What do Interactive Brokers Group Inc., American Express Co. and First Citizens BancShares Inc. have in common?
Macrae Sykes manages the Gabelli Financial Services Opportunities ETF GABF , which has performed well this year compared with its benchmark, the S&P Financials sector, which is tracked by the Financial Select SPDR ETF XLF : The ETF is focused on capturing long-term growth tied to the continuing wealth transfer in the U.S. from the baby boomer generation to younger people and the growing need for asset management and payment processing services.
Sykes also said: “The financials universe is much bigger than just banks –– so there are other ways to find equity returns.”Interactive Brokers Group IBKR was the fourth largest holding of GABF as of Dec. 31. Sykes said the company’s financial position is very strong, with $12 billion in capital and its own investments concentrated in short-duration U.S. Treasury securities.
Sykes called American Express a good play on the generational wealth transition. “They are getting the biggest share of millennials,” he said, calling these newer customers “big spenders, loyal, with more velocity,” and likely to use their cards at “a lot more touch points” than older customers.
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