By Zimele Mbanjwa
The FNB Exchange-Traded Notes (ETNs) ended the first quarter of 2026 mostly lower as the period proved to be challenging for global equity markets. The quarter was defined by the escalation of the military conflict involving the United States (US), Isreal and Iran, which sent crude oil prices surging above $100 per barrel and triggered widespread concerns about stagflation across global economies. Investors also navigated shifting central bank policy expectations and significant volatility in the technology sector, particularly AI and semiconductor stocks.
The MSCI World Index declined 3.5% for the quarter. Developed markets sold off, with US equities retreating (S&P 500: -4.4%) and European benchmarks also lower (Euro Stoxx 50: -3.5%). Emerging markets fared better (MSCI EM: -0.1%) despite pronounced weakness in China (MSCI China: -8.8%), where pre-existing growth, tariff and AI-related concerns were exacerbated by risk-off sentiment. Major central banks kept policy rates unchanged but struck increasingly hawkish tones amid elevated inflation risks from higher energy prices. All the while, the rand weakened by approximately 2.1% against the US dollar, as global risk aversion and oil price shocks weighed on emerging market currencies. As such, the FNB Quanto ETNs (without currency exposure) underperformed the Compo ETNs (with currency exposure).
Of the 32 FNB ETNs, 28 had a negative quarter, while only four ended in the green. The outperformers were ASML (+22%), who reported record quarterly orders that far exceeded expectations, the Global Clean Energy ETF, which gained 8.8% on optimism around AI-driven electricity demand, Coca Cola (+7.8%), which saw shares rising after an earnings beat and positive management commentary - despite conservative initial EPS guidance, and McDonald's (+0.7%), who closed just above the line as US same - store sales grew at the fastest pace in over two years despite growth being expected to slow in early 2026.
The worst performers were Adobe (-32.1%) and Novo Nordisk (-29.5%). Adobe was weighed down by broader software sector weakness as rising concerns over AI disruption continued, raising questions about the durability of traditional software business models. Novo Nordisk, meanwhile, faced growing competition in the obesity drug market.
