Global X Launches Gold and Oil Equities ETFs

Global X Funds has launched the Global X Pure Gold Miners ETF (NYSEArca: GGGG) and the Global X Oil Equities ETF (NYSEArca: XOIL).

The exchange-traded funds (ETFs) expand the issuer’s global commodity funds suite and are aimed at giving investors a purer play in gold and oil equities, respectively, by following the indexing methodology of the Solactive Indexes.  

The Global X Pure Gold Miners ETF tracks the Solactive Global Pure Gold Miners Index, which is comprised of global companies involved in the gold mining industry. Only companies that generate the vast majority of their business from gold mining are eligible to be included in the Underlying Index. As of 2010 revenue data, over 95% of the revenues from the companies in the Underlying Index were derived from gold mining, according to Structured Solutions AG.   As of March 10, 2011, the three largest components of the index were Gold Fields, Polyus Gold, and Kinross Gold Corp.   

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The Global X Oil Equities ETF tracks the Solactive Global Oil Equities Index, which is designed to measure the performance of oil companies globally that are highly correlated with the spot price of oil. As of March 10, 2011, the three largest components of the index were Forest Oil Corp., Newfield Exploration Co., and Apache Corp. 

Advisers Say Global Investments are Under-Weighted

A Franklin Templeton Investments survey found 71% of advisers believe the greatest investment opportunities over the next decade will be outside the U.S. 

Of the 556 financial advisers in the U.S. who responded to Franklin Templeton’s survey, 92% believe that global resources and expertise will be essential to successfully manage investments this decade. The survey pointed to a flattening global economy and growth in emerging markets as causes behind this trend (see “Bullish Behavior towards Global Equities at New Highs”).

Sixty-three percent of U.S. advisers think that their clients’ portfolios are currently under-weighted in global funds and 83% expect the average amount of their clients’ investments to increase in global funds over the next three to five years.

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“We are witnessing a shift where financial advisers and investors increasingly consider global investing as a part of their core portfolio,” said David McSpadden, senior vice president of Global Advisory Services for Franklin Templeton Investments. “Continued expansion of international trade and growth of a new consumer class will drive change over the next decade. Financial advisers recognize these shifts and are selecting investments positioned to take advantage of opportunities fueled by global growth.”

 

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