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Global X Funds launches Pure Gold Miners ETF, Oil Equities ETF


Global X Funds, the New York based provider of exchange traded funds, has launched two new funds – the Global X Pure Gold Miners ETF (NYSEArca: GGGG) and the Global X Oil Equities ETF (NYSEArca: XOIL).


The launches are the latest expansion in the ETF issuer’s global commodity funds suite and are aimed at giving investors a purer play in gold and oil equities, respectively, by following the indexing methodology of the Solactive Indexes.
The goal of the Global X Pure Gold Miners ETF is to provide investors with relatively easy access to companies that get the vast majority of their revenues from gold mining. Unlike other indexes such as the NYSE Arca Gold Mining Index, which actually includes several silver miners, over 95% of the revenues from the companies in the Solactive Index are derived from gold mining.  The Global X Pure Gold Miners ETF is a global fund, providing access to gold mining companies listed on exchanges all over the world.  As of March 15, 2011, the Fund includes companies based in Canada, the United States, the United Kingdom, Hong Kong, Australia and Turkey.
“Not all gold miner ETFs are created equal and Global X Funds is the first to provide one which is a pure play on gold miners,” says Bruno del Ama, chief executive officer of Global X Funds.
In addition to spurring the demand for gold, recent events in the Middle East have led to soaring prices for another commodity – oil. While many indexes have been developed to track the market price of oil – using oil futures or oil equities, for example – few have been able to accurately track the performance of oil.  In order to address this issue, the Global X Oil Equities ETF was developed as a Fund that only includes companies with the highest correlation to oil prices.  By using this correlation criterion, the Fund provides exposure to pure-play oil companies with significant oil reserves that are not as involved in other industries such as natural gas or downstream operations.

“We are offering a product for investors looking for exposure to oil while avoiding issues such as contango[1] that reduce their returns,” says del Ama.
The Global X Pure Gold Miners ETF tracks the Solactive Global Pure Gold Miners Index, which is comprised of global companies involved in the gold mining industry. Only companies that generate the vast majority of their business from gold mining are eligible to be included in the Underlying Index. As of 2010 revenue data, over 95% of the revenues from the companies in the Underlying Index were derived from gold mining, according to Structured Solutions AG.   

As of March 10, 2011, the three largest components of the index were Gold Fields, Polyus Gold, and Kinross Gold Corp. The Global X Oil Equities ETF tracks the Solactive Global Oil Equities Index, which is designed to measure the performance of oil companies globally that are highly correlated with the spot price of oil. As of March 10, 2011, the three largest components of the index were Forest Oil Corp., Newfield Exploration Co, and Apache Corp.

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