who can look past Nigeria's notorious reputation as a center for
royal online money transferring schemes, Global X Funds has
rolled out the first ETF investing in the African country.
TheGlobal X Nigeria Index ETF (
), with 28 holdings, started trading on the
stock market today
with the ticker symbol NGE. It has an annual management fee of
0.68% of assets.
"Nigeria is the biggest oil producer on the continent and
continues to grow its regional influence,"
said in a statement. "As reforms in business regulation and
capital markets continue to progress, Nigerian companies have the
potential to expand both within their domestic market and
Nearly two-thirds of the 160 million residents are under age
25 and entering their peak working and spending years. The
government plans to privatize 17 power companies to increase
competitiveness and is reforming the energy industries to
encourage growth, according to Global X.
Nigeria attracted $8.9 billion in foreign direct investments
-- the most in Africa -- last year. The government aims to
increase FDI to $16 billion this year, including massive
infrastructure projects from Qatar and China.
The MSCI Nigeria Index rallied 18% year to date and an
astounding 80% the past 12 months, according to MSCI. It's
returned an average annual 13% the past three years while losing
an average annual 11.5% the past five years. On a 10-year basis,
it's returned an average annual 12%.
Investment risks include changes in oil prices and
"expropriation and/or nationalization of assets, confiscatory
taxation, political instability, including authoritarian and/or
military involvement in governmental decision-making, armed
conflict, the impact on the economy as a result of civil war, and
social instability as a result of religious, ethnic and/or
socioeconomic unrest and, in certain countries, genocidal
warfare," Global X wrote. "The economic development of Nigeria
has been significantly hindered by military rule, mismanagement,
corruption and ethnic conflict."
New Path To Central Asia And Mongolia
Global X also launched WednesdayGlobal X Central Asia &
Mongolia Index ETF (
), offering exposure to Kazakhstan, Mongolia, Turkmenistan,
Kyrgyz Republic and Tajikistan. It includes companies based in
Russia, Canada, the U.K. and Sweden that do a great deal of
business in the region.
"The region has become a major exporter of oil, copper, gold,
silver, coal, uranium and cotton,"
said in a statement. "China has emerged as a key destination for
these resources, and has been investing heavily to develop energy
and transportation infrastructure in the region."
Trade between Central Asia and China, the world's largest
natural resources consumer, grew an average annual 25% between
1992 and 2010, according Global X. China has pledged to loan
Central Asian countries $10 billion to develop roads, railroad
and energy projects.
AZIA has 22 holdings and charges a gross annual management fee
of 0.69% of assets.
The MSCI Kazakhstan Index returned 7.4% year to date, while
losing 3.14% in the past year. It lost an average annual 8.8% and
10% in the past three and five years. There are no data going
back 10 years. MSCI doesn't have indexes tracking Mongolia,
Turkmenistan, Kyrgyz Republic or Tajikistan.
Global X Nigeria ETF Sector Weightings:
Consumer discretionary, 13.13%
Consumer staples, 11.53%
Basic materials, 3.75%
Top 10 Holdings And Percentage Weightings:
Guaranty Trust Bank, 8.59%
First Bank of Nigeria PLC, 7.84%
Zenith Bank PLC, 6.89%
Nigerian Breweries PLC, 6.37%
Saipem Spa, 4.50%
Subsea 7, 4.50%
TGS-Nopec Geophysical Co., 4.50%
United Bank for Africa PLC, 4.50%
Nestle Nigeria PLC, 4.50%
Access Bank PLC, 4.50%
Global X Central Asia & Mongolia Index ETF Country
United Kingdom, 4.75%
Kyrgyz Republic, 4.75%
Basic materials, 43.61%
Top 10 Holding And Percentage Weightings:
KazMunaiGas Exploration Production, 10.32%
Kazakhmys PLC, 9.77%
Eurasian Natural Resources Corp PLC, 9.25%
Dragon Oil, 5.90%
Kcell JSC, 4.90%
Halyk Savings Bank of Kazakhstan, 4.75%
Zhaikmunai LP, 4.75%
Centerra Gold, 4.75%
Dundee Precious Metals Inc, 4.75%
Bank of Georgia Holdings PLC, 4.75%
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