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Global X Funds launches Next Emerging & Frontier ETF


Global X Funds has launched the Global X Next Emerging & Frontier ETF, providing investors with access to 35 countries exhibiting high growth potential and favourable demographical trends.

The index does not include equities from the BRIC countries (Brazil, Russia, India, and China) and other, more advanced economies like South Korea or Taiwan.
The Global X Next Emerging & Frontier ETF tracks the Solactive Next Emerging & Frontier Index and has exposure to attractive economies such as the Philippines, Nigeria, Chile, Panama, Pakistan and the Czech Republic. Countries included in the index represent 24 per cent of the world's population, but just 12 per cent of the world's gross domestic product and eight per cent of the world's equity market cap.
Based on the young populations present in these countries, Global X expects these countries to generate more competitive labour forces that likely will become the world's major supplier of low-cost labour. The firm also expects these countries to provide low correlations to both developed markets and each other, since they are driven by domestic-focused sectors including agriculture, construction and local banking. The index incorporates a capping mechanism to ensure diversification across sectors and individual countries.
"The Next Emerging & Frontier ETF offers exposure to specific economies that we expect will experience a long period of high growth rates, similar to what the BRIC nations experienced over the past 15 years," says Bruno del Ama, chief executive officer of Global X Funds. "Investing in emerging markets continues to be an important strategy for portfolio diversification and growth, but investors must now look beyond more mature economies to regions with accelerating growth rates and expanding populations. This is because 'traditional' emerging market investments have begun to slow down and are too closely correlated with developed markets."
"While emerging and frontier markets may provide ample opportunity for growth, many individual countries and regions are concentrated in particular sectors and have only a handful of liquid names," says Justin Young, head of capital markets. "The Next Emerging & Frontier ETF was designed specifically to address these challenges by providing broad exposure to 35 countries and utilising caps and liquidity thresholds in an effort to ensure diversified, high quality holdings."

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