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:
    • Facebook
    • Amazon
    • Apple
    • Netflix
    • Google by Alphabet
  • Nvidia
  • Tesla
  • Twitter
  • Alibaba
  • Baidu

 

What's happening?

  • 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.

 


Disclaimer: This article has been prepared by Affin Hwang Asset Management Berhad (hereinafter referred to as “Affin Hwang AM”) specific for its use, a specific target audience, and for discussion purposes only. All information contained within this presentation belongs to Affin Hwang AM and may not be copied, distributed or otherwise disseminated in whole or in part without written consent of Affin Hwang AM. The information contained in this presentation may include, but is not limited to opinions, analysis, forecasts, projections and expectations (collectively referred to as “Opinions”). Such information has been obtained from various sources including those in the public domain, are merely expressions of belief. Although this presentation has been prepared on the basis of information and/or Opinions that are believed to be correct at the time the presentation was prepared, Affin Hwang AM makes no expressed or implied warranty as to the accuracy and completeness of any such information and/or Opinions. As with any forms of financial products, the financial product mentioned herein (if any) carries with it various risks. Although attempts have been made to disclose all possible risks involved, the financial product may still be subject to inherent risk that may arise beyond our reasonable contemplation. The financial product may be wholly unsuited for you, if you are adverse to the risk arising out of and/or in connection with the financial product. Affin Hwang AM is not acting as an advisor or agent to any person to whom this presentation is directed. Such persons must make their own independent assessments of the contents of this presentation, should not treat such content as advice relating to legal, accounting, taxation or investment matters and should consult their own advisers. Affin Hwang AM and its affiliates may act as a principal and agent in any transaction contemplated by this presentation, or any other transaction connected with any such transaction, and may as a result earn brokerage, commission or other income. Nothing in this presentation is intended to be, or should be construed as an offer to buy or sell, or invitation to subscribe for, any securities. Neither Affin Hwang AM nor any of its directors, employees or representatives are to have any liability (including liability to any person by reason of negligence or negligent misstatement) from any statement, opinion, information or matter (expressed or implied) arising out of, contained in or derived from or any omission from this presentation, except liability under statute that cannot be excluded.

Warning Statement: A Master Prospectus is available for the TradePlus NYSE® FANG+TM Daily (2x) Leveraged Tracker and TradePlus NYSE® FANG+TM Daily (-1x) Inverse Tracker, and investors have the right to request a copy of it. Investors are advised to read and understand the contents of the Master Prospectus dated 26 November 2019 before investing. The Master Prospectus has been registered with the Securities Commission Malaysia, who takes no responsibility for its contents. An electronic copy of the Master Prospectus can be obtained at Affin Hwang Asset Management Berhad’s website www.tradeplus.com.my. As with any forms of financial products, the financial products mentioned herein carries with them various risks. Investors are advised to consider the general and specific risks involved as stipulated in its Master Prospectus before investing. There are also fees and charges involved when investing in these funds, and investors are advised to consider the fees and charges carefully before investing. The price of units and distribution payable, if any, may go down as well as up and past performance of the funds should not be taken as indicative of their future performance. 

Licensing Disclosure Statement & Conditions: Source ICE Data Indices, LLC (“ICE Data”), is used with permission. “NYSE® FANG+™” is a service/trade mark of ICE Data Indices, LLC or its affiliates and has been licensed, along with the NYSE® FANG+™ Daily 2X Leveraged Index and NYSE® FANG+™ Daily 1x Inverse Index (“Indices”) for use by Affin Hwang Asset Management Berhad in connection with the TradePlus NYSE® FANG+™ Daily (2x) Leveraged Tracker and the TradePlus NYSE® FANG+™ Daily (-1x) Inverse Tracker (the “Product”). Neither Affin Hwang Asset Management Berhad nor the Product, as applicable, is sponsored, endorsed, sold or promoted by ICE Data Indices, LLC, its affiliates or its Third Party Suppliers (“ICE Data and its Suppliers”). ICE Data and its Suppliers make no representations or warranties regarding the advisability of investing in securities generally, in the Product particularly, or the ability of the Index to track general stock market performance. ICE Data’s only relationship to Affin Hwang Asset Management Berhad (“Licensee”) is the licensing of certain trademarks and trade names and the Index or components thereof. The Index is determined, composed and calculated by ICE Data without regard to the Licensee or the Product or its holders. ICE Data has no obligation to take the needs of the Licensee or the holder of the Product into consideration in determining, composing or calculating the Index. ICE Data is not responsible for and has not participated in the determination of the timing of, prices of, or quantities of the Product to be issued or in the determination or calculation of the equation by which the Product is to be priced, sold, purchased, or redeemed. Except for certain custom index calculation services, all information provided by ICE Data is general in nature and not tailored to the needs of Licensee or any other person, entity or group of persons. ICE Data has no obligation or liability in connection with the administration, marketing, or trading of the Product. ICE Data is not an investment advisor. Inclusion of a security within an index is not a recommendation by ICE Data to buy, sell, or hold such security, nor is it considered to be investment advice. 

ICE DATA AND ITS SUPPLIERS DISCLAIM ANY AND ALL WARRANTIES AND REPRESENTATIONS, EXPRESS AND/OR IMPLIED, INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, INCLUDING THE INDICES, INDEX DATA AND ANY INFORMATION INCLUDED IN, RELATED TO, OR DERIVED THEREFROM (“INDEX DATA”). ICE DATA AND ITS SUPPLIERS SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY WITH RESPECT TO THE ADEQUACY, ACCURACY, TIMELINESS OR COMPLETENESS OF THE INDICES AND THE INDEX DATA, WHICH ARE PROVIDED ON AN “AS IS” BASIS AND YOUR USE IS AT YOUR OWN RISK.