New Investec structured product helps investors maintain tech exposure with downside protection
The Nasdaq 100’s tech-led rally has gathered remarkable momentum, with the index rising from roughly 25,000 in early 2026 to multiple record highs, crossing the 29,000 mark for the first time in May.
The longer-term picture is equally striking: the index is up 124% over the past five years.
The primary driver of this performance has been the artificial intelligence (AI) supercycle driven by the major hyperscalers, combined with robust earnings from megacap technology stocks, particularly the “Magnificent Seven” – Apple, Microsoft Corp., NVIDIA Corp., Google parent Alphabet Inc., Amazon.com Inc., Meta Platforms Inc. and Tesla Inc.
Strong fundamentals
The potential for continued growth remains strong, as prevailing tech sector fundamentals suggest that today’s market structure differs meaningfully from previous periods of excessive market optimism, with the sustained rally fundamentally supported by real and compounding profitability.
Furthermore, the major hyperscalers continue to generate massive free cash flow, which is the primary funding source for the massive capex budgets driving the AI and data infrastructure build out.
The financial resilience shown in the corporate revenue of the Nasdaq’s main constituent tech companies, despite macroeconomic headwinds, coupled with massive quarterly earnings beats, suggest the rally has more room to run.
Investing in the trend
Offering a viable solution to gain exposure to this investment theme, Investec has launched a structured term product that references the Nasdaq 100 and is linked to the index’s performance.
The Investec ZAR Nasdaq 100 Geared Growth Flexible Investment Note is a three-year and eight-month structured investment that provides investors with exposure to the tech sector, allowing them to participate in any continued AI-led growth while offering capital protection benefits.
“The product creates a structured payoff profile, providing exposure to the growth of the index, multiplied by a participation of 125%, up to a growth cap of 60% over the term,” explains Brian McMillan from the Investec Structured Products team.
This geared effect translates to a maximum return of 75% (125% x 60%) in South African rand (ZAR) over the term, equivalent to a maximum annualised return of 16.5% per annum.
Click here to learn more about Investec Nasdaq 100 Geared Growth
Addressing investor concerns
However, should the outlook change, McMillan says the capital protection feature in the structured product addresses concerns investors may have about the length and durability of AI-driven growth in the tech sector.
“If the index does not perform over the period, investors get 100% capital protection if the investment is held for the full term, provided the index does not decrease by more than 40% on the final valuation date,” elaborates McMillan.
This downside protection on outright exposure offers a significant advantage over direct investments in the market through exchange-traded funds.
As such, with its focus on capital preservation and growth potential, the Investec ZAR Nasdaq 100 Geared Growth Flexible Investment Note may provide a suitable investment proposition for local investors looking to remain invested in tech sector growth stocks, while boosting offshore exposure without drawing on their annual single discretionary allowance (SDA).
Participating in the Investec ZAR Nasdaq 100 Geared Growth Flexible Investment Note requires a minimum investment of R100,000. Applications close on 10 July 2026, and the note will list on the JSE on 16 July 2026. The final valuation date is 7 March 2029.
For full regulatory disclosures, please click here.
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