In response to the increasingly volatile global economy and complex local financial challenges, FNB has unveiled another two ground-breaking structured products, widening the scope for South African investors to leverage this alternative asset class alongside traditional investments.
Structured products, whilst traditionally seen as complex and inaccessible to the average investor, are now emerging as a prudent choice to diversify portfolios, ensuring capital protection while offering the potential competitive returns.
This range of structured products offered by FNB, including the two new FNB 100 CapitalPreserver options, merge exposure to various asset classes such as equities, income instruments, and derivatives, with the added benefit of capital protection. This blend provides investors with a strategic avenue to access market gains while mitigating risk, a combination that most investors find highly appealing in the current unpredictable financial climate.
- The new FNB 100 CapitalPreserver Participation 2 solution is a five-year, rand-denominated product that guarantees 100% capital protection at maturity. Investors benefit from 200% exposure to the growth of the EuroStoxx50 Index, allowing them to potentially double the index’s performance over the investment term. With a minimum investment of R20 000, this product provides a highly accessible way for investors to tap into the growth potential of the European markets without risking their capital.
- The FNB 100 CapitalPreserver Autocall 2 option is designed for those looking to invest in US dollars. This five-year product also ensures 100% capital protection at maturity and provides exposure to developed equity markets through the Bloomberg Luxury Series 1 Index. According to Samukelo Zwane, Head of Product at FNB Wealth and Investments, “This index was deliberately chosen due to its proven resilience and the fact that the performance of the companies and brands underpinning it are largely immune to the effects of inflation. With a minimum investment of $6,000, FNB 100 CapitalPreserver Autocall 2 offers an indicative return of 7-8% per annum if the index performs positively after the third, fourth, or fifth year. The indicative return is stated at investment and the dollar value of that return is multiplied by the autocall year (3, 4 or 5) in which the investment matures.”
According to Zwane, the two new structured products cement FNB’s position at the forefront of making these innovative investment solutions more accessible to South Africans. “Structured products have historically been a domain largely reserved for large institutional investors due to their prohibitive costs and high minimum investments, but now, thanks to technological advancements and FNB’s strategic product design, we are able to put these powerful investment vehicles within the reach of many retail investors,” says Zwane.
The FNB structured products incur a one-time upfront fee of 3% and are available for investment until June 14, 2024. There are various ways of investing in the FNB 100 CapitalPreserver Participation 2 (ZAR) product. FNB clients who have (or who open) an FNB Share Investor account can invest directly on the platform or via the FNB app. Non FNB clients can invest via their stockbrokers or trading platforms. Investment in the FNB 100 CapitalPreserver Autocall 2 (USD) requires a US$-denominated bank or trading account. Prospective investors are advised to speak to their portfolio or wealth manager to ascertain the best route to investment.
“These new structured products embody FNB’s belief that every investor deserves access to world-class investment instruments,” Zwane says. “By combining capital protection with exposure to international markets, these structured products offer a compelling value proposition and build on FNB’s commitment to making the benefits of structured investments more widely accessible.”
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