Markets

Global X Plans 3 Nasdaq-Focused ETFs

Global X, the fast-growing New York-based ETF company, plans three new funds based on Nasdaq indexes, including one that looks a lot like it will be a direct competitor of the $21 billion PowerShares QQQ Trust (NasdaqGM:QQQ).

The three planned funds are:

  • Global X Nasdaq 500 ETF
  • Global X Nasdaq Mid Cap 400 ETF
  • Global X Nasdaq 100 Global Technology ETF, which follows the Nasdaq OMX Global Technology Index

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While the “Q’s” uses a full replication strategy of the Nasdaq 100 Index that aims to own all of the stocks in the benchmark, the Global X Nasdaq 100 and the other two ETFs Global X is planning will use sampling strategies, meaning they won’t own all the stocks in their respective indexes. It wasn’t immediately clear what the differences are between the two Nasdaq 100 benchmarks.

By following tech-heavy Nasdaq indexes, each of which steers clear of financial companies, Global X’s three planned ETFs provide an alternative to large-market ETFs, such as the SPDR S'P 500 ETF (NYSEArca:SPY), which has about 13.5 percent allocated to banks and other financial companies.

The financial sector is at the center of the financial crisis that caused the stock market crash in 2008-2009 and, in the past six months as the eurozone’s financial crisis has deepened, financial stocks have been hit a lot harder than those included in technology-oriented Nasdaq indexes.

For example, the $85 billion SPY, the largest ETF in the world, has dropped 9.99 percent in the last six months, and the $7.9 billion SPDR S'P MidCap 400 ETF (NYSEArca:MDY) is down 19.32 percent over the same period. PowerShares’ Nasdaq 100 ETF, QQQ, meanwhile fell only 1.44 percent in the past six months, according to data compiled by IndexUniverse.

Global X didn’t say in the filing what the proposed funds’ tickers are or how much their annual expense ratios would be. The company has about $1.2 billion in assets, according to data compiled by IndexUniverse.

Nasdaq officials weren’t immediately available to identify the crucial differences between the Nasdaq 100 Index the “Q’s” is built on and the Nasdaq OMX Global Technology Index on which Global X’s Nasdaq 100 ETF will be based.

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


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

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