Sygnia FAANG Fund

Sygnia FAANG Fund

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The financial world is buzzing with the news that South African investors now have the opportunity to gain access to the most popular and best-performing global technology stocks, previously difficult for South African investors to access, through the Sygnia FAANG fund, but what does this actually all mean.

Let’s explore exactly what the FAANG fund is. The FAANG acronym stands for Facebook, Amazon, Apple, Netflix and Alphabet’s Google, arguably five of the world’s largest giants in the technology space – and previously completely inaccessible to the South African market. The Sygnia FAANG Plus Equity Fund is the first investment vehicle of its kind in South Africa, offering local investors concentrated access to the world’s leading disruptors across social media, technology, cloud storage, online retail and entertainment. It’s a benchmark in South African investing and has the potential to change the entire investment game for South Africans interested in becoming global players.

“Given Sygnia’s positioning as an innovative fintech market disruptor, we thought it appropriate to offer local investors the opportunity to invest in global giants at the forefront of the 4th Industrial Revolution”, says Sygnia CEO Magda Wierzycka.

These incredibly influential global technology stocks have historically generated strong returns for investors, in fact, the sheer scale and size of these networks have allowed individual companies to disrupt entire industries. The fact that South African investors now have exposure to these companies as well as the staggering earnings growth potential that they aim to achieve means that the way we invest needs to revolutionise along with what we are investing in.

So, that raises the question of whether FAANG stocks are a smart investment. The answer, as always, depends upon your individual situation and investing goals, but beyond that, there are some things you need to know about investing in FAANG to avoid potential catastrophe.

  • These stocks won’t always go up. It’s easy to look now and wonder how on earth these stocks could ever be anything but hot commodities, but it happens all the time. Make sure that you are ready for the ebb and flow that is going to come with investments of this nature. Treat these investments like any other stock. Management and execution are crucial.
  • know that these stocks tend to move together. Yes, only Apple sells iPhones, but more people buying iPhones means more people using Facebook, and more people using Netflix, and so on. If you want to own all five FAANG stocks, you are going to need to diversify your portfolio elsewhere. From a diversification standpoint, these stocks are all the same.
  • Don’t think that you are “special” in knowing about these companies. These are worldwide brands that are closely followed by every kind of investor, from the guy looking to grow his son’s university fund, to billionaire professional players – these stocks are hot, and everyone is jumping on this bandwagon.

We are not here to say whether FAANG investing is a good idea or a bad idea, but, just like any other investment decision, thoughtful deliberation is required. It is important to remember that although it seems like a crazy idea to imagine a word without these technology titans, FAANG stocks are a good investment for the long-term, but they aren’t magic. They need to be monitored, and gains should be taken along the way, just like any other stock.

For sound financial planning advice, come chat to one of our experts – we have our fingers on the global pulse and can offer you our views on this kind of disruptive investing so that you’re always fully armed when making life changing financial decisions.