Last updated on Jul 10th, 2021 at 04:44 pm
The recent attention of the world’s business media on online share trading has sparked the interest of many, especially those looking to enter the markets for the first time. Last year, at the height of Covid-19 lockdowns and concern about the state of the South African economy, former veteran finance journalist Magnus Heystek suggested that South African investors should look offshore to shore up wealth.
Business is booming: NASDAQ-100 Index up 48% in one year
Heystek runs investment boutique Brenthurst Wealth Management which has offices around South Africa and Mauritius and about R8B in assets under management. For some time he has been encouraging offshore exposure, in the process irking the professional fund management establishment, but he might just have a point, and many South African investors have begun to wonder how to buy stocks on offshore markets.
“The bottom line is that our local market, with the exception of Naspers/Prosus and some gold and platinum counters… has been reflecting the collapse of the SA economy as result of the ANC’s destructive economic policies,” Haystek wrote on the BizNews Web site. “Please note that I am not even comparing the JSE [Johannesburg Stock Exchange] with the rampant Nasdaq or even the more buoyant S&P500. That would really make some people sick,” he went on.
But how to find South African brokers with NAS100 exposure? A firm favourite of the US indexes, the NASDAQ-100 Index (NAS100) is made up of 102 equity securities issued by 100 of the largest non-financial companies listed on the Nasdaq stock market. It has seen phenomenal growth of 48.88% in the last year alone, and just over 552% in 10 years.
Invest in Nasdaq darlings such as Netflix and Amazon
Investing in offshore securities has long been the domicile of the large established banks which traditionally have high barriers to entry. FNB, however, recently launched exchange-traded notes (ETNs), offering fractional shares that track the likes of Nasdaq darling stocks such as Netflix and Amazon. FNB’s Exchange Traded Funds (ETFs) also offer investment trade online in more than 30 exchanges globally, including the Nasdaq, New York Stock Exchange (NYSE), and London Stock Exchange (LSE), but the minimum required to get started is R10,000, a high figure for beginner investors.
A more rewarding—although riskier option—may be the Sygnia FAANG Plus Equity Fund Class B, a high-risk, dynamically managed fund. FAANG is an acronym for five popular tech stocks, namely Facebook, Amazon, Apple, Netflix, and Google (Alphabet). The fund provides exclusive access to these world leaders in the technology and Internet-services sectors, where the business focus is on industry-disrupting technologies such as cloud storage, big data, social media and e-commerce tools.
Sygnia offers investments via a monthly debit order of R500 per month. “Our funds are designed to challenge the status quo, because we want our investors to feel like the world is their oyster, that everything is possible,” says Kyle Hulett, head of investments.