Global X Launches First Nigeria And Mongolia ETFs

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For investors 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 ( NGE ), 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," Global X 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 internationally."

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 ( AZIA ), 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," Global X 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:

Financials, 41.3%

Energy, 24.32%

Consumer discretionary, 13.13%

Consumer staples, 11.53%

Industrials, 5.98%

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%

Other, 43.31%

Global X Central Asia & Mongolia Index ETF Country Weightings:

Kazakhstan, 46.09%

Russia, 14.00%

Mongolia, 13.96%

Turkmenistan, 5.90%

Canada, 4.75%

United Kingdom, 4.75%

Sweden, 4.75%

Kyrgyz Republic, 4.75%

Tajikistan, 1.05%

Sector Weightings:

Basic materials, 43.61%

Energy, 37.24%

Financials, 9.50%

Telecommunications, 9.65%

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%

Other, 36.11%

Follow Trang Ho on Twitter @TrangHoETFs .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , ETFs

Referenced Stocks: AZIA , NGE

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