Six China Sector & Seven EM Country ETFs Proposed

September 21, 2009

Global X proposes new sector funds for China, as well as seven new single-country emerging markets ETFs. 

Exchange-traded fund provider Global X Funds filed a prospectus on Sept. 10 with the Securities and Exchange Commission to launch six new ETFs, which will track different sectors of the Chinese economy.

The funds are: Global X Consumer, Global X China Energy, Global X China Financials, Global X China Industrials, Global X China Materials and Global X China Technology.

The funds will be 80 percent invested in American Depositary Receipts and Global Depositary Receipts, and 20 percent invested in swaps and options contracts.

The funds will employ strategies to replicate to 95 percent accuracy the performance of the underlying FTSE-created sector-specific indexes they follow after fees and expenses, and will issue creation units in blocks of 50,000 shares. Global X did not mention what management fee would be charged for investing in the funds.

The new ETFs are a breakthrough for the industry, since for the first time investors will be able to gain access to specific sectors of the Chinese economy, according to market watchers.

“What’s unique about these funds is that they will enable investors to specifically invest in specific Chinese sectors, as opposed to choosing a broader emerging market or China ETF that’s heavily invested in a range of sectors,” wrote Tom Lydon of Global Trends Investments in a recent note.

Global X Funds also filed to register seven additional funds, which aim to track foreign markets that are currently hard to access for U.S. investors. The funds are: Global X Denmark, Global X Emerging Africa, Global X Finland, Global X Norway, Global X Pakistan, Global X Poland and Global X United Arab Emirates. (You can read the filing here.)

The Danish, Finnish and Norwegian funds follow the recently-launched Global X FTSE Nordic 30 (NYSEArca: GXF), a fund which is heavily-weighted in Swedish equities (46 percent). Since its launch on Aug. 20, shares in GXF have leaped 11.9 percent in value.

The provider’s other ETF, Global X InterBolsa FTSE Columbia (NYSEArca: GXG), is also doing well since its debut in February, up 86.5 percent.

-- This report was filed by's senior reporter Daniel Harrison.

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