(NYSEArca: CHIQ) and Global X China Industrials ETF (NYSEArca: CHII). These are the first ETFs globally that offer investors targeted access to the rapidly growing China Consumer and Industrial sectors.
The Global X China Consumer ETF seeks to replicate the S-BOX China Consumer Index, which is designed to reflect the performance of the consumer sector in China. As of October 30, 2009, the largest stocks in the Consumer index were food & beverage companies Tingyi and Want Want China, automobile company Dongfeng Motor Group, department store firm Parkson Retail Group, and sports apparel company Li Ning.
Chinese President Hu Jintao recently said that the government is focused on expanding domestic spending, “especially consumer demand.” In October, China’s retail sales jumped 16.2% from a year earlier.(i) And there is significant room for continued growth: according to Morgan Stanley, “the incremental contribution of Chinese consumers in USD terms to the global consumption of tradable goods started to exceed that of the US in 2007.” (ii) This trend is expected to continue as consumer spending currently accounts for only 36% of China’s GDP, about half the level of the U.S.
The Global X China Industrials ETF seeks to replicate the S-BOX China Industrials Index, which is designed to reflect the performance of the industrial sector in China. As of October 30, 2009, the largest stocks in the Industrials index were diversified industrial manufacturer BYD Company, infrastructure groups China Communications Construction and China Railway Group, industrial shipping and logistics services company China COSCO Holdings, and building materials firm China National Building Material Group.
China is also spurring its industrials sector with a $580 billion stimulus package directed towards construction, railways, subways and airports. In October, China’s industrial output rose 16.1% from a year earlier. (i) According to economic forecasting firm IHS Global Insight, China will overtake the U.S. as the world’s largest manufacturer by 2015.
“China is an incredibly efficient manufacturing hub for the world, as well as the main source of growth in global consumer demand,” said Bruno del Ama, CEO of Global X Management. “The China Industrials ETF and China Consumer ETF provide efficient and diversified access to these China manufacturing and consumption themes.”
These ETFs are part of a family of China sector ETFs, which also includes the China Energy ETF (ticker: CHIE), China Financials ETF (ticker: CHIX), China Materials ETF (ticker: CHIM), and China Technology ETF (ticker: CHIN). These other China sector ETFs are not yet available for purchase.
About Global X Management Company, LLC
Global X Management Company, LLC, a New York-based asset manager, serves as the investment adviser to Global X Funds. The firm, registered as an investment adviser with the Securities and Exchange Commission, specializes in innovative international ETFs. For more information, visit www.globalxfunds.com.
Investing involves risk, including the possible loss of principal. International investing may involve risk of capital loss from unfavorable fluctuations in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Securities focusing on a single country and narrowly focused investments may be subject to higher volatility.
Structured Solutions AG Indexes have been licensed for use by Global X Management Company, LLC. Global X Funds are not sponsored, endorsed, issued, sold, or promoted by Structured Solutions AG, nor does this company make any representations regarding the advisability of investing in the Global X Funds.
Carefully consider the Funds’ investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Funds’ prospectus, which may be obtained by calling 1-888-GX-FUND-1 (1.888.493.8631), or by visiting www.globalxfunds.com. Read the prospectus carefully before investing.
Global X Management Company, LLC serves as an advisor to the Global X Funds. The Funds are distributed by SEI Investments Distribution Co., which is not affiliated with Global X Management Company or any of its affiliates.
Data sources: National Bureau of Statistics of China, U.S. Department of Commerce
Index data source: Structured Solutions AG.
(i) National Bureau of Statistics of China
(ii) “China’s under-consumption over-stated,” Qing Wang and Steven Zhang, Morgan Stanley, September 15,2009
SOURCE Global X Management Company
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