Have you seen the performance of the NYSE FANG+ Index? The Index, which tracks the performance of 10 of the most renown tech-related companies listed on the US stock exchange, has recorded impressive returns since the start of the year – leaving its peers in the dust.
What is NYSE FANG+ Index?
- The NYSE FANG+ Index is an index that tracks the performance of 10 of the most renown tech-related companies listed on the US stock exchange
- The index has equal weightage into all 10 stocks, so it holds equal exposure into the following companies:
- Tech-related companies have continued to enjoy a strong performance in its stock price, leaving the index leaping ahead of broader equity markets globally.
- Better than expected earnings results have even pushed some of these companies’ stock price to new highs.
- Tesla Inc, for one, has been dominating the headlines in the financial world as its stock price continues to rally – recording a gain of 77% (in MYR terms) since the start of this year to 5 February 2020 – outperforming every other stock in the S&P 500.
- The stock price, which started the year at USD 418.33 per share, closed at USD 734 per share on 5 February, slipping marginally after it breached the USD 900 mark the previous day.
- The rapid rise in its stock price has propelled the company into the billion dollar boys club, with market cap now nearing USD 150 billion.
- Tesla released better than expected revenue, and earnings per share – leading some analysts to expect greater things from the electric vehicle maker.
- Demand has continued to soar for the Tesla vehicles as talks of climate change become more widespread.
- Production issues are expected to be addressed with the completion of its Gigafactory in Shanghai, an addition to the existing factories it already has in the US.
- Apple Inc also saw its stock price hit a new record high this year after the release of its earnings results.
- This was largely supported by a strong quarterly revenue of USD91.8 billion, a 9% rise from its previous quarter.
- The company saw better sales coming in from the international market, which accounted for 61% of its quarterly revenue.
- Strong demand were seen coming from its latest phone release, the iPhone 11, as well as other services & wearables.
How do i gain exposure to the index?
- With the companies listed in the US, investors would be able to individually purchase the 10 stocks for their portfolio. (Based on the closing price of 5 February, buying 1 share of each company would cost you approximately USD5,800.)
- However, there is an easier way through an Exchange-Traded Fund. Through an ETF, you will be able to:
- Gain access to these foreign stocks through a single trade on a Malaysian counter listed on Bursa,
- Make their investments in Malaysian Ringgit, and
- Trade during Malaysian trading hours.
- The TradePlus NYSE FANG+ Daily (2x) Leveraged Tracker (Bursa stock code: 0830EA) is an ETF that is listed on the main market of Bursa Malaysia. (Investors are able to gain access for less than RM600)
- The ETF provides investors with a 2x leveraged exposure into the index, thus the opportunity to gain access at 50% of your actual investment value. (Do note that the minimum trading lots at Bursa is 100 units)
- Think that the index may have gone up too fast too quickly, and may be time to see a correction? Fret not. There is also an ETF for you. The TradePlus NYSE FANG+ Daily (-1x) Inverse Tracker (bursa stock code: 0831EA) is an ETF that is also listed on Bursa Malaysia, and provides investors with a 1x inverse return to the NYSE FANG+ Index.
- The NAV for 0830EA, and 0831EA was RM5.58, and RM3.27 respectively as of 5 February 2020.
- The 0830EA closed on 5 February at an NAV of RM5.58, providing the ETF with a YTD return of 22.6%, and a since inception return of 39.5%.
- The 0831EA whereas, closed on 5 February at an NAV of RM3.27, providing the ETF with a YTD return of -12.1%, and a since inception return of -18.3%.
A look at the performance of the NYSE FANG+ Index, the FANG+ stocks, and its peers
Performance of the FANG+ stocks
Performance of the NYSE FANG+ Index against major indices
Source: Bloomberg as at 5 February 2020. Returns are quoted in MYR terms.
Interested to add some exposure for your portfolio?
- Though structured like a unit trust fund, ETFs can be traded like a stock on the Bursa’s stock exchange.
- Trading of ETF units are done through a broker, thus an investor would first be required to have a brokerage account before being able to trade.
- Live trading prices can be obtained directly on Bursa’s website here.
- Read more about what ETFs are, and how they are traded by clicking here.
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