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Thursday, November 11, 2010

Global X Launches Norway ETF NORW

Global X, the boutique fund sponsor known for its emerging markets and metals strategies, launched a new fund today focused exclusively on the economy of Norway, an ETF industry first. The Global X FTSE Norway ETF (NYSEArca: NORW) seeks to replicate the performance of the FTSE Norway 30 Index, which comprises the largest publicly traded companies of Norway and is designed to reflect the broad-based equity market performance of that country. FTSE is an index provider jointly owned by the Financial Times and the London Stock Exchange.

Norway, along with Canada, is one of a handful of net energy exporters among the world’s industrialized nations, and Global X’s new Norway fund reflects this.

As of last month, the FTSE Norway 30 Index’s top holding was the state-run Norwegian energy company Statoil ASA, which would have accounted for 18.93 percent of assets invested in the index. Oil & gas was the top sector, at 41.42 percent.

Global X, which launched gold miners and uranium funds earlier this month, has been busy this year building its ETF lineup. When asked if there was an overarching strategic plan behind Global X’s recent launches, Bruno del Ama, the company’s chief executive officer, said that the long-term prospects of a new fund, along with customer need, largely dictate the launch schedule.

“We identify opportunities that we think will do well over the long term, at least 25 years. Then we look for really stable opportunities or thematic opportunities we think will do well and offer an ETF that makes sense. Finally, we obviously want products that will attract sufficient interest from investors.”
Del Ama added that his firm’s clients view Norway to some extent as other hard-asset-producing countries with stable currencies, like Canada, Australia and New Zealand.

The Timing Is Right

Given the problems in eurozone countries like Greece, Spain and Ireland, now may be an ideal time for a Norway fund. Unlike many of its European neighbors, Norway has not adopted the euro and instead uses the krone.

“It’s definitely part of the appeal of the fund,” said del Ama. “One of the problems for an economy like Germany is that it’s part of the euro and is part of the bailout effort for Greece. Norway doesn’t have that problem.

The new Norway fund is the first of a suite of ETFs for which Global X filed last year to hit the market. That group of filings includes Denmark, Finland and United Arab Emirates funds based on FTSE indexes as well as an “Emerging Africa” and a Pakistan ETF.

The new fund carries an expense ratio of 0.50 percent.

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