ETF Watch: Global X Targets Founder-Run Companies
Proposed ETF will invest in companies that are headed by the individuals that founded them.
A recent filing from Global X outlines the firm’s plans to launch an ETF that tracks companies for which the firm’s founder also serves as its chief executive officer. The Global X Founder-Run Companies ETF will track an index of up to 100 equal-weighted companies.
The fund’s underlying index selects its components from the Solactive U.S. Broad Market Index, ranking the founder-run companies in that particular universe by market capitalization. The resulting list is screened for liquidity, and the top 100 companies by market capitalization are selected for inclusion in the index. The number of components will be less than 100 if there are not enough companies to qualify as founder-run and meet the methodology’s liquidity screen, the prospectus says.
In February, according to a Solactive fact sheet, the index’s top five components included Netflix Inc. (4.56%), Nvidia Corp. (4.11%), JD.com Inc. (3.89%), SoftBank Group Corp. (3.75%) and Tencent Holdings Ltd. (3.73%). Information technology was the largest sector as of Sept. 30, 2016.
There are no similar ETFs currently trading, so the Global X fund will likely be the first of its kind when it launches.
The filing did not include a ticker, expense ratio or listing exchange.
Contact Heather Bell at [email protected].
