There a number of new exchange traded funds that debuted recently, including a new Colombia ETF fund from Market Vectors and Global X funds that include a gold mining investment and an oil stocks ETF. ETF research shows that the marketplace for exchange traded funds is rapidly growing, and the gold ETF, crude oil play and Columbia ETF are all good examples of new offerings in the commodities and emerging markets space.
New Gold Miners and Oil Equities ETFs
Global X Funds launched the Global X Pure Gold Miners ETF (NYSE: GGGG) and the Global X Oil Equities ETF (NYSE: XOIL).
XOIL is linked to the Solactive Global Oil Equities Index, which equally weights all 25 stocks within it. Equal weighting means each stock within the index is given the same level of representation or ownership within the index. Traditional stock indexes use a market cap weighting method and companies with the largest market size tend to have a greater influence on the price movement of the index.
XOIL maintains around 80% exposure to U.S. oil stocks and the remaining 20% to Canadian oil stocks. The annual expense ratio for XOIL is 0.49%.
GGGG tracks the Solactive Global Pure Gold Miners Index, which is comprised of 30 global companies involved in the gold mining industry. The fund’s annual expense ratio is 0.65%.
Both Global X Funds will be facing stiff competition.
GGGG will compete with larger and more established gold miner ETFs like the SPDR S&P Metals & Mining ETF (NYSE: XME) and the Market Vectors Gold Miners ETF (NYSE: GDX). Likewise, XOIL will compete against larger oil ETFs like the Select Sector SPDR Energy ETF (NYSE: XLE) and SPDR Oil & Gas Exploration ETF (NYSE: XOP).
New Colombia ETF
Van Eck Global has just launched a new ETF with market exposure to publicly traded companies in the South American country of Colombia.
The Market Vectors Colombia ETF (NYSE: COLX) is benchmarked to the Market Vectors Colombia Index created by 4AssetManagement. The fund holds 51% exposure to large company stocks, 36% to mid caps and 13% to small caps. The top three industry sectors represented inside COLX are financial stocks (33%), energy (30%) and basic materials (17%).
Colombia is South America’s second largest country and a beneficiary of strong commodity price trends. Furthermore, fiscal reforms and reduced government debt have opened the country to international investment. Colombia’s GDP growth is projected to be approximately 4.6% in 2011.
COLX will compete head-to-head with the Global X FTSE Colombia ETF (NYSE: GXG), which charges annual fees of 0.78% and has around $135 million in assets.
“Colombia’s commodity-based economy appears poised to experience growth in both trade and foreign direct investment,” adds Allison Lovett, Vice President of Marketing at Van Eck Global. “And the merger of the Colombian stock exchange with Peru’s exchange may further strengthen the country’s position among regional capital markets.”
COLX has an annual net expense ratio of 0.75%.
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