By Zimele Mbanjwa
The FNB Exchange-Traded Notes (ETNs) were mostly positive in the second quarter of 2026 (2Q26), amidst a backdrop of sharp swings in global markets driven by the United States (US)-Iran conflict, the subsequent reopening of the Strait of Hormuz, evolving central bank policy expectations, and growing concerns around artificial intelligence (AI) company valuations. The quarter began with elevated oil prices and heightened geopolitical uncertainty but ended on a more constructive note following an interim peace agreement between the rival nations, which led to a sharp decline in crude oil prices and in turn eased inflation concerns. As such, global equity markets delivered a strong quarter. Meanwhile, the South African rand strengthened by ~3.3% against the US dollar, supported by a South African Reserve Bank (SARB) rate hike and general hawkish outlook, strong gold exports, and an improving fiscal trajectory, which outweighed pressure from higher oil prices, weaker risk appetite, and a late-quarter trade deficit.
As such, on a currency neutral basis, the FNB Quanto ETNs (without currency exposure) outperformed the Compo ETNs (with currency exposure). Of the 32* FNB ETNs that existed at 31 March, five had a negative quarter, while the rest ended in the green.
Palo Alto Networks, ASML and Alphabet were among the strongest performers, driven by continued investor enthusiasm around AI. Palo Alto benefitted from surging cybersecurity demand, ASML from strong expectations for advanced semiconductor equipment demand, and Alphabet from improving confidence in the monetisation of its AI, cloud and advertising businesses. Novo Nordisk and Eli Lilly also outperformed on strong demand expectations for obesity and diabetes therapies. On the downside, Netflix was the weakest performer as concerns grew around slowing engagement growth, softer forward guidance and increased competition in streaming, while Palantir declined on profit-taking and investor caution toward highly valued AI software companies. Adobe continued to weaken amid concerns over the impact of generative AI on its competitive position, monetisation prospects and long-term growth outlook.
*In May, FNB listed five new ETNs, providing JSE investors with exposure to Advanced Micro Devices (AMD), the MSCI Emerging Markets Index, MSCI Japan Index, MSCI World Ex USA Index, and the EURO STOXX 50 Index, broadening local access to global technology, emerging markets, Japan, developed markets outside the US, and leading Eurozone blue-chip companies.
Performance figures to 30 June 2026
