Global X Funds just launched the Global X Food ETF (NYSE: EATX) this week for commodity investors who want to buy into food inflation investments.

“8 out of 10 people in the world live in emerging markets. We are starting to see how food companies stand to benefit as the population in emerging economies continues to increase their purchasing power,” said CEO of Global X Funds, Bruno del Ama.

Multinational companies like Nestle, one of the world’s largest food producers has 40% of its business in emerging markets and saw underlying sales up 12% in regions such as China, South Asia and Africa.

The Global X Food ETF tracks the Solactive Global Food Index, aims to measure the performance of global companies involved in the food industry. As of April 29, 2011, the three largest components of the index were Nestle (PINK: NSRGY), Kraft Foods (NYSE: KFT), and Groupe Danone (PINK: DANOY).

EATX has 50 holdings and the fund’s annual expense ratio is 0.65%. Although EATX is classified as a global fund, the bulk of its exposure is to U.S. based companies, with almost 50% of its exposure there.

Lower Cost Alternatives to EATX Fund

Despite EATX’s highly thematic approach, ETFs that invest in the same area but with lower annual costs already exist.

For example, many of the same stocks held within EATX are owned by competing consumer ETFs like the iShares S&P Global Consumer Staples Sector Fund (NYSE: KXI) and the Select Sector Consumer Staples SPDR (NYSE: XLP).

XLP owns consumer staples stocks within the S&P 500 (NYSE: SPY) and charges annual expenses of just 0.20%, which is three times less than EATX’s 0.65%.

But KXI even more closely replicates EATX’s approach because this exchange traded fund owns both international and U.S. stocks. KXI contains 100 holdings with food conglomerates like Nestle, Kraft Foods and Coca-Cola (NYSE: KO) among the fund’s top ten holdings. Around 83% of KXI’s sector exposure is to food, beverage and staples retailers. KXI’s annual expense ratio is just 0.48%.

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