Global X, the New York-based exchange-traded fund firm known for its developing-market and natural resources funds, filed paperwork to market 12 ETFs, including country-specific strategies, dividend-seeking ETFs as well as off-the-beaten-path funds such as a potash ETF.
The funds would add to Global X’s growing roster of ETFs that carve out relatively unexplored niches of the market, in a strategy that has served the company well so far, as it raked in $1 billion in new assets in 2010 alone. Some of its latest offerings include the market’s first Andean ETF as well as broader emerging markets fare.
The planned lineup of country ETFs focuses largely on small-cap names, and each tracks corresponding Structured Solutions’ Solactive indexes through sampling strategies. The exception is Global X’s planned U.K. fund, which will invest in the midcap tier of market capitalization and track a FTSE benchmark.
The single-country ETFs and the indexes they will track are:
- Global X UK Mid-Cap ETF, the FTSE 250 Index, which comprises the next 250 U.K. companies by market capitalization not included in the FTSE 100 Index
- Global X Germany Small-Cap ETF, the Solactive Germany Small Cap Index
- Global X Mexico Small-Cap ETF, the Solactive Mexico Small Cap Index
- Global X Hong Kong Small-Cap ETF, the Solactive Hong Kong Small Cap Index
- Global X Singapore Small-Cap ETF, the Solactive Singapore Small Cap Index
- Global X South Korea Small-Cap ETF, the Solactive South Korea Small Cap Index
- Global X Taiwan Small-Cap ETF, the Solactive Taiwan Small Cap Index
Some of Global X's small cap country offerings would go head to head with similar funds from IndexIQ's, such as IQ South Korea Small Cap ETF (NYSEArca: SKOR) and IQ Taiwan Small Cap ETF (TWON). IndexIQ also has a small cap Hong Kong and Singapore funds in registration.
In the filing, Global X also outlined the yield-focused ETFs Global X Super Dividend and Global X Canada Preferred. Both funds will also track Solactive benchmarks and use sampling strategies; meaning the funds won’t own all of the securities in their underlying indexes.
The super-dividend ETF will tap into some of the highest-dividend-yielding securities worldwide by replicating the Solactive Global Super Dividend Index. The companies are equal-weighted in the portfolio, but there are concentration limits by industries and regions, the filing said.
The Canadian preferred fund will invest in Toronto Stock Exchange-listed preferred stocks from various Canadian issuers. The select group of stocks pays a specified dividend that takes precedence over any payments made to common stockholders in the case of liquidation, the company said in the filing. These stocks perform similarly to fixed-income securities.
Finally, the company listed the following three niche equities ETFs that will also follow corresponding Solactive indexes, but these funds will use a replication strategy:
- Global X Fertilizers/Potash ETF will invest in the largest and most liquid companies involved in the fertilizer industry globally.
- Global X Rare Earths ETF will invest in companies involved in the rare earth elements and earth metals industry, which include 17 different chemical elements such as scandium, holmium and cerium, all of which play a key role in the high-tech segment, such as batteries, cell phones and the alternative energy industry.
- Global X Strategic Metals ETF will invest in global companies tied to strategic metals such as gallium, bauxite, cobalt and some 16 other metals, all of which are of economic importance but face supply risk.
The new funds would add to Global X’s commodities lineup, which include a $215 million uranium ETF (NYSEArca: URA), a $189 million lithium ETF (NYSEArca: LIT) and a $5 million aluminum ETF (NYSEArca: ALUM), among others.
Global X will advise all the funds. While no tickers or fees for any of the funds were disclosed in the prospectus filed with the Securities and Exchange Commission, the company did say that it might use derivative instruments in all the strategies.