After stocks, Revolut has its sights set on a new asset class

Revolut offers a trading service, the purchase of cryptocurrencies and commodities, and a marketplace for e-commerce. These three services were secondary in their early days, but now they represent a large part of Revolut’s income in order to survive and recover from the crisis associated with the pandemic.

The company is said to be sitting on nearly $ 1.4 billion in cryptocurrency on behalf of its customers. It claims to open 300,000 new cryptocurrency wallets per month. There is also success on the retail side.

The chairman, Martin Gilbert, spoke about the topic at the virtual conference “ETF Ecosystem Unwrapped” last week. And new things are coming. Revolut is considering adding a new product.

ETFs in the eye of the revolution

UK Neobank would consider adding a new asset class to its trading offering. “Revolut will have to get into asset management. At the moment there is no plan, but it cannot be avoided, ”he said before going into more detail:“ ETFs would be an ideal product to offer ”.

Exchange Traded Funds (ETFs) are not currently available on Revolut, which has been focusing on stocks and especially PSPCs for the past few days. To give clients the opportunity to diversify their portfolios and invest more securely when they don’t know about it, ETFs are an optimal solution.

ETFs are mutual funds that usually replicate an index or a security category (e.g. securities from technology companies, more precisely from Fintech, Greentech). A basket consists of a group of securities, the respective amount of which is weighted in such a way that the index selected as the benchmark is precisely replicated.

By investing in an ETF, investors therefore have a single order to invest in several companies that are part of the basket. The shopping basket changes every year, and with it its weighting. Like the shares, they remain traded on the stock exchanges during the opening hours of the respective markets. With a single product, customers are invested in various securities in order to diversify their investment portfolio.

Revolut currently offers its trading activities through its partnership with DriveWealth. The American company offers Neobank the entire brokerage infrastructure via API, which has already resulted in Revolut having to use decisions like those in the GameStop affair, which neither the customers nor the management of the bank had liked.

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