Global X, the New York-based fund provider focused largely on
commodity and emerging markets, filed paperwork with the Securities
and Exchange Commission to launch the first-to-market ETF focused
on social media, recalling ultra-specific smart phone and cloud
computing ETF strategies rolled out by First Trust.
The Global X Social Media Index ETF will be based on the
Solactive Social Media Index, created by Germany-based Structured
Solutions AG. The ETF will invest in securities from companies
involved with social networking, file sharing and other Web-based
media applications, the filing said.
The new ETF would add another wrinkle to the growing world of
finely themed ETFs linked to the Internet, which included First
Trust's Dow Jones Internet Fund (NYSEArca:FDN), which has gathered
nearly $725 million in assets and is now the firm's biggest
More recently, First Trust has rolled out a smart phone fund
(NasdaqGM:FONE), as well as the First Trust Cloud Computing ETF
(Nasdaq:SKYY), which has already gathered more than $48 million in
assets. UBS also rolled out two ETNs this week that focus on
The Inner Workings
Global X said in the filing that social media companies are
highly dependent on Internet companies, and are closely related to
the technology sector. They also are often smaller, less
experienced and are doing business in a rapidly changing
environment, the filing said.
"Social media companies face risks related to the technology
industry," the company said in the filing about some of the fund's
main risks. "Technology company stocks, particularly those involved
with the Internet, have experienced extreme price and volume
fluctuations that often have been unrelated to their operating
The Solactive index underlying the ETF is a free-float
market-capitalization-weighted index that screens for liquidity.
While much of the ETF's portfolio will consist of ADRs and GDRs, as
much as 20 percent of the pie could be allocated to derivative
instruments such as futures, options and swap contracts, the filing
Global X is behind other one-of-a-kind niche funds that include
a farming ETF, a fishing ETF and a waste management ETF, to name a
few. The company had $1.73 billion of assets across its various
ETFs as of July 21, according to data compiled by
Global X didn't name the proposed fund's trading symbol or its
annual expense ratio.
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