NEW YORK, Nov. 7, 2013 /PRNewswire/ -- Global X Funds, the New York-based provider of exchange-traded funds (ETFs), today launched the Global X Next Emerging & Frontier ETF (NYSE Arca: EMFM). This new product will provide investors with access to 35 countries exhibiting high growth potential and favorable demographical trends that may stimulate their rise as economic powers. Importantly, the index does not include equities from the BRIC countries (Brazil, Russia, India, and China) and other, more advanced economies like South Korea or Taiwan.
The Global X Next Emerging & Frontier ETF tracks the Solactive Next Emerging & Frontier Index and has exposure to attractive economies such as the Philippines, Nigeria, Chile, Panama, Pakistan and the Czech Republic. Countries included in the index represent 24% of the world's population, but just 12% of the world's gross domestic product and 8% of the world's equity market cap.
Based on the young populations present in these countries, Global X expects these countries to generate more competitive labor forces that likely will become the world's major supplier of low-cost labor. The firm also expects these countries to provide low correlations to both developed markets and each other, since they are driven by domestic-focused sectors including agriculture, construction and local banking. The index incorporates a capping mechanism to ensure diversification across sectors and individual countries.
"The Next Emerging & Frontier ETF offers exposure to specific economies that we expect will experience a long period of high growth rates, similar to what the BRIC nations experienced over the past 15 years," said Bruno del Ama, chief executive officer of Global X Funds. "Investing in emerging markets continues to be an important strategy for portfolio diversification and growth, but investors must now look beyond more mature economies to regions with accelerating growth rates and expanding populations. This is because 'traditional' emerging market investments have begun to slow down and are too closely correlated with developed markets."
"While emerging and frontier markets may provide ample opportunity for growth, many individual countries and regions are concentrated in particular sectors and have only a handful of liquid names," added Justin Young, Head of Capital Markets. "The Next Emerging & Frontier ETF was designed specifically to address these challenges by providing broad exposure to 35 countries and utilizing caps and liquidity thresholds in an effort to ensure diversified, high quality holdings."
EMFM complements the Global X suite of frontier and targeted emerging market ETFs, which includes the Global X Colombia ETF (GXG) and Global X Nigeria Index ETF (NGE).
ABOUT GLOBAL X FUNDS
Global X is a New York-based sponsor of exchange-traded funds that facilitates access to investment opportunities across the global markets. With $2.5 billion in managed assets and over 100,000 investors from more than 100 countries as of October 31, 2013, Global X offers exchange-traded funds that target Income, International, Commodity Producers, Industry, and Alternative fund suites. For more information about these exchanged traded funds, please visit www.globalxfunds.com.
Investing involves risk, including possible loss of principal. International investing may involve risk of capital loss from unfavorable fluctuations in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Frontier markets generally have less developed capital markets than traditional emerging market countries, and, consequently, the risks of investing in foreign securities are magnified in such countries. These countries are subject to potentially significant political, social and economic instability, which could materially and adversely affect the companies in which the Fund may invest. The Fund invests in securities and markets that are susceptible to fluctuations in certain commodity markets. Commodities represent a significant portion of the Latin American and Middle Eastern economies. Any negative changes in commodity markets could have a great impact on these economies. Unlike most exchange-traded funds, the Fund intends to effect all creations and redemptions partially for cash, rather than in-kind securities. As a result, an investment in the Fund may be less tax-efficient than an investment in a more conventional ETF. Diversification does not prevent all investment loss.
This information is not intended to be individual or personalized investment or tax advice. Please consult a financial advisor or tax professional for more information regarding your tax situation.
The information presented here is for informational purposes only. It was prepared on information and sources that we believe to be reliable, but we make no representations or guarantees as to the accuracy or the completeness of the information contained herein.
Carefully consider the Funds' investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Funds' prospectus, which may be obtained by calling 1-888-GX-FUND-1 (1.888.493.8631), or by visiting www.globalxfunds.com. Read the prospectus carefully before investing.
Global X Management Company LLC serves as an advisor to the Global X Funds. The Funds are distributed by SEI Investments Distribution Co., which is not affiliated with Global X Management Company or any of its affiliates. Solactive Indexes have been licensed by Solactive AG for use by Global X Management Company LLC. Global X Funds are not sponsored, endorsed, issued, sold, or promoted by Solactive AG, nor does this company make any representations regarding the advisability of investing in the Global X Funds.
SOURCE Global X Funds