In a feel good story about the ETF industry, Global X Management Company, LLC, the fund advisor for the recently launched Global X Food ETF (EATX), announced that it would be donating any profits that it derives from EATX to Action Against Hunger. The organization, also known as ACF International, is a global humanitarian group that seeks to end world hunger. Their programs have helped more than five million people in over 40 countries around the world while especially focusing on combating child malnutrition across the developing world.
The move by Global X Management to pair giving to a hunger organization with its food ETF is an interesting one, as many of the companies in the index are among the biggest producers or sellers of food in the world. In a way, it is akin to making sure that everyone benefits from a surge in prices for food stocks; both investors and those in the developing world where products from Nestle, General Mills and the like are still far out of reach for most. “This partnership is a great conceptual fit for Action Against Hunger, and one with enormous promise for extending the reach and impact of our humanitarian programs,” said Geoffrey M. Glick, Director of External Relations for Action Against Hunger. “With support from Global X’s innovative Food ETF, Action Against Hunger can expand its food security & livelihoods programs, ensuring that vulnerable communities around the world are able tackle the root causes of hunger—problems of access, income, and production.”
Action Against Hunger
While there a number of quality organizations that promote awareness about hunger, ACF International clearly stuck out to those at Global X Management Company, LLC. Bruno del Ama, the CEO of the company, said that the global focus of the organization was especially appealing to the team and that the charity was chosen for its focus on fighting hunger among children around the world. Furthermore, del Ama also discussed how his firm was impressed by ACF’s attempts to bring sustainability to areas impacted by poverty, helping to improve infrastructure and other processes to ensure sustainable solutions to global hunger issues.
The gesture from Global X to essentially manage EATX for free is a first in the ETF industry. Prior to shutting down last year, the Texas ETF (TXF) and Oklahoma ETF (OOK) also made pledges to charitable organizations. A minimum of 10% of the management fees from those funds went to Aaron’s Bridge, an organization that helped to facilitate access to more treatment options in Oklahoma to children with developmental disabilities.
The expense ratio for EATX comes in at 0.65%, roughly in line with other Global X products and the existing PowerShares Food & Beverage Portfolio (PBJ). At that level, management fees for the ETF will equate to about $65,000 annually for every $10 million in assets. If EATX accumulates significant assets, the impact on ACF could be significant. Global X’s largest ETF, the Silver Miners ETF (SIL) has about $570 million in AUM. The S&P 500 SPDR (SPY) is the largest U.S.-listed ETF by total assets, with about $95 billion. Donations to ACF International from the EATX management fees will be uncapped, and will grow along with the new product from Global X.
EATX offers a new spin on socially responsible investing, delivering a way for investors to gain access to a corner of the global market that could thrive as emerging markets drive demand for protein and dairy products higher while simultaneously supporting an organization dedicated to addressing intensifying hunger problems around the globe. “By tapping global markets, Global X is providing industry leadership in helping to address interconnected issues of hunger, agricultural production, and market development,” said Glick. “We hope this model will inspire other corporations to take similar actions to improve the world we all share.”
For more information about Action Against Hunger check out the company’s website here.