Global X Plans Slew Of Small Cap ETFs

by on February 24, 2011

Global X, the New York-based firm that has already launched a handful of new ETFs this year, continues to fill its product pipeline with innovative ideas. In an SEC filing last week, the issuer behind the recently-launched Andean and ASEAN ETFs detailed plans for seven funds offering exposure to small and mid cap stocks in international markets. The proposed funds include both developed and emerging market funds, many of which are not currently available to U.S. investors. The funds included in the filing are:

  • Global X UK Mid-Cap ETF: Would seek to replicate the FTSE 250 Index, a benchmark comprised of the next 250 UK companies by market capitalization not included in the FTSE 100 Index.
  • Global X Germany Small Cap ETF: Would seek to replicate the Solactive Germany Small-Cap Index, a benchmark maintained by Structured Solutions.
  • Global X Mexico Small-Cap ETF: Would seek to replicate the Solactive Mexico Small-Cap Index.
  • Global X Hong Kong Small Cap ETF: Would seek to replicate the Solactive Hong Kong Small-Cap Index.
  • Global X Singapore Small-Cap ETF: Would seek to replicate the Solactive Singapore Small-Cap Index.
  • Global X South Korea Small-Cap ETF: Would seek to replicate the Solactive South Korea Small-Cap Index.
  • Global X Taiwan Small-Cap ETF: Would seek to replicate the Solactive Taiwan Small-Cap Index.

Though many of the economies included in the list above are among the largest and most dynamic in the world, ETF options for accessing these market remain limited. For most, exposure through ETFs is a binary decision: investors either have it–in the form of funds dominated by mega cap companies–or they don’t.

A number of funds have popped up in recent years offering exposure to small and mid cap companies in international markets, and many investors have embraced these funds as a better “pure play” on the local economies. Whereas large cap companies tend to be multi-national firms that generate revenue around the world (think Coca-Cola), small caps may be more sensitive to local consumption patterns. Indeed, the differences in return between funds that focus on different-sized companies within the same economy can be significant [see For ETF Investors, The Details Matter].

Country Large Cap-Heavy ETF Small / Mid Cap ETF
UK EWU n/a
Germany EWG n/a
Mexico EWW n/a
Hong Kong EWH n/a
Singapore EWS n/a
South Korea EWY SKOR
Taiwan EWT TWON

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Disclosure: No positions at time of writing.