recent months, IPAY experienced heightened volatility from buy-now-pay-later slowdowns and payment network challenges, while KOMP's broader base buffered drawdowns. KOMP's lower concentration and balanced sectors align better with sector rotation toward industrials and utilities, contrasting IPAY's reliance on financials amid interest rate expectations. Both exhibit growth beta, but KOMP's structure supports trend consistency.

AI Screener

Tickeron’s AI Screener is an AI-powered stock and ETF discovery tool that helps traders and investors filter the market based on technical patterns, fundamentals, trends, volatility, and AI-driven signals. Users can scan thousands of stocks and ETFs using customizable filters such as industry, market capitalization (market cap), technical indicators, price patterns, and performance metrics. The screener identifies trade ideas, trending stocks, breakout candidates, and market opportunities more efficiently than manual screening, empowering data-driven decisions across asset classes.

Tickeron AI Verdict

Tickeron’s AI currently favors KOMP with moderate conviction (~65% probability of outperformance over the next cycle). Its superior cost efficiency, extensive diversification (482 holdings), balanced sector momentum in innovation themes, and lower concentration risk provide structural advantages over IPAY's narrower, higher-cost exposure. While IPAY suits pure-play digital payments bulls, KOMP's adaptability positions it better amid macro shifts.

Disclaimer

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