Global X’s ETFs gathered more than $1 billion in 2010, but could 2011 be as good?
Global X Funds, known for its emerging markets and commodities ETFs, came out of nowhere to gather more than $1 billion in assets in 2010. The relative newcomer to the ETF space, which launched its first fund in February 2009, is quickly making a mark with its knack for finding unexploited corners of the market.
IndexUniverse.com Managing Editor Olivier Ludwig caught up with Global X Chief Executive Officer Bruno del Ama to talk about the company’s success, as well as its latest filing to market two broad-based emerging markets growth and value ETFs ((NYSEArca: EMGX) and (NYSEArca: EMVX)). The offering amounts to a crafty way of competing for a slice of the hot emerging markets space without directly challenging either Vanguard’s MSCI Emerging Markets ETF (NYSEArca: VWO) or iShares’ MSCI Emerging Markets ETF (NYSEArca: EEM), which each have over $44 billion in assets.
Ludwig: Global X has been growing rapidly. Its assets under management more than quadrupled in 2010. Do you think growth in 2011 could be as impressive?
Del Ama: If 2011 looks a little bit like 2010, we’ll be thrilled. We think we are going to do well. We have a lot of good ideas. We are building a pipeline of products that are new. Obviously, the marketplace has been excited about our products and we’re going to introduce more of them. We think it will be a good year. Will it be as good? That would be great, but we’re not counting on it.
Ludwig: It’s a remarkable story. You now have nearly $1.3 billion in assets. There are many companies competing, and yet, why is it that Global X is rising? Is there any easy way to describe what you’ve done right or why you’ve been lucky?
Del Ama: I think it has to do with a lot of things that we do and how we do them. But obviously one of them is looking at products we believe in for the long term. When we think about products, we ask, “Will they do well in the next 10 to 15 years?” That’s the approach we use rather than trying to bring to market the flavor of the month. We don’t necessarily try to time the markets, but we certainly don’t want to come in at bad times. The timing of our products has been impeccable, so there’s definitely an element of luck there.
Other than that, marketing the products, looking at our distribution capabilities and being smart as to how we do things, that’s really it. Like in any good business, if you think about the client first, things tend to go right.
But, having said that, things have gone right more than we were anticipating and at a faster rate. We’re obviously thrilled. And you’re right, there are a lot of people in the industry, competitors of ours, who ask us: “How do you do it?”
We got a kick out of seeing things like Market Vectors changing the name on their “Nuclear ETF” to “Uranium-Nuclear ETF,” or filing for an Andean ETF shortly after we filed for one, clearly reacting to what we do. It’s been interesting to see how people are taking notice, and I guess copying us is the best form of flattery in a way.
Our philosophy isn’t going to change. The principals and the management of the company are also its shareholders. So we’re not looking to build something that is going to be a huge hit, and is finished in two or three years. We’re building something for the long term, so we can be patient. But if we grow more quickly than we expected, we’ll take it and reinvest in the business and bring in more resources and make sure we keep bringing products to market that our clients want.