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Market | Commodities

A Guide to Investing in the New AFEX FETC

Dec 14, 2022   •   by   •   Source: AFEX   •   eye-icon 683 views

Inflation is at a historic high and everyone is feeling it! it is unleashing crippling cost of living on everyday essentials, however, smart investors are growing their wealth and hedging against the current wave of inflation by investing in diversified investment vehicles that give a greater return. One of such instrument is the newly launched FairTrade Exchange Traded Commodities (FETC). It is a game-changing and cost-efficient way to reap the rewards of the market in folds.

 

What is FETC in simple terms?

FETC represent a basket of commodities that allows investors regardless of their risk appetite level to invest in a unit or more of a contract that is a mixed bag of commodities, where they then gain cumulative returns on everything in the bag.


The FETC can be likened to a pack of small chops, which has samosa, puff-puff, spring roll, chicken, and gizzard, which are sold as a pack. One could be great, but together, we have a pack of small chops that bangs. Hence, FETC is a mixed pack of goodies just like your small chops pack.

 

In the FETC basket, you will find commodities like Maize, Sorghum, Paddy Rice, and Soybean to be sold at N1000 per unit with a minimum guaranteed return of 15% over a period of 270 days. 

 

The instrument is designed to provide investors with exposure to commodities and is structured to maximize the risk-return balance of the underlying commodities. It is structured to be traded on an Exchange, providing more transparency on the value of the FETC.

 

If I invest, what do I stand to gain?

Currently, the performance of the commodities market has shown incredible resilience and growth despite the downturns witnessed in the broader investment landscape in Nigeria. Investing in instruments like FETC will give massive returns compared to traditional asset classes. 

 

In 2020, the first iteration of the FETC returned 68% to the investors, 270 days after listing. While in 2021, the second iteration was listed in two tranches, both at ₦1,000/unit; the first tranche matured after 270 days returning 31%; the second tranche which was listed on the back of increased demand for the product by investors, returned 20% after 233days.

 

Here are a few reasons why you should invest in FETC:

  • It is super easy to invest in! You buy and hold for a period of 270 days then you receive your ROI.
  • It is a form of hedge against inflation.
  • It is affordable! A unit of FETC goes for just N1,000.
  • It has a guaranteed minimum return payable of 15% at maturity!

 

When it will be listed?

FETC’s opening date is 15th December 2022 and will close 2 weeks after the listing date. Click on the link - https://ps1z71js212.typeform.com/to/VQOUwFja  to join the waiting list.

 

How can I invest in FETC?

To get started, signup/login on to https://comx.afexnigeria.com/, fund your wallet, and proceed with the following steps:

  • Click on “Market” on the home page
  • Click on “Trade” to view different commodities available
  • Click “Buy” under your preferred choice of commodity
  • View historical price data of commodity and click “Buy” again
  • Input the Number of units to trade
  • Input preferred unit price to trade between the minimum and maximum price band
  • Click on “Preview” to preview your intended trade
  • Confirm “Buy” by clicking “Buy Now”
  • Wait to get matched
  • You’ll get a Contract Note for your trade

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