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Global X Funds launches first fertilizers/potash ETF


Global X Funds, the New York based provider of exchange traded funds (ETFs), has launched the Global X Fertilizers/Potash ETF. SOIL offers targeted exposure to fertilizer producers around the world, giving investors access to a critical agricultural and commodity sector.

Global growth is predicted to drive food demand (especially high value foods such as meat, fruit and vegetables) in emerging economies, thereby strengthening demand for fertilizers (Food and Agricultural Organization, 2010). In India, for instance, grain yields are less than one half of those in the US, with improper fertilization being a key reason for lower yields. Farmers require these nutrients to increase crop yields, and fertilizer companies have become the primary producers of commodities that are critical for global food supply growth. China and India alone account for more than 40% of world fertilizer use and China’s annual consumption is expected to return to pre-2008 growth levels of nearly 10% per year.
“As the population in emerging economies continues to increase their food consumption and purchasing power, these nations have to increase farming yields,” says CEO of Global X Funds, Bruno del Ama (pictured). “We are starting to see how these fertilizer and potash companies stand to benefit from this demand.”
The Global X Fertilizers/Potash ETF tracks the Solactive Global Fertilizers/Potash Index, which is designed to track the performance of the largest and most liquid listed companies globally that are active in some aspect of the fertilizer/potash industry. As of May 23, 2011, the three largest components of the index were CF Industries Holdings Inc., Yara International ASA, and Incitec Pivot Ltd.

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