Global X Files For Global X FTSE ASEAN 40 ETF (ASEA)

Global X has filed paperwork with the SEC for a “Global X FTSE ASEAN 40 ETF.” The Global X FTSE ASEAN 40 ETF (“Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE ASEAN 40 Index. They plan to trade this new fund on the NYSE Arca under the symbol (NYSE:ASEA).

Total Annual Fund Operating Expenses: 0.65%

PRINCIPAL INVESTMENT STRATEGIES
 
The Underlying Index tracks the performance of the 40 largest and most liquid companies in the five ASEAN countries (Singapore, Malaysia, Indonesia, Thailand and Philippines), as defined by FTSE. As of January 3, 2011 the three largest stocks were DBS Group Holdings, Oversea-Chinese Banking and Singapore Telecom.   The Fund’s investment objective and Underlying Index may be changed without shareholder approval. Shareholders will be given 60 days’ prior notice of any such change.

The Underlying Index is sponsored by an organization (“Index Provider”) that is independent of the Fund and Global X Management Company LLC, the investment adviser for the Fund (“Adviser”).  The Index Provider determines the relative weightings of the securities in the Underlying Index and publishes information regarding the market value of the Underlying Index. The Fund’s Index Provider is FTSE Group (“FTSE”).

The Adviser uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. Unlike many investment companies, the Fund does not try to “beat” the Underlying Index and does not seek temporary defensive positions when markets decline or appear overvalued.

The Fund will invest at least 80% of its total assets in the securities of the Underlying Index, which are domiciled or listed in foreign countries, and in ADRs and GDRs based on the securities in the Underlying Index.

The Fund will use a replication strategy.  A replication strategy is an indexing strategy that involves investing in the securities of the Underlying Index in approximately the same proportions as in the Underlying Index.  However, the Fund may utilize a representative sampling strategy with respect to the Underlying Index when a replication strategy might be detrimental to shareholders, such as when there are practical difficulties or substantial costs involved in compiling a portfolio of equity securities to follow the Underlying Index, in instances in which a security in the Underlying Index becomes temporarily illiquid, unavailable or less liquid, or as a result of legal restrictions or limitations (such as tax diversification requirements) that apply to the Fund but not the Underlying Index.
 
Correlation: Correlation is the extent to which the values of different types of investments move in tandem with one another in response to changing economic and market conditions.  An index is a theoretical financial calculation, while the Fund is an actual investment portfolio. The performance of the Fund and the Underlying Index may vary somewhat due to transaction costs, asset valuations, foreign currency valuations, market impact, corporate actions (such as mergers and spin-offs), legal restrictions or limitations, illiquid or unavailable securities, and timing variances.
 
The Adviser expects that, over time, the correlation between the Fund’s performance and that of the Underlying Index, before fees and expenses, will exceed 95%.  A correlation percentage of 100% would indicate perfect correlation.  If the Fund uses a replication strategy, it can be expected to have greater correlation to the Underlying Index than if it uses a representative sampling strategy.

For the complete filing click: HERE

Leave a Reply

Your email address will not be published. Required fields are marked *