The bulls on Wall Street pumped their breaks yesterday after worse-than-expected ADP employment data put a dent in investors’ confidence for the trading session. Amid the profit taking wave, Global X expanded its arsenal of niche offerings as it rolled out two new foreign equity ETFs with each one targeting an asset class that was previously inaccessible through the ETF wrapper [see Free ETF Country Exposure Tool].
Inside The Nigeria Index ETF (NGE)
Global X continues to democratize the investment landscape with the launch of NGE, as this ETF is the first and only one of its kind to offer targeted exposure to the booming Nigerian economy. Previously, investors could only access bits and pieces of Nigeria through one of several frontier market ETFs:
- Market Vectors Africa Index ETF (AFK, B+): This fund has roughly one-fifth of its total assets allocated to Nigerian equities.
- MSCI Frontier 100 Index Fund (FM, n/a): This ETF holds just over 10% of its assets in Nigerian stocks.
- Frontier Markets ETF (FRN, B+): This fund offers very light exposure to Nigeria as it holds only 5% of its assets in the country.
NGE features a price tag of 0.68% in annual expenses and is linked to the Solactive Nigeria Index; the underlying portfolio is comprised of roughly 25 Nigerian stocks with a heavy tilt towards financial and energy companies, a common trait among foreign equity ETFs [see Africa-Centric ETFdb Portfolio].
Inside The Central Asia and Mongolia Index ETF (AZIA)
AZIA is another first-to-market product as it offers targeted exposure to the often overlooked nations of Mongolia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. Similar to Nigeria, the countries included in AZIA were previously accessible only in bits and pieces. Specifically Kazakhstan, which accounts for nearly half of AZIA’s portfolio from a country breakdown perspective, was accessible through the Frontier Markets ETF (FRN, B+) as well as the ISE Global Copper Index Fund (CU, B-) and the Copper Miners ETF (COPX, B); however, each of these ETFs allocates only a mere 5% of total assets to Kazakhstan, leaving more to be desired for those looking to truly ramp up their exposure to the promising frontier market [see 101 ETF Lessons Every Financial Advisor Should Learn].
This ETF charges 0.69% in annual expenses and holds just over 20 stocks in total with a heavy tilt towards the basic materials sector. As mentioned previously, Kazakhstan equities dominate this portfolio with Russia and Mongolia accounting for the next biggest country allocations.
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Disclosure: No positions at time of writing.