The secret of FNB’s winning ETF 

FNB’s winning streak continues with its Top 40 Exchange Traded Fund (ETF) being recognised at the SALTA Awards for the second year in a row. Editor Sandy Welch spoke to Bheki Mkhize, CEO of FNB Wealth and Investments, who attributes this achievement to a combination of a skilled team, smart strategy and a clear commitment to delivering value for clients. 

“We’ve got a great team,” says Mkhize. “In the passive space, it’s all about small margins. It requires skill because if you trade too much, you increase friction costs, which can negatively impact performance. Managing trading and keeping tracking error to a minimum is crucial.” 

He notes that the growth of the Exchange Traded Fund (ETF) has also played a key role in its performance. “The more assets under management you have in the product, the easier it becomes to reduce tracking error and even generate some outperformance.,” he explains. “But this has been a consistent, long-term effort to provide a reliable solution for clients – one that does what it promises.” 

That consistency has fostered trust among investors and deepened the brand’s credibility in the market. “We’ve been doing this for a while, and clients understand where our ETF fits, either within a broader portfolio or as a standalone investment,” Mkhize says. “And it’s the team’s ability to get the best trading rates and keep costs low that really supports performance.” 

Standing out in a competitive market 

With the ETF space growing increasingly competitive, FNB is focused on integrated, client-centric solutions to stay ahead. “We differentiate by integrating the ETF into a broader value proposition,” says Mkhize. “For instance, we use our ETFs as building blocks within our unit trusts, blending active and passive strategies so that clients don’t need to decide how much to allocate to each.” 

This ETF is also accessible via FNB’s tax-free savings offerings, making it available to clients with smaller monthly contributions – while still reaping the benefits of long-term investing. “We also integrate it into our rewards programme,” he adds. “For example, clients who invest through a tax-free savings wrapper can earn eBucks rewards. It’s another way we try to encourage a culture of saving.” 

Breaking down barriers to entry 

One of FNB’s key strategies is making investing feel achievable, even for those with limited financial knowledge. “We’ve simplified the digital journey on our app and introduced products like Share Zero, which offers zero monthly account fees and zero brokerage on Exchange Traded Funds (ETF),” Mkhize explains. “That removes friction costs and makes it easier for people, especially those in lower-income brackets, to participate in the market.” 

FNB also places a strong emphasis on financial education. “Many people think investing is only for the wealthy or sophisticated,” says Mkhize. “We aim to change that by showing that even small, regular investments can make a big difference.” 

Global access, local simplicity 

Beyond local exposure, FNB is helping clients invest globally without the complexity of offshore banking. “We’ve launched Exchange traded Notes (ETNs) that allow clients to invest in global giants like Apple, Microsoft, Amazon, and Nvidia, from as little as R10,” says Mkhize. “These are available in rand, and clients can choose whether they want currency exposure or not.” This removes the need for foreign currency conversion or offshore allowances, further simplifying global investing for South Africans. 

Simplifying access with smart bundles 

FNB has taken a unique approach to making investing more accessible for everyday South Africans. One such innovation is ShareSaver, a bundled investment product. “ShareSaver is essentially a combination of the Top 40 ETF and the Midcap 60,” explains Mkhize. “You’re basically getting exposure to the top 100 companies in a bundled structure.” 

Rather than competing solely on a standalone Exchange Traded Fund (ETF), FNB builds value around them with bundled products and supporting tools, helping clients benefit from diversified exposure while minimising complexity. 

A digital-first investment experience 

FNB’s award-winning digital platform is central to its accessibility strategy. Mkhize highlights the importance of intuitive user journeys and proactive communication. “We’ve built simple onboarding journeys on our app, including a seven-day welcome followed by touchpoints over the first 90 days,” he says. Many assume investing is for the sophisticated or the rich. We educate clients that they can start with any amount. Everything makes a difference.” 

Broadening exposure through global tools 

FNB is also extending its global reach through innovative solutions such as ETNs and actively managed certificates (AMCs). “We have listed ETNs giving exposure to offshore companies like Microsoft, Apple, NVIDIA, and Amazon, from as little as R10,” says Mkhize. These instruments offer global access without the need for offshore allowances or complex FX transactions, another example of FNB’s inclusive investment approach. 

The AMC advantage 

The UBS FNB Global Equity Growth AMC, which received recognition at the recent awards, plays a key role in FNB’s active strategy. “We’ve created a few AMCs, two of which are offshore. They’re used as building blocks within portfolios rather than sold directly to clients,” Mkhize says. “Globally, AMCs are significant. We’ll likely see more local uptake, especially as independent advisers use them to offer custom portfolios with less friction and lower setup costs than unit trusts.” 

Supporting financial advisers 

FNB’s platform supports both retail clients and financial advisers, especially independents. “We want to make it easy for advisers to focus on advice while we handle the product,” Mkhize notes. 

Looking ahead, FNB is expanding into alternative investments, including private equity, infrastructure and credit. “We’ve already been recognised in this space, winning an award for Best Alternative Investments at the Global Private Banking Euromoney Awards,” he shares. 

The road ahead 

As the digital world evolves, FNB continues to invest in tools that enhance client experience. “We’re constantly looking at how we improve. AI will help us go even further in personalising and enhancing the experience,” says Mkhize. With offshore investing expected to remain a dominant theme, FNB has new initiatives planned for later this year. “There’s more coming, especially in the offshore space, which will resonate with both clients and independent advisers,” he concludes.