FNB launches Nvidia exchange-traded note

First National Bank has announced an expansion of its exchange-traded note (ETN) offering, adding ETNs from companies like Nvidia and Palo Alto Networks.

Altogether, the bank has added eight new ETNs, bringing its total offering to 50. It says the ETNs are designed to give South African investors easy and affordable access to leading international companies.

“ETNs are debt securities issued by a financial institution, and their value fluctuates based on the performance of a specific market index or asset,” said Sebastian Pillay, head of share investing at FNB.

“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.”

Four of FNB’s new ETNs include:

• Nvidia ETNs — align investors with advanced tech and AI development sectors that have seen significant growth in recent years.
• FNB Booking Holdings ETNs — let investors benefit from the revival of the global travel sector following the Covid-19 pandemic.
• Eli Lily and Co. ETNs — give investors the opportunity to invest in a company with a proven track record in a flourishing healthcare sector.
• Palo Alto Networks ETNs — give investors the opportunity to invest in the protection of digital assets.

FNB says each ETN is tailored to investor preference regarding currency exposure. Pillay says the newly launched ETNs align with FNB’s focus on promising sectors.

“These ETNs, combined with the others that already exist in the FNB stable, reflect our alignment with both global and domestic market trends,” he said.

The bank’s ETNs have a low barrier to entry, with a minimum investment requirement of R10 and no minimum fees or charges.

Nvidia has seen marked growth in recent years, most recently driven by positive sentiment around the extremely high demand for its chips for artificial intelligence applications.

In February 2024, it passed Google owner Alphabet Inc. to become the fourth-most valuable company in the world.

It reached a market cap of around $1.83 trillion, beating Alphabet Inc.’s roughly $1.82 trillion value.

The cybersecurity market could also be one to watch in future, with South Africa becoming a popular target for malicious actors.

Lead security researcher at Orange Cyberdefense Diana Selck-Paulsson recently told MyBroadband that the company had seen a significant increase in cybercrime incidents in the past year.

However, she noted that these cybersecurity incidents occur in smaller numbers than in other regions it monitors.