First National Bank (FNB) has expanded its extensive Exchange-Traded Note (ETN) offering with the introduction of eight new ETNs. These new offerings, brings the bank’s popular range of ETNs to a total of 50, are designed to give South African investors easy and affordable access to leading companies operating in pivotal global sectors of AI and technology, tourism and travel, pharmaceuticals, and cybersecurity.
Sebastian Pillay, Head of Share Investing at FNB, describes ETNs as financial instruments that allow investors to gain international exposure to the performance of underlying assets or indices without the need to own them directly or taking your money offshore.
“ETNs are debt securities issued by a financial institution, and their value fluctuates based on the performance of a specific market index or asset, but because investors don’t directly own the underlying shares, these innovative investment solutions allow them to easily diversify into global markets without having to comply with onerous exchange control regulations,” says Pillay.
FNB’s new range of ETNs provide investors with a direct link to valuable and thriving global sectors that would otherwise be hard for them to access. In the case of the four new ETNs, these sectors are:
- AI and Tech: The Nvidia ETNs (NVETNC & NVETNQ) align investors with advanced technological and AI development sectors that are driving the next wave of digital transformation and have seen significant growth in recent years.
- Tourism and travel: FNB’s Booking Holdings ETNs (BKETNC & BKETNQ) capitalise on the global travel sector’s continued revival in the post Covid-19 era, promising growth as economies recover and travel steadily increases.
- Pharmaceuticals: The Eli Lilly and Co ETNs (LLETNC & LLETNQ) offer an opportunity to benefit from investment in a company at the forefront of the burgeoning healthcare sector thanks to its proven track record of medical innovation.
- Cybersecurity: The Palo Alto Networks ETNs (PAETNC & PAETNQ) provide an avenue for investment in the protection of digital assets, an increasingly critical component of global security infrastructure as the world becomes increasingly digitised.
Each of these FNB ETNs are tailored to the investor’s preference regarding currency exposure. ‘Compo’ versions of the ETNs (indicated by the ‘C’ in the JSE code) provide US dollar and price exposure, which means investors can benefit from any outperformance of that currency over time. ‘Quanto’ versions (indicated by ‘Q’) are designed to mitigate the effects of currency fluctuations and provide exposure only to the price movement of t.
According to Pillay, the newly launched ETNs correspond with FNB’s focus on sectors that promise growth, innovation and represent the bank’s strategic response to the current challenges facing the local markets, notably the continued delisting trend seen on the JSE, persistently low investment volumes, and the identified need for greater geographic portfolio diversification opportunities.
“These ETNs, combined with the others that already exist in the FNB stable, reflect our alignment with both global and domestic market trends,” he explains, “offering South African investors opportunities to diversify their portfolios across a broad spectrum of growth and emergent sectors across borders.”
It’s a philosophy that has seen the FNB ETN range garner a significant following amongst South African investors thanks to the access they have been afforded to the solid performance of such global market stalwarts as Goldman Sachs, Amazon, Alphabet and Facebook, to name a few.
With a low minimum investment requirement of just R10, and no minimum fees and charges, the accessibility of the FNB ETNs also underscores FNB’s ongoing commitment to investment democratisation, ensuring that all markets are accessible and achievable for every investor. “FNB believes in empowering South Africans financially by simplifying access to investments in many of the companies and brands that already shape their daily lives and, in the process, providing the real potential for substantial growth,” says Pillay.
Investors seeking to enhance their portfolios with international exposure can access all the FNB ETNs, including these eight latest offerings, through FNB Share Builder, Share Investor and Local Trader, or via FNB’s low-cost Shares Zero investment product which has no monthly account fee. Alternatively, investors can simply search for the ETN codes as provided above on any stockbroking platform that grants them access to JSE-listed instruments.
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