Global X was one of the US ETF providers in 2021, with an asset base more than doubling to $44 billion. The firm finished as the 12th largest ETF manager, climbing four places in the crowded CFRA League table, aided by net ETF inflows of $21 billion. To learn more about the reason for the firm’s relative success, we spoke to Global X CEO Luis Beruga in mid-January. He explained that the firm is known for thematic ETFs, which have a long-term growth focus, are unrestricted by geographies and regions, and are tied to related concepts that affect daily life.
Global X offers 33 such thematic ETFs with assets in excess of $20 billion. While Global X expands its suite in 2021, Beruga noted Global X Lithium & Battery Tech ETF (LIT) was the industry’s first thematic ETF when it hit the market in 2010. LIT recently had $5.3 billion in assets.
Investments linked to electric vehicle demand are compelling but not alone for Global X. Baruga explained that the many supply chain issues seen around the world over the years have prompted many corporations to rethink how they prepare for the future. inside companies Global X Robotics and Artificial Intelligence Thematic ETF (BotZ), such as ABB, Keynes, and NVIDIA (NVDA), are positioned as beneficiaries. Beruga also believes that we are witnessing a very clear transition from the physical world to the digital world with more devices connected to the Internet. This introduces more points of vulnerability within a network that can be exploited by bad actors. companies found in Global X Cybersecurity ETF (BUG) is preventing millions of threats daily.
Global X also expanded its thematic ETF lineup in 2021. The firm expanded its focus on clean energy and sustainable living with new products from AgTech, clean water, solar and wind energy. Beruga explained that the Global X team has worked on products that invest in companies that are well-positioned to capture long-term changes in the macroeconomy. for example, Global X Clean Water ETF (AQWA) owns American Water Works (AWK), Ecolab (ECL) and Xylem (XYL), while Global X Solar ETF (RAYS) holds Enphase Energy (ENPH) and Sunrun (RUN). The CFRA is already issuing star ratings on these funds based on our analysis of the holdings, despite their young age.
Established thematic ETFs such as BOTZ and BUG as well as newer products such as RAYS are competing for investor attention. Robo-Stocks Global Robotics and Automation Index ETF (robo), First Trust Nasdaq Cyber Security ETF (CIBR), Invesco Solar ETF (tan) and others. But unlike broad market ETFs, where there may be limited margin inside one fund or another and fees matter more, holdings drive performance with thematic ETFs, making it important to look under the hood.
Conclusion
You can listen to the full interview with Baruga, including a discussion of the firm’s earnings suite of products and how GlobalX has expanded its presence internationally, on MarketScope Advisors or YouTube.
