Chart of the week

Individual stock exchange-traded notes (ETNs) traded on the Namibian Stock Exchange and Johannesburg Stock Exchange: an ETN is a type of security (unsecured debt obligation) issued by a financial institution (currently only FirstRand Bank in Namibia) and can be traded through a stockbroker.

ETN prices are determined by the performance of the instrument it is tracking. Investors do not physically own shares of that company, but they do have exposure to the company’s performance.

The listed ETNs are compo notes – meaning they take the exchange rate movements between the US dollar and South African rand into account. ETN returns are pure capital – they pay no interest, dividend or coupon.

All individual stock ETNs seen in the chart can be traded in Namibia.

The volatility in these securities, coupled with the higher volume supplied in the JSE, moves portfolios like no other equity in Namibia in such a short time (for greater or worse), says Liaan Burger of Cirrus Capital.

Berkshire Hathaway stands out as the biggest gainer so far, with an overall return of 127% over the lifespan of the security.

There are also basket-weighted stocks – iShares Core MSCI World, and UBS MSCI World Socially Responsible. Both the individual stock and basket-weighted stock ETNs can be traded through Cirrus Securities (Pty) Ltd stockbrokers.