Global X announced that its popular FTSE Colombia 20 ETF (GXG) will undergo a 2-for-1 split. The split will take place after the close of trading on April 11, 2011 and shares will begin trading on a split-adjusted basis on April 12. GXG closed on Friday at $40.83.
GXG was the first Global X product to begin trading in February 2009, and has become a popular option for investors looking to diversify emerging markets exposure beyond the BRIC bloc and quasi-developed nations of Taiwan and South Korea. Assets in GXG have climbed to more than $135 million from less than $10 million in early 2010 as the Colombian economy has thrived over the last year. Sound economic policies and continued integration into the global economy have propelled Colombian stocks higher, and strong commodity prices have also given a boost to the resource rich nation.
GXG began trading in February 2009 at under $16 per share. The ETF has gained more than 150% since inception, pushing the share price above $40. The announcement of the split comes shortly after Van Eck launched a competing Colombia ETF; the Market Vectors Colombia ETF (COLX) started trading in mid-March. COLX has a price of about $20 per share.
Some in the ETF industry believe that the “handle” for an ETF can have an impact on that product’s popularity, especially when there are competing products with similar holdings and investment objectives. The split on GXG would put its per share price in line with the new competitor from Van Eck.
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Disclosure: No positions at time of writing.