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Global X Funds launches food ETF


Global X Funds, the New York based provider of exchange traded funds (ETFs), has launched the Global X Food ETF (EATX).

Continued GDP growth in emerging market nations has led to a dynamic shift in the way citizens procure, prepare, and consume food in these countries. Greater purchasing power has led to increased consumption of dairy and livestock, as well as consumer packaged goods. 

“Emerging markets are key to unlocking future growth because their economies are growing at a significantly higher rate than developed markets,” says William Johnson, Heinz Chairman and CEO of Global X Funds. “The middle class in emerging markets will eventually outnumber the combined populations of the US and Europe.”

Multinationals like Nestle, one of the world’s largest food producers with a 4.88% weighting in the ETF as of 4/29/11, has 40% of its business in emerging markets and saw underlying sales up 12% in regions such as China, South Asia and Africa (Reuters, April 2011).
“Eight out of 10 people in the world live in emerging markets. We are starting to see how food companies stand to benefit as the population in emerging economies continues to increase their purchasing power,” says CEO of Global X Funds, Bruno del Ama (pictured).
The Global X Food ETF tracks the Solactive Global Food Index, which is designed to measure broad based equity market performance of global companies involved in the food industry. As of April 29, 2011, the three largest components of the index were Nestle, Kraft Foods, and Danone.
As a commitment to corporate social responsibility, Global X Management Company, LLC, the fund adviser, will donate any profit it derives from EATX to Action Against Hunger | ACF International, a global humanitarian organization that works to save the lives of malnourished children while providing communities with sustainable access to safe water and long-term solutions to hunger. “In harnessing global food markets for good, Global X Management will be making a significant contribution to the vulnerable communities we serve around the world,” said Geoffrey M. Glick, Director of External Relations for Action Against Hunger.

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