ck0001432353-20211031


ck0001432353-20211031_g1.jpg

Statement of Additional Information
 
March 1, 2022
 
This Statement of Additional Information ("SAI") is not a prospectus. It should be read in conjunction with the current Prospectus (each a "Prospectus" and, collectively, the "Prospectuses") for the following Funds ("Funds") of Global X Funds® ("Trust") as such Prospectus may be revised or supplemented from time to time:
Global X MSCI Colombia ETF (GXG)
Global X SuperDividend® ETF (SDIV)
Global X MSCI China Consumer Discretionary ETF (CHIQ) Global X Social Media ETF (SOCL)
Global X MSCI China Industrials ETF (CHII)
Global X Guru® Index ETF (GURU)
Global X MSCI China Communication Services ETF (CHIC) Global X SuperIncome™ Preferred ETF (SPFF)
Global X MSCI China Financials ETF (CHIX)
Global X SuperDividend® U.S. ETF (DIV)
Global X MSCI China Energy ETF (CHIE)
Global X S&P 500® Covered Call ETF (XYLD)
Global X MSCI China Materials ETF (CHIM)
Global X NASDAQ 100® Covered Call ETF (QYLD)
Global X MSCI Norway ETF (NORW) (formerly known as the Global X FTSE Nordic Region ETF)
Global X MSCI SuperDividend® Emerging Markets ETF (SDEM)
Global X FTSE Southeast Asia ETF (ASEA)
Global X SuperDividend® REIT ETF (SRET)
Global X MSCI Argentina ETF (ARGT) Global X Renewable Energy Producers ETF (RNRG)
Global X MSCI Greece ETF (GREK)
Global X S&P 500® Catholic Values ETF (CATH)
Global X MSCI Nigeria ETF (NGE)
Global X MSCI SuperDividend® EAFE ETF (EFAS)
Global X MSCI Next Emerging & Frontier ETF (EMFM) Global X E-commerce ETF (EBIZ)
Global X MSCI Portugal ETF (PGAL) Global X Russell 2000 Covered Call ETF (RYLD)
Global X DAX Germany ETF (DAX) Global X S&P Catholic Values Developed ex-U.S. ETF (CEFA)
Global X MSCI Pakistan ETF (PAK)
Global X Nasdaq 100® Covered Call & Growth ETF (QYLG)
Global X MSCI China Consumer Staples ETF (CHIS)
Global X S&P 500® Covered Call & Growth ETF (XYLG)
Global X MSCI China Health Care ETF (CHIH) Global X Emerging Markets Internet & E-commerce ETF (EWEB)
Global X MSCI China Information Technology ETF (CHIK)
Global X S&P 500® Tail Risk ETF (XTR)
Global X MSCI China Real Estate ETF (CHIR)
Global X S&P 500® Risk Managed Income ETF (XRMI)
Global X MSCI China Utilities ETF (CHIU)
Global X S&P 500® Collar 95-110 ETF (XCLR)
Global X MSCI Vietnam ETF (VNAM)
Global X NASDAQ 100® Tail Risk ETF (QTR)
Global X Copper Miners ETF (COPX)
Global X NASDAQ 100® Risk Managed Income ETF (QRMI)
Global X Silver Miners ETF (SIL)
Global X NASDAQ 100® Collar 95-110 ETF (QCLR)
Global X Gold Explorers ETF (GOEX) Global X Disruptive Materials ETF (DMAT) (formerly known as Global X Advanced Materials ETF)
Global X Uranium ETF (URA)
Global X S&P Catholic Values U.S. Aggregate Bond ETF (CAGG)*
Global X Lithium & Battery Tech ETF (LIT)
*    Not open for investment.

Each Fund's Prospectus is dated March 1, 2022. Capitalized terms used herein that are not defined have the same meaning as in the Prospectus, unless otherwise noted. The financial statements and notes contained in the Annual Report of the Trust and the Annual Report of each of the Predecessor Funds (as defined below) are incorporated by reference into and are deemed to be part of this SAI
(https://www.sec.gov/Archives/edgar/data/1432353/000113542822000013/globalxintl103121.htm)
(https://www.sec.gov/Archives/edgar/data/1432353/000113542822000012/globalxcomm_ar103121.htm)
(https://www.sec.gov/Archives/edgar/data/1432353/000113542822000014/globalxspecopps103121.htm). A copy of the Prospectus and Annual Reports may be obtained without charge by writing to SEI Investments Global Funds Services, One Freedom Valley Drive Oaks, PA 19456, calling 1-888-493-8631 or visiting www.globalxetfs.com. NYSE Arca Inc. ("NYSE Arca") is the principal U.S. national stock exchange on which all operational Funds (other than the Global X Russell 2000 Covered Call ETF, Global X DAX Germany ETF, Global X Social Media ETF, Global X SuperDividend® REIT ETF, Global X Renewable Energy Producers ETF, Global X S&P 500® Catholic Values ETF, Global X MSCI SuperDividend® EAFE ETF, Global X NASDAQ 100® Covered Call ETF, Global X E-commerce ETF, Global X S&P Catholic Values Developed ex-U.S. ETF, Global X Nasdaq 100® Covered Call & Growth ETF, Global X Emerging Markets Internet & E-



commerce ETF, Global X S&P Catholic Values U.S. Aggregate Bond ETF, Global X NASDAQ 100® Tail Risk ETF, Global X NASDAQ 100® Risk Managed Income ETF, Global X NASDAQ 100® Collar 95-110 ETF and Global X Disruptive Materials ETF) identified in this SAI are listed. The Global X DAX Germany ETF, Global X Social Media ETF, Global X SuperDividend® REIT ETF, Global X Renewable Energy Producers ETF, Global X S&P 500® Catholic Values ETF, Global X MSCI SuperDividend® EAFE ETF, Global X NASDAQ 100® Covered Call ETF, Global X E-commerce ETF, Global X S&P Catholic Values Developed ex-U.S. ETF, Global X Nasdaq 100® Covered Call & Growth ETF, Global X Emerging Markets Internet & E-commerce ETF, Global X S&P Catholic Values U.S. Aggregate Bond ETF, Global X NASDAQ 100® Tail Risk ETF, Global X NASDAQ 100® Risk Managed Income ETF, Global X NASDAQ 100® Collar 95-110 ETF and Global X Disruptive Materials ETF are listed on The NASDAQ Stock Market LLC ("NASDAQ"). The Global X Russell 2000 Covered Call ETF is listed on Cboe BZX Exchange, Inc. ("Cboe BZX"). The NYSE Arca, NASDAQ, and Cboe BZX are respectively referred to herein as the "Exchange".



TABLE OF CONTENTS
GENERAL DESCRIPTION OF THE TRUST AND FUNDS
ADDITIONAL INVESTMENT INFORMATION
   EXCHANGE LISTING AND TRADING
   INVESTMENT OBJECTIVE, STRATEGIES AND RISKS
   PORTFOLIO TURNOVER
   INFORMATION REGARDING THE INDICES AND THE INDEX PROVIDERS
   INVESTMENT RESTRICTIONS
   CURRENT 1940 ACT LIMITATIONS
   CONTINUOUS OFFERING
   PORTFOLIO HOLDINGS
MANAGEMENT OF THE TRUST
   BOARD OF TRUSTEES AND OFFICERS
   STANDING BOARD COMMITTEES
   TRUSTEE AND OFFICER OWNERSHIP OF FUND SHARES
   TRUSTEE OWNERSHIP OF SECURITIES OF THE ADVISER AND RELATED COMPANIES
   TRUSTEE COMPENSATION
   CODE OF ETHICS
   INVESTMENT ADVISER
   PORTFOLIO MANAGERS
   BROKERAGE TRANSACTIONS
   PROXY VOTING
   SUB-ADMINISTRATOR
   DISTRIBUTOR
   CUSTODIAN AND TRANSFER AGENT
   SECURITIES LENDING AGENT
   DESCRIPTION OF SHARES
   BOOK-ENTRY ONLY SYSTEM
PURCHASE AND REDEMPTION OF CREATION UNITS
   TRANSACTIONS IN CREATION UNITS
   CREATION UNIT AGGREGATIONS
   PURCHASE AND ISSUANCE OF CREATION UNIT AGGREGATIONS
   REDEMPTION OF CREATION UNITS
TAXES
   U.S. SHAREHOLDER
   FUND TAXATION
   SECTIONS 351 AND 362
   FOREIGN TAXES
   TAXATION OF FUND DISTRIBUTIONS
   EXCESS INCLUSION INCOME
   TAXATION OF INCOME FROM CERTAIN FINANCIAL INSTRUMENTS
   SALES OF SHARES
   COST BASIS REPORTING
   REPORTING
   BACKUP WITHHOLDING
   OTHER TAXES
   TAXATION OF NON-U.S. SHAREHOLDERS
   NET ASSET VALUE
   DISTRIBUTION AND SERVICE PLAN
DIVIDENDS AND DISTRIBUTIONS
   GENERAL POLICIES
   DIVIDEND REINVESTMENT SERVICE
FINANCIAL STATEMENTS
OTHER INFORMATION
   CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
   INDEPENDENT TRUSTEE COUNSEL
   INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
   SECURITIES LENDING AGENT
   ADDITIONAL INFORMATION
APPENDIX A


i


GENERAL DESCRIPTION OF THE TRUST AND FUNDS
 
As of February 1, 2022, the Trust consisted of 102 portfolios, 92 of which were operational. The Trust was formed as a Delaware Statutory Trust on March 6, 2008 and is authorized to have multiple series or portfolios. The Trust is an open-end management investment company, registered under the Investment Company Act of 1940, as amended ("1940 Act"). The offering of the Trust's shares is registered under the Securities Act of 1933, as amended ("Securities Act"). Each Fund (other than the Global X MSCI Next Emerging & Frontier ETF, Global X SuperDividend® ETF, Global X SuperDividend® U.S. ETF, Global X MSCI SuperDividend® Emerging Markets ETF, Global X MSCI SuperDividend® EAFE ETF, Global X SuperDividend® REIT ETF, Global X SuperIncome™ Preferred ETF, Global X Guru® Index ETF, Global X S&P 500® Catholic Values ETF, Global X S&P 500® Covered Call ETF, Global X Russell 2000 Covered Call ETF, Global X S&P 500® Covered Call & Growth ETF, Global X S&P 500® Tail Risk ETF, Global X S&P 500® Risk Managed Income ETF and Global X S&P 500® Collar 95-110 ETF) is "non-diversified" and, as such, the Fund's investments are not required to meet certain diversification requirements under the 1940 Act. This SAI relates only to the following Funds:
Global X MSCI Colombia ETF (GXG)
Global X SuperDividend® ETF (SDIV)
Global X MSCI China Consumer Discretionary ETF (CHIQ) Global X Social Media ETF (SOCL)
Global X MSCI China Industrials ETF (CHII)
Global X Guru® Index ETF (GURU)
Global X MSCI China Communication Services ETF (CHIC) Global X SuperIncome™ Preferred ETF (SPFF)
Global X MSCI China Financials ETF (CHIX)
Global X SuperDividend® U.S. ETF (DIV)
Global X MSCI China Energy ETF (CHIE)
Global X S&P 500® Covered Call ETF (XYLD)
Global X MSCI China Materials ETF (CHIM)
Global X NASDAQ 100® Covered Call ETF (QYLD)
Global X MSCI Norway ETF (NORW) (formerly known as Global X FTSE Nordic Region ETF)
Global X MSCI SuperDividend® Emerging Markets ETF (SDEM)
Global X FTSE Southeast Asia ETF (ASEA)
Global X SuperDividend® REIT ETF (SRET)
Global X MSCI Argentina ETF (ARGT) Global X Renewable Energy Producers ETF (RNRG)
Global X MSCI Greece ETF (GREK)
Global X S&P 500® Catholic Values ETF (CATH)
Global X MSCI Nigeria ETF (NGE)
Global X MSCI SuperDividend® EAFE ETF (EFAS)
Global X MSCI Next Emerging & Frontier ETF (EMFM) Global X E-commerce ETF (EBIZ)
Global X MSCI Portugal ETF (PGAL) Global X Russell 2000 Covered Call ETF (RYLD)
Global X DAX Germany ETF (DAX) Global X S&P Catholic Values Developed ex-U.S. ETF (CEFA)
Global X MSCI Pakistan ETF (PAK)
Global X Nasdaq 100® Covered Call & Growth ETF (QYLG)
Global X MSCI China Consumer Staples ETF (CHIS)
Global X S&P 500® Covered Call & Growth ETF (XYLG)
Global X MSCI China Health Care ETF (CHIH) Global X Emerging Markets Internet & E-commerce ETF (EWEB)
Global X MSCI China Information Technology ETF (CHIK)
Global X S&P 500® Tail Risk ETF (XTR)
Global X MSCI China Real Estate ETF (CHIR)
Global X S&P 500® Risk Managed Income ETF (XRMI)
Global X MSCI China Utilities ETF (CHIU)
Global X S&P 500® Collar 95-110 ETF (XCLR)
Global X MSCI Vietnam ETF (VNAM)
Global X NASDAQ 100® Tail Risk ETF (QTR)
Global X Copper Miners ETF (COPX)
Global X NASDAQ 100® Risk Managed Income ETF (QRMI)
Global X Silver Miners ETF (SIL)
Global X NASDAQ 100® Collar 95-110 ETF (QCLR)
Global X Gold Explorers ETF (GOEX) Global X Disruptive Materials ETF (DMAT) (formerly known as Global X Advanced Materials ETF)
Global X Uranium ETF (URA)
Global X S&P Catholic Values U.S. Aggregate Bond ETF (CAGG)*
Global X Lithium & Battery Tech ETF (LIT)

The following operational Funds changed names within the past five years:

The Global X MSCI Greece ETF in 2016 (formerly known as the Global X FTSE Greece 20 ETF)
The Global X MSCI SuperDividend® Emerging Markets ETF in 2016 (formerly known as the Global X SuperDividend® Emerging Markets ETF)
The Global X MSCI Portugal ETF in 2016 (formerly known as the Global X FTSE Portugal 20 ETF)
The Global X FTSE Southeast Asia ETF in 2017 (formerly known as the Global X Southeast Asia ETF)
The Global X Lithium & Battery Tech ETF in 2017 (formerly known as the Global X Lithium ETF)
The Global X Social Media ETF in 2017 (formerly known as the Global X Social Media Index ETF)
The Global X MSCI China Consumer Discretionary ETF in 2018 (formerly known as the Global X China Consumer ETF)
The Global X MSCI China Energy ETF in 2018 (formerly known as the Global X China Energy ETF)
The Global X MSCI China Financials ETF in 2018 (formerly known as the Global X China Financials ETF)
The Global X MSCI China Industrials ETF in 2018 (formerly known as the Global X China Industrials ETF)
The Global X MSCI China Materials ETF in 2018 (formerly known as the Global X China Materials ETF)
1


The Global X MSCI China Communication Services ETF in 2018 (formerly known as the Global X NASDAQ China Technology ETF)
The Global X MSCI Next Emerging & Frontier ETF in 2019 (formerly known as the Global X Next Emerging & Frontier ETF)
The Global X Renewable Energy Producers ETF in 2021 (formerly known as the Global X YieldCo & Renewable Energy Income ETF until January 31, 2021 and prior to 2018 previously known as the Global X YieldCo Index ETF)
The Global X MSCI Norway ETF in 2021 (formerly known as the Global X FTSE Nordic Region ETF)
The Global X Disruptive Materials ETF in 2022 (formerly known as the Global X Advanced Materials ETF)

On October 29, 2021, the Global X MSCI Norway ETF (the “Acquired Fund”) was reorganized into the Global X FTSE Nordic Region ETF (the “Acquiring Fund”), each a separate series of the Trust (together, the “Combined Fund”) and the Combined Fund was renamed the Global X MSCI Norway ETF. As a result of the Reorganization as of the close of business on October 29, 2021, the Combined Fund assumed the performance and accounting history of the Acquired Fund.

The Global X DAX Germany ETF, Global X NASDAQ 100® Covered Call ETF and Global X S&P 500® Covered Call ETF (each, a "Successor Fund") are each the successor to the Horizons DAX Germany ETF, Horizons NASDAQ 100® Covered Call ETF and Horizons S&P 500® Covered Call ETF, respectively (each, a "Predecessor Fund"), each a series of Horizons ETF Trust I. The Predecessor Funds were managed by Horizons ETFs Management (US) LLC (the "Predecessor Adviser"). Each applicable Successor Fund has the same investment objective and investment strategies as those of the respective Predecessor Fund. Each Successor Fund acquired the assets and assumed all of the liabilities of the applicable Predecessor Fund on December 24, 2018 (the "Reorganization").

The investment objective of each Fund is to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of a specified benchmark index ("Underlying Index"). A Fund's investment objective and Underlying Index may be changed without shareholder approval. Shareholders will be given 60 days prior notice of any change of a Fund's investment objective. If Global X Management Company LLC, the Funds' investment adviser ("GXMC" or the "Adviser"), changes the Underlying Index, the name of the Fund may be changed as well. Each Fund is managed by the Adviser.

The Funds offer and issue shares at net asset value per share ("NAV") only in aggregations of a specified number of shares (each, a "Creation Unit" or a "Creation Unit Aggregation"), generally in exchange for a basket of securities included in each Fund's Underlying Index ("Deposit Securities"), together with the deposit of a specified cash payment ("Cash Component"). The shares of the Funds ("Shares") are, or will be, listed and expected to be traded on either NYSE Arca, NASDAQ or Cboe BZX.

Shares trade in the secondary market and elsewhere at market prices that may be at, above or below NAV. Shares are redeemable only in Creation Unit Aggregations and, generally, in exchange for portfolio securities and a Cash Component. The number of Shares per Creation Unit of each Fund are as follows:
 
 
Fund
Number of Shares per
Creation Unit
Global X MSCI Colombia ETF 10,000
Global X MSCI China Consumer Discretionary ETF 10,000
Global X MSCI China Industrials ETF 10,000
Global X MSCI China Communication Services ETF 10,000
Global X MSCI China Financials ETF 10,000
Global X MSCI China Energy ETF 10,000
Global X MSCI China Materials ETF 10,000
Global X MSCI Norway ETF 10,000
Global X FTSE Southeast Asia ETF 10,000
Global X MSCI Argentina ETF 10,000
Global X MSCI Greece ETF 10,000
Global X MSCI Nigeria ETF 10,000
Global X MSCI Next Emerging & Frontier ETF 10,000
Global X MSCI Portugal ETF 10,000
Global X DAX Germany ETF 10,000
2


 
Fund
Number of Shares per
Creation Unit
Global X MSCI Pakistan ETF 10,000
Global X MSCI China Consumer Staples ETF 10,000
Global X MSCI China Health Care ETF 10,000
Global X MSCI China Information Technology ETF 10,000
Global X MSCI China Real Estate ETF 10,000
Global X MSCI China Utilities ETF 10,000
Global X MSCI Vietnam ETF 10,000
Global X Copper Miners ETF 10,000
Global X Silver Miners ETF 10,000
Global X Gold Explorers ETF 10,000
Global X Uranium ETF 10,000
Global X Lithium & Battery Tech ETF 10,000
Global X SuperDividend® ETF
10,000
Global X Social Media ETF 10,000
Global X Guru® Index ETF
10,000
Global X SuperIncome™ Preferred ETF 10,000
Global X SuperDividend® U.S. ETF
10,000
Global X S&P 500® Covered Call ETF
10,000
Global X NASDAQ 100® Covered Call ETF
10,000
Global X MSCI SuperDividend® Emerging Markets ETF
10,000
Global X SuperDividend® REIT ETF
10,000
Global X Renewable Energy Producers ETF 10,000
Global X S&P 500® Catholic Values ETF
10,000
Global X MSCI SuperDividend® EAFE ETF
10,000
Global X E-commerce ETF 10,000
Global X Russell 2000 Covered Call ETF 10,000
Global X S&P Catholic Values Developed ex-U.S. ETF 10,000
Global X Nasdaq 100® Covered Call & Growth ETF
10,000
Global X S&P 500® Covered Call & Growth ETF
10,000
Global X Emerging Markets Internet & E-commerce ETF 10,000
Global X S&P 500® Tail Risk ETF
10,000
Global X S&P 500® Risk Managed Income ETF
10,000
Global X S&P 500® Collar 95-110 ETF
10,000
Global X NASDAQ 100® Tail Risk ETF
10,000
Global X NASDAQ 100® Risk Managed Income ETF
10,000
Global X NASDAQ 100® Collar 95-110 ETF
10,000
Global X Disruptive Materials ETF 10,000
Global X S&P Catholic Values U.S. Aggregate Bond ETF 10,000

The Trust reserves the right to offer a "cash" option for creations and redemptions of Shares. Shares may be issued in advance of receipt of Deposit Securities subject to various conditions, including a requirement to maintain on deposit with the Trust cash equal to 110% of the market value of the missing Deposit Securities. The required amount of deposit may be changed by the Adviser from time to time. See the "Purchase and Redemption of Creation Units" section of this SAI for further discussion. In each instance of such cash creations or redemptions, transaction fees may be imposed that will be in addition to the transaction fees associated with in-kind creations or redemptions. In all cases, such conditions and fees will be limited in accordance with the requirements of the Securities and Exchange Commission ("SEC") applicable to management investment companies offering redeemable securities.
3



 
ADDITIONAL INVESTMENT INFORMATION

EXCHANGE LISTING AND TRADING
 
A discussion of exchange listing and trading matters associated with an investment in each Fund is contained in the applicable Prospectus. The discussion below supplements, and should be read in conjunction with, that section of such Prospectus.
 
Shares of each Fund are listed for trading on the Exchange and trade throughout the day on the Exchange and other secondary markets. There can be no assurance that each Fund will continue to meet the listing requirements of the exchange on which it is listed. The Exchange may, but is not required to, remove the Shares of a Fund from its listing if (1) following the initial twelve-month period beginning upon the commencement of trading of the Fund, there are fewer than fifty (50) record and/or beneficial holders of the Fund for thirty (30) or more consecutive trading days, (2) the value of the Underlying Index on which the Fund is based is no longer calculated or available, or (3) any other event shall occur or condition exist that, in the opinion of the Exchange, makes further dealings on the Exchange inadvisable. The Exchange will remove the Shares of a Fund from listing and trading upon termination of the Fund.
 
As in the case of other publicly traded securities, brokers' commissions on transactions will be based on negotiated commission rates at customary levels.
 
In order to provide additional information regarding the indicative value of Shares of each Fund, the Exchange or a designated "indicative optimized portfolio value" ("IOPV") provider disseminates every fifteen seconds, through the facilities of the Consolidated Tape Association, an updated IOPV for each Fund as calculated by an information provider or a market data vendor. The Trust is not involved in or responsible for any aspect of the calculation or dissemination of the IOPVs and makes no representation or warranty as to the accuracy of the IOPVs.
 
An IOPV has a securities value component and a cash component. The securities values included in an IOPV are the values of the Deposit Securities for the applicable Fund. The IOPV is generally determined by using both current market quotations and/or price quotations obtained from broker-dealers that may trade in the portfolio securities held by a Fund. The quotations of certain Fund holdings may not be updated during U.S. trading hours if such holdings do not trade in the United States. While the IOPV reflects the current market value of the Deposit Securities required to be deposited in connection with the purchase of a Creation Unit Aggregation, it does not necessarily reflect the precise composition of the current portfolio of securities held by the applicable Fund at a particular point in time, because the current portfolio of the Fund may include securities that are not a part of the Deposit Securities. Furthermore, the IOPV does not capture certain items such as tax liability accruals, which may occur for Fund investments in certain foreign jurisdictions. Therefore, each Fund's IOPV disseminated during the Exchange's trading hours should not be viewed as a real time update of the Fund's NAV, which is calculated only once a day.

In addition to the securities component described in the preceding paragraph, the IOPV for each Fund includes a cash component consisting of estimated accrued dividends and other income, less expenses. If applicable, each IOPV also reflects changes in currency exchange rates between the U.S. Dollar and the applicable foreign currency. 

The Trust reserves the right to adjust the share prices of the Funds in the future to maintain convenient trading ranges for investors. Any adjustments would be accomplished through stock splits or reverse stock splits, which would have no effect on the net assets of the applicable Fund.

INVESTMENT OBJECTIVE, STRATEGIES AND RISKS
 
Each Fund seeks to achieve its objective by investing primarily in securities issued by companies that comprise the relevant Underlying Index and through transactions that provide substantially similar exposure to securities in the Underlying Index. Each Fund operates as an index fund and will not be actively managed. Adverse performance of a security in a Fund's portfolio will ordinarily not result in the elimination of the security from the Fund's portfolio. Each Fund invests at least 80% of its total assets in the securities of its Underlying Index and, if applicable, in American Depositary Receipts ("ADRs") and Global Depositary Receipts ("GDRs") (collectively "Depositary Receipts") based on the securities in its Underlying Index. Each Fund may also invest up to 20% of its assets in certain futures, options and swap contracts, cash and cash equivalents, as well as in stocks not included in its Underlying Index but which the Adviser believes will help the Fund track its Underlying Index.

All Funds (other than the Global X Russell 2000 Covered Call ETF and the Global X S&P Catholic Values U.S. Aggregate Bond ETF, which uses a representative sampling strategy) use a replication strategy. A replication strategy is an indexing
4


strategy that involves investing in the securities of the Underlying Index in approximately the same proportions as in the Underlying Index. However, a Fund may utilize a representative sampling strategy with respect to its Underlying Index when a replication strategy might be detrimental to its shareholders, such as when there are practical difficulties or substantial costs involved in compiling a portfolio of securities to follow its Underlying Index, or, in certain instances, when securities in the Underlying Index become temporarily illiquid, unavailable or less liquid, or due to legal restrictions (such as diversification requirements that apply to the Funds but not the Underlying Index).
 
Because of potential constraints that may arise for purchasing all of the securities in the Underlying Index, the Global X Russell 2000 Covered Call ETF and the Global X S&P Catholic Values U.S. Aggregate Bond ETF may not purchase all of the securities in the applicable Underlying Index. Instead, the Adviser will utilize a representative sampling strategy in an effort to hold a portfolio of securities with generally the same risk and return characteristics as the applicable Underlying Index.

Each Fund has adopted a non-fundamental investment policy to invest, under normal circumstances, at least 80% of the value of its net assets, plus the amount of any borrowings for investment purposes, in securities of the Fund's Underlying Index and in Depositary Receipts based on securities in the Underlying Index. A Fund also may have adopted an additional non-fundamental policy to invest at least 80% of its total assets in securities as disclosed in its Prospectus. Each Fund has also adopted a policy to provide its shareholders with at least 60 days prior written notice of a change to its investment objective. If, subsequent to an investment, the 80% requirement is no longer met, a Fund's future investments will be made in a manner that will bring the Fund into compliance with this policy.
 
The following supplements the information contained in the Prospectus concerning the investment objectives and policies of the Funds.

CYBER SECURITY RISK. With the increased use of technologies such as the Internet to conduct business, each Fund is susceptible to operational, information security and related risks. In general, cyber incidents can result from deliberate attacks or unintentional events. Cyber attacks include, but are not limited to, gaining unauthorized access to digital systems (e.g., through “hacking” or malicious software coding) for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption. Cyber attacks may also be carried out in a manner that does not require gaining unauthorized access, such as causing denial-of-service attacks on websites (i.e., efforts to make network services unavailable to intended users). Cyber security failures or breaches suffered by a Fund’s adviser, distributor and other service providers (including, but not limited to, index providers, fund accountants, custodians, transfer agents and administrators), market makers, Authorized Participants (as defined below) and the issuers of securities in which the Funds invest have the ability to cause disruptions and impact business operations potentially resulting in financial losses, interference with a Fund’s ability to calculate its NAV, impediments to trading, the inability of Fund shareholders to transact business, violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, or additional compliance costs. In addition, substantial costs may be incurred in order to prevent any cyber incidents in the future. While the Funds have established business continuity plans in the event of, and risk management systems to prevent, such cyber attacks, there are inherent limitations in such plans and systems, including the possibility that certain risks have not been identified. Furthermore, the Funds cannot control the cyber security plans and systems put in place by service providers to the Funds and issuers in which the Funds invest, market makers or Authorized Participants. The Funds and their shareholders could be negatively impacted as a result of any cyber incidents impacting such parties.

DEPOSITARY RECEIPTS. Each Fund will normally invest at least 80% of its total assets in the securities of its Underlying Index and in Depositary Receipts based on the securities in its Underlying Index. ADRs are receipts that are traded in the United States evidencing ownership of the underlying foreign securities and are denominated in U.S. dollars. GDRs are receipts issued by a non-U.S. financial institution evidencing ownership of underlying foreign or U.S. securities and usually are denominated in foreign currencies. GDRs may not be denominated in the same currency as the securities they represent. Generally, GDRs are designed for use in the foreign securities markets.

To the extent each Fund invests in ADRs, such ADRs will be listed on a national securities exchange. To the extent each Fund invests in GDRs, such GDRs will be listed on a foreign exchange. The Funds will not invest in any unlisted Depositary Receipt or any Depositary Receipt for which pricing information is not readily available. Generally, all Depositary Receipts must be sponsored. The Funds, however, may invest in unsponsored Depositary Receipts under certain limited circumstances. A non-sponsored depository may not provide the same shareholder information that a sponsored depositary is required to provide under its contractual arrangement with the issuer. Therefore, there may be less information available regarding such issuers and there may not be a correlation between such information and the market value of the Depositary Receipts.

NON-DIVERSIFICATION RISK. Non-diversification risk is the risk that a non-diversified fund may be more susceptible to adverse financial, economic or other developments affecting any single issuer, and more susceptible to greater losses because of
5


these developments. Each Fund (except the Global X MSCI Next Emerging & Frontier ETF, Global X SuperDividend® ETF, Global X SuperDividend® U.S. ETF, Global X MSCI SuperDividend® Emerging Markets ETF, Global X MSCI SuperDividend® EAFE ETF, Global X SuperDividend® REIT ETF, Global X SuperIncome™ Preferred ETF, Global X Guru® Index ETF, Global X S&P 500® Catholic Values ETF, Global X S&P 500® Covered Call ETF, Global X Russell 2000 Covered Call ETF, Global X S&P 500® Covered Call & Growth ETF, Global X S&P 500® Tail Risk ETF, Global X S&P 500® Risk Managed Income ETF and Global X S&P 500® Collar 95-110 ETF) is classified as “non-diversified” for purposes of the 1940 Act. A “non-diversified” classification means that a Fund is not limited by the 1940 Act with regard to the percentage of its assets that may be invested in the securities of a single issuer. The securities of a particular issuer may dominate the Underlying Index of a Fund and, consequently, a Fund’s investment portfolio. Each Fund may also concentrate its investments in a particular industry or group of industries, as noted in the description of the Fund. The securities of issuers in particular industries may dominate the Underlying Index of such a Fund and, consequently, the Fund’s investment portfolio. This may adversely affect its performance or subject the Fund’s Shares to greater price volatility than that experienced by less concentrated investment companies.
 
Each Fund intends to maintain the required level of diversification and otherwise conduct its operations so as to qualify as a “regulated investment company” for purposes of the Internal Revenue Code of 1986, as amended (the “Code”), and to relieve the Fund of any liability for federal income tax to the extent that its earnings are distributed to shareholders. Compliance with the diversification requirements of the Code may limit the investment flexibility of certain Funds and may make it less likely that such a Fund will meet its investment objective.
 
SHORT-TERM INSTRUMENTS AND TEMPORARY INVESTMENTS. To the extent consistent with its investment policies, each Fund may invest in short-term instruments, including money market instruments, on an ongoing basis to provide liquidity or for other reasons. Money market instruments are generally short-term investments that may include but are not limited to: (i) shares of money market funds; (ii) obligations issued or guaranteed by the U.S. government, its agencies or instrumentalities (including government-sponsored enterprises ("GSE")); (iii) negotiable certificates of deposit ("CDs"), bankers' acceptances, fixed time deposits, bank notes and other obligations of U.S. and foreign banks (including foreign branches) and similar institutions; (iv) commercial paper rated at the date of purchase "Prime-1" by Moody's Investors Service, Inc. ("Moody's"), "A-1" by Standard & Poor's Rating Service ("S&P") or, if unrated, of comparable quality as determined by the Adviser; (v) non-convertible corporate debt securities (e.g., bonds and debentures) with remaining maturities at the date of purchase of not more than 397 days and that satisfy the rating requirements set forth in Rule 2a-7 under the 1940 Act; (vi) repurchase agreements; and (vii) short-term U.S. dollar-denominated obligations of foreign banks (including U.S. branches) that, in the opinion of the Adviser, are of comparable quality to obligations of U.S. banks which may be purchased by a Fund. Any of these instruments may be purchased on a current or a forward-settled basis.

Pursuant to amendments adopted by the SEC in July 2014, money market fund regulations require money market funds that do not meet the definitions of a retail money market fund or government money market fund to transact at a floating NAV per share (similar to all other non-money market mutual funds), instead of at a $1 stable share price, as well as permit (or, in certain circumstances, require) money market funds to impose liquidity fees and redemption gates for use in times of market stress. Any impact on the trading and value of money market instruments as a result of these money market fund regulations may negatively affect a Fund's yield and return potential.

Time deposits are non-negotiable deposits maintained in banking institutions for specified periods of time at stated interest rates. Bankers' acceptances are time drafts drawn on commercial banks by borrowers, usually in connection with international transactions. Commercial paper represents short-term unsecured promissory notes issued in bearer form by banks or bank holding companies, corporations and finance companies. Certificates of deposit are negotiable certificates issued against funds deposited in a commercial bank for a definite period of time and earning a specified return. Bankers' acceptances are negotiable drafts or bills of exchange, normally drawn by an importer or exporter to pay for specific merchandise, which are "accepted" by a bank, meaning, in effect, that the bank unconditionally agrees to pay the face value of the instrument on maturity. Fixed time deposits are bank obligations payable at a stated maturity date and bearing interest at a fixed rate. Fixed time deposits may be withdrawn on demand by the investor but may be subject to early withdrawal penalties that vary depending upon market conditions and the remaining maturity of the obligation. There are no contractual restrictions on the right to transfer a beneficial interest in a fixed time deposit to a third party. Bank notes generally rank junior to deposit liabilities of banks and pari passu with other senior, unsecured obligations of the bank. Bank notes are classified as "other borrowings" on a bank's balance sheet, while deposit notes and certificates of deposit are classified as deposits. Bank notes are not insured by the FDIC or any other insurer.
 
Each Fund may invest a portion of its assets in the obligations of foreign banks and foreign branches of domestic banks. Such obligations include Eurodollar Certificates of Deposit ("ECDs"), which are U.S. dollar-denominated certificates of deposit issued by offices of foreign and domestic banks located outside the United States; Eurodollar Time Deposits ("ETDs"), which
6


are U.S. dollar-denominated deposits in a foreign branch of a U.S. bank or a foreign bank; Canadian Time Deposits ("CTDs"), which are essentially the same as ETDs except they are issued by Canadian offices of major Canadian banks; Schedule Bs, which are obligations issued by Canadian branches of foreign or domestic banks; Yankee Certificates of Deposit ("Yankee CDs"), which are U.S. dollar-denominated certificates of deposit issued by a U.S. branch of a foreign bank and held in the United States; and Yankee Bankers' Acceptances ("Yankee BAs"), which are U.S. dollar-denominated bankers' acceptances issued by a U.S. branch of a foreign bank and held in the United States.
 
Commercial paper purchased by the Funds may include asset-backed commercial paper. Asset-backed commercial paper is issued by a special purpose entity that is organized to issue the commercial paper and to purchase trade receivables or other financial assets. The credit quality of asset-backed commercial paper depends primarily on the quality of these assets and the level of any additional credit support.

EQUITY SWAPS, TOTAL RATE OF RETURN SWAPS AND CURRENCY SWAPS. Each Fund (other than the Global X MSCI Colombia ETF) may invest up to 20% of its total assets in swap contracts.
 
A swap is an agreement involving the exchange by a Fund with another party of their respective commitments to pay or receive payments at specified dates based upon or calculated by reference to changes in specified prices or rates (e.g., interest rates in the case of interest rate swaps) based on a specified amount (the "notional" amount). Some swaps currently are, and more in the future will be, exchange-traded and centrally cleared. Examples of swap agreements include, but are not limited to, equity, index or other total return swaps and foreign currency swaps.
 
Each Fund may enter into equity swap contracts to invest in a market without owning or taking physical custody of securities in circumstances in which direct investment is restricted for legal reasons or is otherwise impracticable. These instruments provide a great deal of flexibility. For example, a counterparty may agree to pay a Fund the amount, if any, by which the notional amount of the equity swap contract would have increased in value had it been invested in particular stocks (or an index of stocks), plus the dividends that would have been received on those stocks. In these cases, a Fund may agree to pay to the counterparty the amount, if any, by which that notional amount would have decreased in value had it been invested in the stocks. Therefore, the return to a Fund on any equity swap contract should be the gain or loss on the notional amount plus dividends on the stocks less the interest paid by the Fund on the notional amount. In other cases, the counterparty and the Fund may each agree to pay the other the difference between the relative investment performances that would have been achieved if the notional amount of the equity swap contract had been invested in different stocks (or indices of stocks).
 
Total rate of return swaps are contracts that obligate a party to pay or receive interest in exchange for the payment by the other party of the total return generated by a security, a basket of securities, an index or an index component. The Funds also may enter into currency swaps, which involve the exchange of the rights of the Funds and another party to make or receive payments in specific currencies. Currency swaps involve the exchange of rights of the Funds and another party to make or receive payments in specific currencies.
 
Some swaps transactions are entered into on a net basis, i.e., the two payment streams are netted out, with a Fund receiving or paying, as the case may be, only the net amount of the two payments. A Fund will enter into equity swaps only on a net basis. Payments may be made at the conclusion of an equity swap contract or periodically during its term. Equity swaps do not involve the delivery of securities or other underlying assets. Accordingly, the risk of loss with respect to equity swaps is limited to the net amount of payments that such Fund is contractually obligated to make. If the other party to an equity swap, or any other swap entered into on a net basis, defaults, a Fund's risk of loss consists of the net amount of payments that such Fund is contractually entitled to receive, if any. In contrast, other swaps transactions may involve the payment of the gross amount owed. For example, currency swaps usually involve the delivery of the entire principal amount of one designated currency in exchange for the other designated currency. Therefore, the entire principal value of a currency swap is subject to the risk that the other party to the swap will default on its contractual delivery obligations. To the extent that the amount payable by a Fund under a swap is covered by segregated cash or liquid assets, the Funds and the Adviser believe that transactions do not constitute senior securities under the 1940 Act and, accordingly, will not treat them as being subject to the Funds' borrowing restrictions.
 
Swaps that are centrally cleared are subject to the creditworthiness of the clearing organizations involved in the transaction. For example, a Fund could lose margin payments it has deposited with the clearing organization as well as the net amount of gains not yet paid by the clearing organization if it breaches its agreement with the Fund or becomes insolvent or goes into bankruptcy. In the event of bankruptcy of the clearing organization, the Fund may be entitled to the net amount of gains the Fund is entitled to receive plus the return of margin owed to it only in proportion to the amount received by the clearing organization's other customers, potentially resulting in losses to the Fund.
 
7


To the extent a swap is not centrally cleared, the use of swaps also involves the risk that a loss may be sustained as a result of the insolvency or bankruptcy of the counterparty or the failure of the counterparty to make required payments or otherwise comply with the terms of the agreement.
 
A Fund will not enter into any swap transactions unless the unsecured commercial paper, senior debt or claims-paying ability of the other party is rated either A, or A-1 or better by S&P or Fitch Ratings ("Fitch"); or A or Prime-1 or better by Moody's, or has received a comparable rating from another organization that is recognized as a nationally recognized statistical rating organization ("NRSRO") or, if unrated by such rating organization, is determined to be of comparable quality by the Adviser. If a counterparty's creditworthiness declines, the value of the swap might decline, potentially resulting in losses to a Fund. Changing conditions in a particular market area, whether or not directly related to the referenced assets that underlie the swap agreement, may have an adverse impact on the creditworthiness of the counterparty. For example, the counterparty may have experienced losses as a result of its exposure to a sector of the market that adversely affect its creditworthiness. If there is a default by the other party to such a transaction, a Fund will have contractual remedies pursuant to the agreements related to the transaction. Such contractual remedies, however, may be subject to bankruptcy and insolvency laws that may affect such Fund's rights as a creditor (e.g., the Fund may not receive the net amount of payments that it contractually is entitled to receive). The swap market has grown substantially in recent years with a large number of banks and investment banking firms acting both as principals and as agents utilizing standardized swap documentation. As a result, the swap market has become relatively liquid in comparison with markets for other similar instruments which are traded in the interbank market.
 
The use of equity, total rate of return and currency swaps is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions.
 
In connection with a Fund's position in a swaps contract, the Fund will segregate liquid assets or will otherwise cover its position in accordance with applicable SEC requirements.
 
FOREIGN CURRENCY TRANSACTIONS. To the extent consistent with its investment policies, each Fund may invest in forward foreign currency exchange contracts and foreign currency futures contracts. No Fund, however, expects to engage in currency transactions for speculative purposes or for the purpose of hedging against declines in the value of a Fund's assets that are denominated in a foreign currency. A Fund may enter into forward foreign currency exchange contracts and foreign currency futures contracts to facilitate local settlements or to protect against currency exposure in connection with its distributions to shareholders.
 
Foreign currency exchange contracts involve an obligation to purchase or sell a specified currency on a future date at a price set at the time of the contract. Forward currency contracts do not eliminate fluctuations in the values of portfolio securities but rather allow a Fund to establish a rate of exchange for a future point in time. Foreign currency futures contracts involve an obligation to deliver or acquire the specified amount of a specific currency, at a specified price and at a specified future time. Such futures contracts may be settled on a net cash payment basis rather than by the sale and delivery of the underlying currency. A Fund may incur costs in connection with forward foreign currency exchange and futures contracts and conversions of foreign currencies and U.S. dollars.

Liquid assets equal to the amount of a Fund's assets that could be required to consummate forward contracts will be segregated except to the extent the contracts are otherwise "covered." The segregated assets will be valued at market or fair value. If the market or fair value of such assets declines, additional liquid assets will be segregated daily so that the value of the segregated assets will equal the amount of such commitments by the Fund. A forward contract to sell a foreign currency is "covered" if a Fund owns the currency (or securities denominated in the currency) underlying the contract, or holds a forward contract (or call option) permitting the Fund to buy the same currency at a price that is (i) no higher than the Fund's price to sell the currency or (ii) greater than the Fund's price to sell the currency provided the Fund segregates liquid assets in the amount of the difference. A forward contract to buy a foreign currency is "covered" if a Fund holds a forward contract (or call option) permitting the Fund to sell the same currency at a price that is (i) as high as or higher than the Fund's price to buy the currency or (ii) lower than the Fund's price to buy the currency, provided the Fund segregates liquid assets in the amount of the difference.
 
FOREIGN INVESTMENTS – GENERAL. To the extent consistent with its investment policies, each Fund may invest in foreign securities. Investment in foreign securities involves special risks. These include market risk, interest rate risk and the risks of investing in securities of foreign issuers and of companies whose securities are principally traded outside the United States on foreign exchanges or foreign over-the-counter markets and in investments denominated in foreign currencies. Market risk involves the possibility that stock prices will decline over short or even extended periods. The stock markets tend to be cyclical, with periods of generally rising prices and periods of generally declining prices. These cycles will affect the value of a Fund to the extent that it invests in foreign stocks. In addition, the performance of investments in securities denominated in a foreign currency will depend on the strength of the foreign currency against the U.S. dollar and the interest rate environment in
8


the country issuing the currency. Absent other events which could otherwise affect the value of a foreign security (such as a change in the political climate or an issuer's credit quality), appreciation in the value of the foreign currency generally can be expected to increase the value of a foreign currency-denominated security in terms of U.S. dollars. A rise in foreign interest rates or decline in the value of the foreign currency relative to the U.S. dollar generally can be expected to depress the value of a foreign currency-denominated security.

There are other risks and costs involved in investing in foreign securities, which are in addition to the usual risks inherent in domestic investments. Investment in foreign securities involves higher costs than investment in U.S. securities, including higher transaction and custody costs as well as the imposition of additional taxes by foreign governments. Foreign investments also involve risks associated with the level of currency exchange rates, less complete financial information about the issuers, less market liquidity, more market volatility and political instability. Future political and economic developments, the possible imposition of withholding taxes on dividend income, the possible seizure or nationalization of foreign holdings, the possible establishment of exchange controls, or the adoption of other governmental restrictions might adversely affect an investment in foreign securities. Additionally, foreign banks and foreign branches of domestic banks are subject to less stringent reserve requirements, and to different accounting, auditing and recordkeeping requirements. Also, the legal remedies for investors may be more limited than the remedies available in the U.S.
 
Although a Fund may invest in securities denominated in foreign currencies, its portfolio securities and other assets are valued in U.S. dollars. Currency exchange rates may fluctuate significantly over short periods of time causing, together with other factors, a Fund's NAV to fluctuate as well. Currency exchange rates can be affected unpredictably by the intervention or the failure to intervene by U.S. or foreign governments or central banks, or by currency controls or political developments in the U.S. or abroad. To the extent that a Fund's total assets, adjusted to reflect a Fund's net position after giving effect to currency transactions, are denominated in the currencies of foreign countries, a Fund will be more susceptible to the risk of adverse economic and political developments within those countries.
 
Issuers of foreign securities may also suffer from social, political and economic instability. Such instability can lead to illiquidity or price volatility in foreign securities traded on affected markets. Foreign issuers may be subject to the risk that during certain periods the liquidity of securities of a particular issuer or industry, or all the securities within a particular region, will be adversely affected by economic, market or political events, or adverse investor perceptions, which may cause temporary or permanent devaluation of the relevant securities. In addition, if a market for a foreign security closes as a result of such instability, it may be more difficult to obtain accurate independently sourced prices for securities traded on these markets and may be difficult to value the affected foreign securities for extended periods of time.
 
A Fund also is subject to the possible imposition of exchange control regulations or freezes on the convertibility of currency. In addition, through the use of forward currency exchange contracts with other instruments, any net currency positions of the Funds may expose them to risks independent of their securities positions.
 
A Fund will be subject to foreign withholding taxes with respect to certain dividends or interest received from sources in foreign countries, and capital gains on securities of certain foreign countries may be subject to taxation. To the extent such taxes are not offset by credits or deductions allowed to investors under U.S. federal income tax law, they may reduce the net return to shareholders.
 
The costs attributable to investing abroad usually are higher than investments in domestic securities for several reasons, such as the higher cost of investment research, higher costs of custody of foreign securities, higher commissions paid on comparable transactions on foreign markets and additional costs arising from delays in settlements of transactions involving foreign securities.

Foreign markets also have different clearance and settlement procedures, and in certain markets there have been times when settlements have been unable to keep pace with the volume of securities transactions, making it difficult to conduct such transactions. Such delays in settlement could result in temporary periods when a portion of the assets of a Fund remain un-invested and no return is earned on such assets. The inability of a Fund to make intended security purchases or sales due to settlement problems could result either in losses to a Fund due to subsequent declines in value of the portfolio securities or, if a Fund has entered into a contract to sell the securities, could result in possible liability to the purchaser.
 
FOREIGN INVESTMENTS – EMERGING MARKETS. Countries with emerging markets are generally located in the Asia and Pacific regions, the Middle East, Eastern Europe, Central America, South America, and Africa. To the extent permitted by their investment policies, the Funds may invest their assets in countries with emerging economies or securities markets.

9


The securities markets of emerging countries are less liquid and subject to greater price volatility, and have a smaller market capitalization, than the securities markets of more developed countries. In certain countries, there may be fewer publicly traded securities and the market may be dominated by a few issues or sectors. Issuers and securities markets in such countries are not subject to as extensive and frequent accounting, financial and other reporting requirements or as comprehensive government regulations as are issuers and securities markets in the U.S. In particular, the assets and profits appearing on the financial statements of emerging country issuers may not reflect their financial position or results of operations in the same manner as financial statements for U.S. issuers. Substantially less information may be publicly available about emerging country issuers than is available about issuers in the United States.
 
Emerging country securities markets are typically marked by a high concentration of market capitalization and trading volume in a small number of issuers representing a limited number of industries, as well as a high concentration of ownership of such securities by a limited number of investors. The markets for securities in certain emerging countries are in the earliest stages of their development. Even the markets for relatively widely traded securities in emerging countries may not be able to absorb, without price disruptions, a significant increase in trading volume or trades of a size customarily undertaken by institutional investors in the securities markets of developed countries. The limited size of many of these securities markets can cause prices to be erratic for reasons apart from factors that affect the soundness and competitiveness of the securities issuers. For example, prices may be unduly influenced by traders who control large positions in these markets. Additionally, market making and arbitrage activities are generally less extensive in such markets, which may contribute to increased volatility and reduced liquidity of such markets. The limited liquidity of emerging country securities may also affect a Fund’s ability to accurately value its portfolio securities or to acquire or dispose of securities at the price and time it wishes to do so or in order to meet redemption requests.
 
Certain emerging market countries may have antiquated legal systems, which may adversely impact the Funds. For example, while the potential liability of a shareholder in a U.S. corporation with respect to acts of the corporation is generally limited to the amount of the shareholder’s investment, the notion of limited liability is less clear in certain emerging market countries. Similarly, the rights of investors in emerging market companies may be more limited than those of shareholders in U.S. corporations.

Transaction costs, including brokerage commissions or dealer mark-ups, in emerging countries may be higher than in developed securities markets. In addition, existing laws and regulations are often inconsistently applied. As legal systems in emerging countries develop, foreign investors may be adversely affected by new or amended laws and regulations. In circumstances where adequate laws exist, it may not be possible to obtain swift and equitable enforcement of the law.
 
Certain emerging market countries may restrict or control foreign investments in their securities markets. These restrictions may limit a Fund’s investment in certain emerging countries and may increase the expenses of such Fund. Certain emerging countries require governmental approval prior to investments by foreign persons or limit investment by foreign persons to only a specified percentage of an issuer’s outstanding securities or a specific class of securities which may have less advantageous terms (including price) than securities of the company available for purchase by nationals. In addition, the repatriation of both investment income and capital from emerging countries may be subject to restrictions which require governmental consents or prohibit repatriation entirely for a period of time. Even where there is no outright restriction on repatriation of capital, the mechanics of repatriation may affect certain aspects of the operation of a Fund. A Fund may be required to establish special custodial or other arrangements before investing in certain emerging countries.
 
Certain issuers in emerging market countries may utilize share blocking schemes. Share blocking refers to a practice, in certain foreign markets, where voting rights related to an issuer’s securities are predicated on these securities being blocked from trading at the custodian or sub-custodian level, for a period of time around a shareholder meeting. These restrictions have the effect of barring the purchase and sale of certain voting securities within a specified number of days before, and in certain instances, after a shareholder meeting where a vote of shareholders will be taken. Share blocking may prevent a Fund from buying or selling securities for a period of time. During the time that shares are blocked, trades in such securities will not settle. The blocking period can last up to several weeks. The process for having a blocking restriction lifted can be quite onerous with the particular requirements varying widely by country. In addition, in certain countries, the block cannot be removed. As a result of the ramifications of voting ballots in markets that allow share blocking, the Adviser, on behalf of a Fund, reserves the right to abstain from voting proxies in those markets.
 
Emerging countries may be subject to a substantially greater degree of economic, political and social instability and disruption than more developed countries. This instability may result from, among other things, the following: (i) authoritarian governments or military involvement in political and economic decision making, including changes or attempted changes in governments through extra-constitutional means; (ii) popular unrest associated with demands for improved political, economic or social conditions; (iii) internal insurgencies; (iv) hostile relations with neighboring countries; (v) ethnic, religious and racial
10


disaffection or conflict; (vi) the absence of developed legal structures governing foreign private investments and private property; (vii) the small current size of the markets for such securities and the currently low or nonexistent volume of trading, which result in a lack of liquidity and in greater price volatility; (viii) certain national policies which may restrict a Fund’s investment opportunities, including restrictions on investment in issuers or industries deemed sensitive to national interest; (ix) foreign taxation; (x) the absence, in some cases, of a capital market structure or market-oriented economy; and (xi) the possibility that economic developments may be slowed or reversed by unanticipated political or social events in such countries. Such economic, political and social instability could disrupt the principal financial markets in which a Fund may invest and adversely affect the value of the Fund’s assets. A Fund’s investments can also be adversely affected by any increase in taxes or by political, economic or diplomatic developments.
 
The economies of emerging countries may suffer from unfavorable growth of gross domestic product, rates of inflation, capital reinvestment, resources, self-sufficiency and balance of payments. Many emerging countries have experienced in the past, and continue to experience, high rates of inflation. In certain countries inflation has at times accelerated rapidly to hyperinflationary levels, creating a negative interest rate environment and sharply eroding the value of outstanding financial assets in those countries. Other emerging countries, on the other hand, have experienced deflationary pressures and are in economic recessions. In addition, many emerging countries are also highly dependent on international trade and exports, including exports of oil and other commodities to sustain their economic growth. As a result, emerging countries are particularly vulnerable to downturns of the world economy.

A portion of a Fund’s investments may be in Russian securities and instruments. As a result of recent events, the United States and the Economic and Monetary Union of the European Union, along with the regulatory bodies of a number of countries, including Japan, Australia, Norway, Switzerland and Canada, have imposed economic sanctions and renewed existing economic sanctions, which consist of prohibiting certain securities trades, prohibiting certain private transactions in the energy sector, asset freezes, and prohibition of all business, against certain Russian individuals and Russian corporate entities. New sanctions announced in February 2022 include measures against the Russian financial sector and restrictions on business in the Donetsk and Luhansk regions of Ukraine. The United States and other nations or international organizations may impose additional, broader economic sanctions or take other actions that may adversely affect Russian-related issuers in the future. These sanctions, any future sanctions or other actions, or even the threat of further sanctions or other actions, may negatively affect the value and liquidity of a Fund’s investments. For example, a Fund may be prohibited from investing in securities issued by companies subject to such sanctions. In addition, the sanctions may require a Fund to freeze its existing investments in Russian companies, prohibiting the Fund from buying, selling or otherwise transacting in these investments. Russia may undertake countermeasures or retaliatory actions, which may further impair the value and liquidity of a Fund’s portfolio and potentially disrupt its operations. Also, if an affected security is included in a Fund's Underlying Index, the Fund may, where practicable, seek to eliminate its holdings of the affected security by employing or augmenting its representative sampling strategy to seek to track the investment results of its Underlying Index. The use of (or increased use of) a representative sampling strategy may increase a Fund’s tracking error risk. These sanctions may also lead to changes in a Fund’s Underlying Index. A Fund’s index provider may remove securities from the Underlying Index or implement caps on the securities of certain issuers that have been subject to recent economic sanctions. In such an event, it is expected that a Fund will rebalance its portfolio to bring it in line with its Underlying Index as a result of any such changes, which may result in transaction costs and increased tracking error.
For these or other reasons, a Fund could seek to suspend redemptions of Creation Units, including in the event that an emergency exists in which it is not reasonably practicable for the Fund to dispose of its securities or to determine its net asset value. A Fund could also, among other things, limit or suspend creations of Creation Units. During the period that creations or redemptions are affected, Shares could trade at a significant premium or discount to their net asset value. In the case of a period during which creations are suspended, a Fund could experience substantial redemptions, which may cause the Fund to experience increased transaction costs and make greater taxable distributions to shareholders of a Fund. A Fund could liquidate all or a portion of its assets, which may be at unfavorable prices. A Fund may also change its investment objective by, for example, seeking to track an alternative index.

Investments in Chinese A-Shares may pose additional risks relative to the risks of investing in emerging markets securities generally. A-Shares are issued by companies incorporated in mainland China and are traded in Renminbi (“RMB”) on the Shanghai Stock Exchange and Shenzhen Stock Exchange. Historically, direct participation in the A-Shares market has been limited to mainland Chinese investors. Foreign investors have been able to invest in the mainland Chinese securities markets through certain market-access programs. Among other programs, foreign investors may invest in A-Shares listed and traded on the Shanghai Stock Exchange and Shenzhen Stock Exchange through the Shanghai - Hong Kong and Shenzhen - Hong Kong Stock Connect programs (“Stock Connect Programs”), which launched in 2014 and 2016, respectively. These Stock Connect Programs are novel, and Chinese regulators may alter or eliminate these programs at any time. The Stock Connect Programs are securities trading and clearing programs between either the Shanghai Stock Exchange (“SSE”) or Shenzhen Stock Exchange
11


(“SZSE”) and The Stock Exchange of Hong Kong Limited (“SEHK”), China Securities Depository and Clearing Corporation Limited and Hong Kong Securities Clearing Company Limited. The Stock Connect Programs are designed to permit mutual stock market access between mainland China and Hong Kong by allowing investors to trade and settle shares on each market via their local exchanges. Trading through the Stock Connect Programs is subject to a daily quota (“Daily Quota”), which limits the maximum daily net purchases on any particular day by Hong Kong investors (and foreign investors trading through Hong Kong) trading mainland Chinese listed securities and mainland Chinese investors trading Hong Kong listed securities trading through the relevant Stock Connect Program. Accordingly, direct investments in A-Shares will be limited by the Daily Quota that limits total purchases through the Stock Connect Programs. The Daily Quota is utilized by all non-mainland Chinese investors on a first-come-first-serve basis. As such, buy orders for A-Shares would be rejected once the Daily Quota is exceeded (although the investors would be permitted to sell A-Shares regardless of the Daily Quota balance). The Daily Quota may restrict a Fund’s ability to invest in A-Shares through the Stock Connect Programs on a timely basis, which could affect the Funds’ ability to effectively pursue its investment strategy. The Daily Quota is also subject to change.
In addition, investments made through Stock Connect are subject to trading, clearance and settlement procedures that are still relatively untested in mainland China, which could pose risks to a Fund. Moreover, A-Shares purchased through a Stock Connect Program generally may not be sold, purchased or otherwise transferred other than through the Stock Connect Program in accordance with applicable rules. A primary feature of the Stock Connect Programs is the application of the home market’s laws and rules applicable to investors in A-Shares (i.e. mainland China). Therefore, a Fund’s investments in A-Shares via the Stock Connect Programs are subject to Chinese securities regulations and listing rules, among other restrictions. While A-Shares must be designated as eligible to be traded under a Stock Connect Program (such eligible A-Shares listed on the SSE, the “SSE Securities,” and such eligible A-Shares listed on the SZSE, the “SZSE Securities”), those A-Shares may also lose such designation, and if this occurs, such A-Shares may be sold but could no longer be purchased through the applicable Stock Connect Program. In addition, the Stock Connect Programs will only operate on days when both the Chinese and Hong Kong markets are open for trading and when banking services are available in both markets on the corresponding settlement days. Therefore, an investment in A-Shares through the Stock Connect Programs may subject a Fund to the risk of price fluctuations on days when the Chinese markets are open, but the SEHK is not. Each of the SEHK, SSE and SZSE reserves the right to suspend trading under the Stock Connect Programs under certain circumstances. Where such a suspension of trading is effected, a Fund’s ability to access A-Shares through the Stock Connect Programs will be adversely affected.
A Fund’s investments in A-Shares through a Stock Connect Program are held by its custodian in accounts in the Central Clearing and Settlement System (“CCASS”) maintained by the Hong Kong Securities Clearing Company Limited (“HKSCC”), which in turn holds the A-Shares, as the nominee holder, through an omnibus securities account in its name registered with the CSDCC. The precise nature and rights of a Fund as the beneficial owner of the SSE Securities or SZSE Securities through HKSCC as nominee is not well defined under Chinese law. There is a lack of a clear definition of, and distinction between, legal ownership and beneficial ownership under Chinese law and there have been few cases involving a nominee account structure in Chinese courts. The exact nature and methods of enforcement of the rights and interests of a Fund under Chinese law is also uncertain, and there is a possibility that the SSE Securities or SZSE Securities may not be regarded as held for the beneficial ownership of a Fund in the event of a credit event with respect to HKSCC, the Fund’s custodian, or other market participants.
Notwithstanding the fact that HKSCC does not claim proprietary interests in the SSE Securities or SZSE Securities held in its omnibus stock account in the CSDCC, the CSDCC as the share registrar for SSE- or SZSE-listed companies will still treat HKSCC as one of the shareholders when it handles corporate actions in respect of such SSE Securities or SZSE Securities. HKSCC monitors the corporate actions affecting SSE Securities and SZSE Securities and keeps participants of CCASS informed of all such corporate actions that require CCASS participants to take steps in order to participate in them. A Fund will therefore depend on HKSCC for both settlement and notification and implementation of corporate actions.

Other market access programs, each of which may present different risks, may also be used to provide non-Chinese investors with exposure to A-Shares. To the extent that the Funds do not utilize such other market access programs, any disruptions to a Stock Connect Program would be more likely to impact the Funds’ ability to access exposure to A-Shares.

DERIVATIVES. On October 28, 2020, the SEC adopted new regulations governing the use of derivatives by registered investment companies (“Rule 18f-4”). A Fund will be required to implement and comply with Rule 18f-4 by August 19, 2022. Once implemented, Rule 18f-4 will impose limits on the amount of derivatives a Fund can enter into, eliminate the asset segregation framework currently used by the Funds to comply with Section 18 of the 1940 Act, treat derivatives as senior securities and require Funds whose use of derivatives is more than a limited specified exposure amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager.
 
12


FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. To the extent consistent with its investment policies, each Fund (other than the Global X MSCI Colombia ETF) may invest up to 20% of its total assets (minus any percent of Fund assets invested in other derivatives) in U.S. or foreign futures contracts and may purchase and sell call and put options on futures contracts. These futures contracts and options will be used to simulate full investment in the respective Underlying Index, to facilitate trading or to reduce transaction costs. A Fund will only enter into futures contracts and options on futures contracts that are traded on a U.S. or foreign exchange. A Fund will not use futures or options for speculative purposes. In connection with a Fund's position in a futures contract or related option, the Fund will segregate liquid assets or will otherwise cover its position in accordance with applicable SEC requirements.

Futures Contracts. Each Fund (other than the Global X MSCI Colombia ETF) may enter into certain equity, index and currency futures transactions, as well as other futures transactions that become available in the markets. By using such futures contracts, the Funds may obtain exposure to certain equities, indexes and currencies without actually investing in such instruments. Index futures may be based on broad indices, such as the S&P 500 Index, or narrower indices. A futures contract on foreign currency creates a binding obligation on one party to deliver, and a corresponding obligation on another party to accept delivery of, a stated quantity of foreign currency for an amount fixed in U.S. dollars. Foreign currency futures may be used by a Fund to help the Fund track the price and yield performance of its Underlying Index.
 
Some futures contracts are traded on organized exchanges regulated by the SEC or Commodity Futures Trading Commission ("CFTC"), and transactions on them are cleared through a clearing corporation, which guarantees the performance of the parties to the contract. If regulated by the CFTC, such exchanges may be designated contract markets or swap execution facilities.

A Fund may also engage in transactions in foreign stock index futures, which may be traded on foreign exchanges. Participation in foreign futures and foreign options transactions involves the execution and clearing of trades on or subject to the rules of a foreign board of trade. Neither the National Futures Association ("NFA") nor any domestic exchange regulates activities of any such organization, even if it is formally linked to a domestic market. Moreover, foreign laws and regulations and transactions executed under such laws and regulations may not be afforded certain of the protective measures provided domestically. In addition, the price of foreign futures or foreign options contracts may be affected by any variance in the foreign exchange rate between the time an order is placed and the time it is liquidated, offset or exercised.

Unlike purchases or sales of portfolio securities, no price is paid or received by a Fund upon the purchase or sale of a futures contract. Initially, a Fund will be required to deposit with the broker or in a segregated account with a custodian or sub-custodian an amount of liquid assets, known as initial margin, based on the value of the contract. The nature of initial margin in futures transactions is different from that of margin in security transactions in that futures contract margin does not involve the borrowing of funds by the customer to finance the transactions. Rather, the initial margin is in the nature of a performance bond or good faith deposit on the contract, which is returned to the Fund upon termination of the futures contract, assuming all contractual obligations have been satisfied. Subsequent payments, called variation margin, to and from the broker, will be made on a daily basis as the price of the underlying instruments fluctuates, making the long and short positions in the futures contract more or less valuable, a process known as "marking-to-market." For example, when a Fund has purchased a futures contract and the price of the contract has risen in response to a rise in the underlying instruments, that position will have increased in value and the Fund will be entitled to receive from the broker a variation margin payment equal to that increase in value. Conversely, where a Fund has purchased a futures contract and the price of the future contract has declined in response to a decrease in the underlying instruments, the position would be less valuable, and the Fund would be required to make a variation margin payment to the broker. Prior to expiration of the futures contract, the Adviser may elect to close the position by taking an opposite position, subject to the availability of a secondary market, which will operate to terminate the Fund's position in the futures contract. A final determination of variation margin is then made, additional cash is required to be paid by or released to the Fund, and the Fund realizes a loss or gain.

There are several risks in connection with the use of futures by a Fund. One risk arises because of the imperfect correlation between movements in the price of the futures and movements in the price of the instruments which are the subject of the hedge. The price of the future may move more than or less than the price of the instruments being hedged. If the price of the futures moves less than the price of the instruments which are the subject of the hedge, the hedge will not be fully effective but, if the price of the instruments being hedged has moved in an unfavorable direction, the Fund would be in a better position than if it had not hedged at all. If the price of the instruments being hedged has moved in a favorable direction, this advantage will be partially offset by the loss on the futures. If the price of the futures moves more than the price of the hedged instruments, the Fund involved will experience either a loss or gain on the futures, which will not be completely offset by movements in the price of the instruments that are the subject of the hedge. To compensate for the imperfect correlation of movements in the price of instruments being hedged and movements in the price of futures contracts, a Fund may buy or sell futures contracts in a greater dollar amount than the dollar amount of instruments being hedged if the volatility over a particular time period of the prices of such instruments has been greater than the volatility over such time period of the futures, or if otherwise deemed to be
13


appropriate by the Adviser. Conversely, a Fund may buy or sell fewer futures contracts if the volatility over a particular time period of the prices of the instruments being hedged is less than the volatility over such time period of the futures contract being used, or if otherwise deemed to be appropriate by the Adviser.
 
In addition to the possibility that there may be an imperfect correlation, or no correlation at all, between movements in futures and the instruments being hedged, the price of futures may not correlate perfectly with movement in the cash market due to certain market distortions. Rather than meeting additional margin deposit requirements, investors may close futures contracts through off-setting transactions, which could distort the normal relationship between the cash and futures markets. Second, with respect to financial futures contracts, the liquidity of the futures market depends on participants entering into off-setting transactions rather than making or taking delivery. To the extent participants decide to make or take delivery, liquidity in the futures market could be reduced, thus producing distortions. Third, from the point of view of speculators, the deposit requirements in the futures market are less onerous than margin requirements in the securities market. Therefore, increased participation by speculators in the futures market may also cause temporary price distortions. Due to the possibility of price distortion in the futures market, and because of the imperfect correlation between the movements in the cash market and movements in the price of futures, a correct forecast of general market trends or interest rate movements by the Adviser may still not result in a successful hedging transaction over a short time frame.
 
In general, positions in futures may be closed out only on an exchange, board of trade or other trading facility that provides a secondary market for such futures. Although each Fund intends to purchase or sell futures only on trading facilities where there appear to be active secondary markets, there is no assurance that a liquid secondary market on any trading facility will exist for any particular contract or at any particular time. In such an event, it may not be possible to close a futures contract position, and in the event of adverse price movements, a Fund would continue to be required to make daily cash payments of variation margin. However, in the event futures contracts have been used to hedge portfolio securities, such securities may not be sold until the futures contract can be terminated. In such circumstances, an increase in the price of the securities, if any, may partially or completely offset losses on the futures contract. However, as described above, there is no guarantee that the price of the securities will in fact correlate with the price movements in the futures contract and thus provide an offset on a futures contract.
 
Further, it should be noted that the liquidity of a secondary market in a futures contract may be adversely affected by "daily price fluctuation limits" established by commodity exchanges, which limit the amount of fluctuation in a futures contract price during a single trading day. Once the daily limit has been reached in the contract, no trades may be entered into at a price beyond the limit, thus preventing the liquidation of open futures positions. The trading of futures contracts is also subject to the risk of trading halts, suspensions, exchange or clearing house equipment failures, government intervention, insolvency of a brokerage firm or clearing house or other disruptions of normal trading activity, which could at times make it difficult or impossible to liquidate existing positions or to recover excess variation margin payments.
 
Successful use of futures by a Fund is subject to the Adviser's ability to predict correctly movements in the direction of the market. In addition, in such situations, if a Fund has insufficient cash, it may have to sell securities to meet daily variation margin requirements. Such sales of securities may be, but will not necessarily be, at increased prices which reflect the rising market. A Fund may have to sell securities at a time when it may be disadvantageous to do so.
 
Options on Futures Contracts. A Fund (other than the Global X MSCI Colombia ETF) may purchase and write options on the futures contracts described above. A futures option gives the holder, in return for the premium paid, the right to receive and execute a long futures contract (if the option is a call) or a short futures contract (if the option is a put) at a specified price at any time during the period of the option. Like the buyer or seller of a futures contract, the holder, or writer, of an option has the right to terminate its position prior to the scheduled expiration of the option by selling, or purchasing an option of the same series, at which time the person entering into the closing transaction will realize a gain or loss. Each Fund will be required to deposit initial margin and variation margin with respect to put and call options on futures contracts written by it pursuant to brokers' requirements similar to those described above. Net option premiums received will be included as initial margin deposits.
 
Investments in futures options involve some of the same considerations that are involved in connection with investments in futures contracts (for example, the existence of a liquid secondary market). In addition, the purchase or sale of an option also entails the risk that changes in the value of the underlying futures contract will not correspond to changes in the value of the option purchased. Depending on the pricing of the option compared to either the futures contract upon which it is based, or upon the price of the securities being hedged, an option may or may not be less risky than ownership of the futures contract or such securities. In general, the market prices of options can be expected to be more volatile than the market prices on the underlying futures contract. Compared to the purchase or sale of futures contracts, however, the purchase of call or put options on futures contracts may frequently involve less potential risk to a Fund because the maximum amount at risk is the premium
14


paid for the options (plus transaction costs). The writing of an option on a futures contract involves risks similar to those risks relating to the purchase or sale of futures contracts.
 
CFTC REGULATION. The Trust, on behalf of each Fund, has claimed an exclusion from the definition of commodity pool operator ("CPO") under the Commodity Exchange Act ("CEA"), and the Adviser has claimed an exemption from registration as a commodity trading advisor ("CTA") under the CEA. Therefore, each Fund and the Adviser are not subject to registration as a CPO or CTA. Under this CPO exclusion, a Fund may only use a de minimis amount of commodity interests (such as futures contracts, options on futures contracts and swaps) other than for bona fide hedging purposes (as defined by the CFTC). A de minimis amount is defined as an amount such that the aggregate initial margin and premiums required to establish these positions (after taking into account unrealized profits and unrealized losses on any such positions and excluding the amount by which options are "in-the-money" at the time of purchase) may not exceed 5% of a Fund's net asset value or, alternatively, the aggregate net notional value of those positions, determined at the time the most recent position was established, may not exceed 100% of a Fund's net asset value (after taking into account unrealized profits and unrealized losses on any such positions). The Funds and the Adviser currently are engaged only in a de minimis amount of such transactions and, therefore, neither the Funds nor the Adviser are currently subject to the registration and most regulatory requirements applicable to CPOs and CTAs, respectively. There can be no certainty that the Funds or the Adviser will continue to qualify under the applicable exclusion or exemption, as each Fund's investments may change over time. If a Fund or the Adviser is subject to CFTC registration, it may incur additional costs or be subject to additional regulatory requirements.
 
GOVERNMENT INTERVENTION IN FINANCIAL MARKETS. The value of a Fund's holdings is generally subject to the risk of future local, national, or global economic disturbances based on unknown weaknesses in the markets in which the Fund invests. In the event of such a disturbance, issuers of securities held by the Fund may experience significant declines in the value of their assets and even cease operations or may receive government assistance accompanied by increased restrictions on their business operations or other government intervention. Governments or their agencies may acquire distressed assets from financial institutions and acquire ownership interests in those institutions. The implications of government ownership and disposition of these assets are unclear, and such a program may have positive or negative effects on the liquidity, valuation and performance of a Fund's portfolio holdings.

Past instability during the 2008-2009 financial downturn led the U.S. Government, other governments and financial and prudential regulators to take a number of unprecedented actions designed to support certain financial institutions and segments of the financial markets that experienced extreme volatility, and in some cases a lack of liquidity. It is not certain that the U.S. Government will intervene in response to a future market disturbance and the effect of any such future intervention cannot be predicted. It is difficult for issuers to prepare for the impact of future financial downturns, although companies can seek to identify and manage future uncertainties through risk management programs.
 
ILLIQUID OR RESTRICTED SECURITIES. To the extent consistent with its investment policies, each Fund may invest up to 15% of its net assets in securities that are illiquid (calculated at the time of investment). The Funds will comply with Rule 22e-4 under the 1940 Act in managing illiquid investments. A Fund may purchase commercial paper issued pursuant to Section 4(2) of the Securities Act, as well as securities that are not registered under the Securities Act but can be sold to “qualified institutional buyers” in accordance with Rule 144A under the Securities Act. These securities will not be considered illiquid so long as the Adviser determines, under guidelines approved by the Trust’s Board of Trustees, that an adequate trading market exists. This practice could increase the level of illiquidity during any period that qualified institutional buyers become uninterested in purchasing these securities.
 
INVESTMENT COMPANIES. Subject to applicable statutory and regulatory limitations described below, each Fund may invest in shares of other investment companies, including open-end and closed-end investment companies, business development companies and other exchange-traded funds. An investment in an investment company is subject to the risks associated with that investment company’s portfolio securities. Because the value of other investment company or ETF shares depends on the NAV or the demand in the market, respectively, the Adviser may not be able to liquidate a Fund’s holdings in those shares at the most optimal time, adversely affecting the Fund’s performance. Investments in closed-end funds may entail the additional risk that the market value of such investments may be substantially less than their net asset value. To the extent a Fund invests in shares of another investment company, the Fund will indirectly bear a proportionate share of that investment company’s advisory fees and other operating expenses. These fees are in addition to the management fees and other operational expenses incurred directly by the Funds. In addition, the Funds could incur a sales charge in connection with purchasing an investment company security or a redemption fee upon the redemption of such security.

Section 12(d)(1)(A) of the 1940 Act provides that a fund may not purchase or otherwise acquire the securities of other investment companies if, as a result of such purchase or acquisition, it would own: (i) more than 3% of the total outstanding voting stock of the acquired investment company; (ii) securities issued by any one investment company having a value in
15


excess of 5% of the fund’s total assets; or (iii) securities issued by all investment companies having an aggregate value in excess of 10% of the fund’s total assets. These limitations are subject to certain statutory and regulatory exemptions including recently adopted Rule 12d1-4. Rule 12d1-4, which became effective on January 19, 2021, permits a Fund to invest in other investment companies beyond the statutory limits, subject to certain conditions. Among other conditions, Rule 12d1-4 prohibits a fund from acquiring control of another investment company (other than an investment company in the same group of investment companies), including by acquiring more than 25% of its voting securities. In addition, Rule 12d1-4 imposes certain voting requirements when a fund’s ownership of another investment company exceeds particular thresholds. If shares of a fund are acquired by another investment company, the “acquired” fund may not purchase or otherwise acquire the securities of an investment company or private fund if immediately after such purchase or acquisition, the securities of investment companies and private funds owned by that acquired fund have an aggregate value in excess of 10 percent of the value of the total assets of the fund, subject to certain exceptions. These restrictions may limit the Funds’ ability to invest in other investment companies to the extent desired. In addition, other unaffiliated investment companies may impose other investment limitations or redemption restrictions which may also limit the Funds’ flexibility with respect to making investments in those unaffiliated investment companies.

The Global X MSCI Pakistan ETF’s investment in investment companies and other pooled investment vehicles will not exceed 10% of the Global X MSCI Pakistan ETF’s assets.

POOLED INVESTMENT VEHICLES. The Funds may invest in the securities of pooled vehicles that are not investment companies and, thus, not required to comply with the provisions of the 1940 Act. As a shareholder of such pooled vehicles, the Funds will not have all of the investor protections afforded by the 1940 Act. Such pooled vehicles may, however, be required to comply with the provisions of other federal securities laws, such as the Securities Act. These pooled vehicles typically hold currency or commodities, such as gold or oil, or other property that is itself not a security. If a Fund invests in, and thus, is a shareholder of, a pooled vehicle, the Fund's shareholders will indirectly bear the Fund's proportionate share of the fees and expenses paid by the pooled vehicle, including any applicable management fees, in addition to both the management fees payable directly by the Fund to the Adviser and the other expenses that the Fund bears directly in connection with its own operations.  In addition, a Fund's investment in pooled investment vehicles may be considered illiquid and subject to the Fund's restrictions on illiquid investments.

STRUCTURED PRODUCTS. The Funds may invest in structured products, including exchange traded notes ("ETNs") and equity-linked instruments. These types of structured products are senior, unsecured unsubordinated debt securities issued by an underwriting bank that are designed to provide returns that are linked to a particular benchmark less investor fees. Structured products have a maturity date and, generally, are backed only by the creditworthiness of the issuer. As a result, the value of a structured product may be influenced by time to maturity, volatility and lack of liquidity in the underlying market (e.g., the commodities market), changes in the applicable interest rates, and changes in the issuer's credit rating and economic, legal, political or geographic events that affect the referenced market. Structured products also may be subject to credit risk. The value of an ETN may also be subject to the level of supply and demand for the ETN.

LEVERAGE. Under the 1940 Act, a Fund is permitted to borrow from a bank up to 33 1/3% of its total net assets for short-term or emergency purposes. Each Fund may borrow money at fiscal quarter end to maintain the required level of diversification to qualify as a RIC for purposes of the Code. As a result, a Fund may be exposed to the risks of leverage, which may be considered a speculative investment technique. Leverage magnifies the potential for gain and loss on amounts invested and therefore increases the risks associated with investing in the Funds. If the value of a Fund's assets increases, then leveraging would cause the Fund's NAV to increase more sharply than it would have had the Fund not been leveraged. Conversely, if the value of a Fund's assets decreases, leveraging would cause the Fund's NAV to decline more sharply than it otherwise would have had the Fund not been leveraged. The Funds may incur additional expenses in connection with borrowings.
 
MLP RISK. Investments in securities of MLPs involve risks that differ from an investment in common stock. Holders of units of MLPs have more limited control rights and limited rights to vote on matters affecting the MLP as compared to holders of stock of a corporation. For example, MLP unit holders may not elect the general partner or the directors of the general partner and the MLP unit holders have limited ability to remove an MLP's general partner. An MLP is controlled by its general partner, which generally has conflicts of interest and limited fiduciary duties to the MLP, which may permit the general partner to favor its own interests over the MLP's. A Fund investing in MLPs will derive the cash flow associated from that investment from investments in equity securities of MLPs. The amount of cash that each Fund investing in MLPs will have available to pay or distribute to shareholders depends entirely on the ability of the MLPs that each such Fund owns to make distributions to their partners and the tax character of those distributions. Neither the Funds investing in MLPs nor the Adviser has control over the actions of underlying MLPs. The amount of cash that each individual MLP can distribute to its partners will depend on the amount of cash it generates from operations, which will vary from quarter to quarter depending on factors affecting the energy infrastructure market generally and on factors affecting the particular business lines of the MLP. Available cash will also
16


depend on the MLPs' level of operating costs (including incentive distributions to the general partner), level of capital expenditures, debt service requirements, acquisition costs (if any), fluctuations in working capital needs, and other factors. The benefit derived from an investment in an MLP is also dependent on the MLP being treated as a partnership for federal income tax purposes, which generally do not pay U.S. federal income tax at the partnership level, subject to the application of the partnership audit rules. A change in current tax law, or a change in the underlying business mix of a given MLP, could result in an MLP that previously elected to be taxed as a partnership being treated as a corporation for U.S. federal income tax purposes, which would result in such MLP being required to pay U.S. federal income tax on its taxable income. The classification of an MLP as a corporation for U.S. federal income tax purposes would have the effect of reducing the amount of cash available for distribution by the MLP. Thus, to the extent that any of the MLPs to which the Fund has exposure are treated as a corporation for U.S. federal income tax purposes, it could result in a reduction in the value of the Fund’s investment and lower the Fund’s income. The Fund may also invest in MLPs that elect to be taxed as corporations, which taxes would have the effect of reducing the amount of cash available for distribution by the MLP.

Certain MLPs depend upon their parent or sponsor entities for a majority of their revenues. If their parent or sponsor entities fail to make such payments or satisfy their obligations, the revenues and cash flows of such MLPs and ability of such MLPs to make distributions to unit holders, such as a Fund, would be adversely affected.
 
MLPs are subject to various federal, state and local environmental laws and health and safety laws as well as laws and regulations specific to their particular activities. These laws and regulations address: health and safety standards for the operation of facilities, transportation systems and the handling of materials; air and water pollution requirements and standards; solid waste disposal requirements; land reclamation requirements; and requirements relating to the handling and disposition of hazardous materials. MLPs are subject to the costs of compliance with such laws applicable to them, and changes in such laws and regulations may adversely affect their results of operations.

MLPs are subject to numerous business related risks, including: deterioration of business fundamentals reducing profitability due to development of alternative energy sources, among other things, consumer sentiment, changing demographics in the markets served, unexpectedly prolonged and precipitous changes in commodity prices and increased competition that reduces the MLP's market share; the lack of growth of markets requiring growth through acquisitions; disruptions in transportation systems; the dependence of certain MLPs upon unrelated third parties; availability of capital for expansion and construction of needed facilities; a significant decrease in production due to depressed commodity prices or otherwise; the inability of MLPs to successfully integrate recent or future acquisitions; and the general level of the economy.

NEW FUND RISKS. Certain of the Funds are new funds, with no operating history, which may result in additional risks for investors in the Funds. There can be no assurance that these Funds will grow to or maintain an economically viable size, in which case the Board of Trustees may determine to liquidate the Funds. While shareholder interests will be the paramount consideration, the timing of any liquidation may not be favorable to certain individual shareholders.
 
OPTIONS. To the extent consistent with its investment policies, the Global X S&P 500® Covered Call ETF, Global X NASDAQ 100® Covered Call ETF, Global X Russell 2000 Covered Call ETF, Global X S&P 500® Covered Call & Growth ETF, Global X NASDAQ 100® Covered Call & Growth ETF, Global X S&P 500® Tail Risk ETF, Global X S&P 500® Risk Managed Income ETF, Global X S&P 500® Collar 95-110 ETF, Global X NASDAQ 100® Tail Risk ETF, Global X NASDAQ 100® Risk Managed Income ETF and Global X NASDAQ 100® Collar 95-110 ETF may invest in put options and buy call options and write covered call and secured put options that the Adviser believes will help the Fund to track its Underlying Index. To the extent consistent with its investment policies, each other Fund (other than the Global X MSCI Colombia ETF) may invest up to 20% of its net assets (minus any percent of Fund assets invested in other derivatives) in put options and call options and may write covered call and secured put options that the Adviser believes will help the Fund to track its Underlying Index. Such options may relate to particular securities, foreign and domestic stock indices, financial instruments, foreign currencies or the yield differential between two securities ("yield curve options") and may or may not be listed on a domestic or foreign securities exchange or issued by the Options Clearing Corporation. A call option for a particular security or currency gives the purchaser of the option the right to buy, and a writer the obligation to sell, the underlying security at the stated exercise price prior to the expiration of the option, regardless of the market price of the security or currency. The premium paid to the writer is in consideration for undertaking the obligation under the option contract. A put option for a particular security or currency gives the purchaser the right to sell the security or currency at the stated exercise price prior to the expiration date of the option, regardless of the market price of the security or currency. In contrast to an option on a particular security, an option on an index provides the holder with the right to make or receive a cash settlement upon exercise of the option. The amount of this settlement will be equal to the difference between the closing price of the index at the time of exercise and the exercise price of the option expressed in dollars, times a specified multiple.

17


Options trading is a highly specialized activity, which entails risk greater than ordinary investment risk. Options on particular securities may be more volatile than the underlying instruments and, therefore, on a percentage basis, an investment in options may be subject to greater fluctuation than an investment in the underlying instruments themselves.

The Funds will write call options only if they are "covered." In the case of a call option on a security or currency, the option is "covered" if the Fund owns the security or currency underlying the call or has an absolute and immediate right to acquire that security without additional cash consideration (or, if additional cash consideration is required, liquid assets in such amount are segregated) upon conversion or exchange of other securities held by it. For a call option on an index, the option is covered if the Fund maintains with its custodian a portfolio of securities substantially replicating the index, or liquid assets equal to the contract value. A call option also is covered if the Fund holds a call on the same security, currency or index as the call written where the exercise price of the call held is (i) equal to or less than the exercise price of the call written, or (ii) greater than the exercise price of the call written, provided the Fund segregates liquid assets in the amount of the difference.
 
All put options written by a Fund would be covered, which means that such Fund will segregate cash or liquid assets with a value at least equal to the exercise price of the put option or will use the other methods described in the next sentence. A put option also is covered if the Fund holds a put option on the same security or currency as the option written where the exercise price of the option held is (i) equal to or higher than the exercise price of the option written, or (ii) less than the exercise price of the option written, provided the Fund segregates liquid assets in the amount of the difference.
 
With respect to yield curve options, a call (or put) option is covered if a Fund holds another call (or put) option on the spread between the same two securities and segregates liquid assets sufficient to cover the Fund's net liability under the two options. Therefore, the Fund's liability for such a covered option generally is limited to the difference between the amount of the Fund's liability under the option written by the Fund less the value of the option held by the Fund. Yield curve options also may be covered in such other manner as may be in accordance with the requirements of the counterparty with which the option is traded and applicable laws and regulations.
 
A Fund's obligation to sell subject to a covered call option written by it, or to purchase a security or currency subject to a secured put option written by it, may be terminated prior to the expiration date of the option by the Fund's execution of a closing purchase transaction, which is effected by purchasing on an exchange an option of the same series (i.e., same underlying security or currency, exercise price and expiration date) as the option previously written. Such a purchase does not result in the ownership of an option. A closing purchase transaction will ordinarily be effected to realize a profit on an outstanding option, to prevent an underlying instrument from being called, to permit the sale of the underlying security or currency or to permit the writing of a new option containing different terms on such underlying security. The cost of such a liquidation purchase plus transaction costs may be greater than the premium received upon the original option, in which event the Fund will have incurred a loss in the transaction. There is no assurance that a liquid secondary market will exist for any particular option. An option writer, unable to effect a closing purchase transaction, will not be able to sell the underlying security or currency (in the case of a covered call option) or liquidate the segregated assets (in the case of a secured put option) until the option expires or the optioned security or currency is delivered upon exercise with the result that the writer in such circumstances will be subject to the risk of market decline or appreciation in the instrument during such period.

When a Fund purchases an option, the premium paid by it is recorded as an asset of the Fund. When a Fund writes an option, an amount equal to the net premium (the premium less the commission) received by the Fund is included in the liability section of the Fund's statement of assets and liabilities as a deferred credit. The amount of this asset or deferred credit will be subsequently marked-to-market to reflect the current value of the option purchased or written. The current value of the traded option is the last sale price or, in the absence of a sale, the current bid price. If an option purchased by a Fund expires unexercised, the Fund realizes a loss equal to the premium paid. If a Fund enters into a closing sale transaction on an option purchased by it, the Fund will realize a gain if the premium received by the Fund on the closing transaction is more than the premium paid to purchase the option, or a loss if it is less. If an option written by a Fund expires on the stipulated expiration date or if a Fund enters into a closing purchase transaction, it will realize a gain (or loss if the cost of a closing purchase transaction exceeds the net premium received when the option is sold) and the deferred credit related to such option will be eliminated. If an option written by a Fund is exercised, the proceeds of the sale will be increased by the net premium originally received and the Fund will realize a gain or loss.
 
There are several risks associated with transactions in certain options. For example, there are significant differences between the securities, currency and options markets that could result in an imperfect correlation between these markets, causing a given transaction not to achieve its objectives. In addition, a liquid secondary market for particular options, whether traded over-the-counter or on an exchange, may be absent for reasons which include the following: there may be insufficient trading interest in certain options; restrictions may be imposed by an exchange on opening transactions or closing transactions or both; trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of options or underlying
18


securities or currencies; unusual or unforeseen circumstances may interrupt normal operations on an exchange; the facilities of an exchange or the Options Clearing Corporation may not at all times be adequate to handle current trading volume; or one or more exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of options (or a particular class or series of options), in which event the secondary market on that exchange (or in that class or series of options) would cease to exist, although outstanding options that had been issued by the Options Clearing Corporation as a result of trades on that exchange would continue to be exercisable in accordance with their terms.
 
REPURCHASE AGREEMENTS. To the extent consistent with its investment policies, each Fund may agree to purchase portfolio securities from financial institutions subject to the seller's agreement to repurchase them at a mutually agreed upon date and price ("repurchase agreements"). Each Fund may invest in repurchase agreements, provided that a Fund may not invest more than 15% of its net assets in illiquid securities or other illiquid assets (calculated at the time of investment), including repurchase agreements maturing in more than seven days. Repurchase agreements are considered to be loans under the 1940 Act. Although the securities subject to a repurchase agreement may bear maturities exceeding one year, settlement for the repurchase agreement will never be more than one year after the Fund's acquisition of the securities and normally will be within a shorter period of time. Securities subject to repurchase agreements normally are held either by the Trust's custodian or sub-custodian, or in the Federal Reserve/Treasury Book-Entry System. The seller under a repurchase agreement will be required to maintain the value of the securities subject to the agreement in an amount exceeding the repurchase price (including accrued interest). Default by the seller would, however, expose a Fund to possible loss because of adverse market action or delay in connection with the disposition of the underlying obligations. In the event of a bankruptcy or other default of a seller of a repurchase agreement, a Fund could experience both delays in liquidating the underlying security and losses, including: (a) possible decline in the value of the underlying security during the period while the Fund seeks to enforce its rights thereto; (b) possible subnormal levels of income and lack of access to income during this period; and (c) expenses of enforcing its rights.
 
REVERSE REPURCHASE AGREEMENTS. To the extent consistent with its investment policies, each Fund may borrow funds by selling portfolio securities to financial institutions such as banks and broker/dealers and agreeing to repurchase them at a mutually specified date and price ("reverse repurchase agreements"). The Funds may use the proceeds of reverse repurchase agreements to purchase other securities either maturing, or under an agreement to resell, on a date simultaneous with or prior to the expiration of the reverse repurchase agreement. Reverse repurchase agreements are considered to be borrowings under the 1940 Act. Reverse repurchase agreements involve the risk that the market value of the securities sold by a Fund may decline below the repurchase price. The Funds will pay interest on amounts obtained pursuant to a reverse repurchase agreement. While reverse repurchase agreements are outstanding, the applicable Fund will segregate liquid assets in an amount at least equal to the market value of the securities, plus accrued interest, subject to the agreement.
 
SECURITIES LENDING. Collateral for loans of portfolio securities made by a Fund may consist of cash, cash equivalents, securities issued or guaranteed by the U.S. government or its agencies or irrevocable bank letters of credit (or any combination thereof). The borrower of securities will be required to maintain the market value of the collateral at not less than the market value of the loaned securities, and such value will be monitored on a daily basis. When a Fund lends its securities, it continues to receive payments equal to the dividends and interest paid on the securities loaned and simultaneously may earn interest on the investment of the cash collateral. Investing the collateral subjects it to market depreciation or appreciation, and each Fund is responsible for any loss that may result from its investment in borrowed collateral. A Fund will have the right to terminate a loan at any time and recall the loaned securities within the normal and customary settlement time for securities transactions. Although voting rights, or rights to consent, attendant to securities on loan pass to the borrower, such loans may be called so that the securities may be voted by a Fund if a material event affecting the investment is to occur. As with other extensions of credit there are risks of delay in recovering, or even loss of rights in, the collateral should the borrower of the securities fail financially.
 
TRACKING VARIANCE. As discussed in the Prospectus, the Funds are subject to the risk of tracking variance (also referred to as tracking error risk). Tracking variance may result from share purchases and redemptions, transaction costs, expenses and other factors. Share purchases and redemptions may necessitate the purchase and sale of securities by a Fund and the resulting transaction costs, which may be substantial because of the number and the characteristics of the securities held. In addition, transaction costs are incurred because sales of securities received in connection with spin-offs and other corporate reorganizations are made to conform each Fund's holdings to its investment objective. Tracking variance also may occur due to factors such as the size of a Fund, the maintenance of a cash reserve pending investment or to meet expected redemptions, changes made in the Fund's designated index or the manner in which the index is calculated or because the indexing and investment approach of the Adviser does not produce the intended goal of the Fund. Tracking variance is monitored by the Adviser at least quarterly. In the event the performance of a Fund is not comparable to the performance of its designated index, the Board of Trustees will evaluate the reasons for the deviation and the availability of corrective measures.
 
19


WARRANTS. To the extent consistent with its investment policies, a Fund may purchase warrants and similar rights, which are privileges issued by corporations enabling the owners to subscribe to and purchase a specified number of shares of the corporation at a specified price during a specified period of time. The prices of warrants do not necessarily correlate with the prices of the underlying shares. The purchase of warrants involves the risk that the applicable Fund could lose the purchase value of a warrant if the right to subscribe to additional shares is not exercised prior to the warrant's expiration. Also, the purchase of warrants involves the risk that the effective price paid for the warrant added to the subscription price of the related security may exceed the value of the subscribed security's market price such as when there is no movement in the level of the underlying security.

CORPORATE DEBT SECURITIES. A Fund may invest in investment grade corporate debt securities of any rating or maturity. Investment grade corporate bonds are those rated BBB or better by S&P® or Baa or better by Moody's. Securities rated BBB by S&P® are considered investment grade, but Moody's considers securities rated Baa to have speculative characteristics. See Appendix A for a description of corporate bond ratings. A Fund may also invest in unrated securities.

Corporate debt securities are fixed-income securities issued by businesses to finance their operations, although corporate debt instruments may also include bank loans to companies. Notes, bonds, debentures and commercial paper are the most common types of corporate debt securities, with the primary difference being their maturities and secured or un-secured status. Commercial paper has the shortest term and is usually unsecured.

The broad category of corporate debt securities includes debt issued by domestic or foreign companies of all kinds, including those with small-, mid- and large-capitalizations. Corporate debt may be rated investment-grade or below investment-grade and may carry variable or floating rates of interest.

Because of the wide range of types, and maturities, of corporate debt securities, as well as the range of creditworthiness of its issuers, corporate debt securities have widely varying potentials for return and risk profiles. For example, commercial paper issued by a large established domestic corporation that is rated investment-grade may have a modest return on principal but carries relatively limited risk. On the other hand, a long-term corporate note issued by a small foreign corporation from an emerging market country that has not been rated may have the potential for relatively large returns on principal but carries a relatively high degree of risk.

Corporate debt securities carry both credit risk and interest rate risk. Credit risk is the risk that a Fund could lose money if the issuer of a corporate debt security is unable to pay interest or repay principal when it is due. Some corporate debt securities that are rated below investment-grade are generally considered speculative because they present a greater risk of loss, including default, than higher quality debt securities. The credit risk of a particular issuer's debt security may vary based on its priority for repayment. For example, higher ranking (senior) debt securities have a higher priority than lower ranking (subordinated) securities. This means that the issuer might not make payments on subordinated securities while continuing to make payments on senior securities. In addition, in the event of bankruptcy, holders of higher-ranking senior securities may receive amounts otherwise payable to the holders of more junior securities. Interest rate risk is the risk that the value of certain corporate debt securities will tend to fall when interest rates rise. In general, corporate debt securities with longer terms tend to fall more in value when interest rates rise than corporate debt securities with shorter terms.

JUNK BONDS. A Fund may invest in lower-rated debt securities, including securities in the lowest credit rating category, of any maturity, otherwise known as "junk bonds."

Junk bonds generally offer a higher current yield than that available for higher-grade issues. However, lower-rated securities involve higher risks, in that they are especially subject to adverse changes in general economic conditions and in the industries in which the issuers are engaged, to changes in the financial condition of the issuers and to price fluctuations in response to changes in interest rates. During periods of economic downturn or rising interest rates, highly leveraged issuers may experience financial stress that could adversely affect their ability to make payments of interest and principal and increase the possibility of default. In the past, the prices of many lower-rated debt securities declined substantially, reflecting an expectation that many issuers of such securities might experience financial difficulties. As a result, the yields on lower-rated debt securities rose dramatically, but such higher yields did not reflect the value of the income stream that holders of such securities expected, but rather, the risk that holders of such securities could lose a substantial portion of their value as a result of the issuers' financial restructuring or default. There can be no assurance that such declines will not recur.

The market for lower-rated debt issues generally is thinner and less active than that for higher quality securities, which may limit the Fund's ability to sell such securities at fair value in response to changes in the economy or financial markets. Adverse publicity and investor perceptions, whether based on fundamental analysis, may also decrease the values and liquidity of lower-rated securities, especially in a thinly traded market. Changes by recognized rating services in their rating of a fixed-income
20


security may affect the value of these investments. The Fund will not necessarily dispose of a security when its rating is reduced below its rating at the time of purchase. However, the Adviser will monitor the investment to determine whether continued investment in the security will assist in meeting the Fund's investment objective.

U.S. GOVERNMENT SECURITIES. A Fund may invest in securities issued or guaranteed by the U.S. government or its agencies or instrumentalities in pursuit of its investment objective, in order to deposit such securities as initial or variation margin, as "cover" for the investment techniques it employs, as part of a cash reserve or for liquidity purposes. U.S. government securities, such as Treasury bills, notes and bonds and mortgage-backed securities guaranteed by the Government National Mortgage Association ("Ginnie Mae"), are supported by the full faith and credit of the United States; others are supported by the right of the issuer to borrow from the U.S. Treasury; others are supported by the discretionary authority of the U.S. government to purchase an agency's obligations; and still others are supported only by the credit of the issuing agency, instrumentality, or enterprise.

Although U.S. government-sponsored enterprises, such as the Federal Home Loan Mortgage Corporation ("Freddie Mac®") and the Federal National Mortgage Association ("Fannie Mae®") may be chartered or sponsored by Congress, they are not funded by Congressional appropriations, and their securities are not issued by the U.S. Treasury nor supported by the full faith and credit of the U.S. government. The maximum potential liability of the issuers of some U.S. government securities held by a Fund may greatly exceed their current resources, including any legal right to support from the U.S. Treasury. It is possible that issuers of U.S. government securities will not have the funds to meet their payment obligations in the future. There is no assurance that the U.S. government would provide financial support to its agencies and instrumentalities in the future if not required to do so, even though the U.S. government has provided financial support to certain U.S. government-sponsored enterprises in the past during periods of extremity. Fannie Mae and Freddie Mac have been operating under conservatorship, with the Federal Housing Finance Administration ("FHFA") acting as their conservator, since September 2008. The entities are dependent upon the continued support of the U.S. Treasury and FHFA in order to continue their business operations. These factors, among others, could affect the future status and role of Fannie Mae and Freddie Mac and the value of their securities and the securities which they guarantee. Additionally, the U.S. government and its agencies and instrumentalities do not guarantee the market values of their securities, which may fluctuate.

U.S. government agencies and instrumentalities that issue or guarantee securities include the FHFA, Fannie Mae, the Farmers Home Administration, the Export-Import Bank of the United States, the Small Business Administration, Ginnie Mae, the General Services Administration, the Central Bank for Cooperatives, the Federal Home Loan Banks, Freddie Mac, the Farm Credit Banks, the Maritime Administration, the Tennessee Valley Authority, the Resolution Funding Corporation and the Student Loan Marketing Association ("Sallie Mae®").

RECENT MARKET CONDITIONS. Although each Fund seeks to track its Underlying Index, the performance of the Underlying Indices and the Funds are subject to general market conditions.

Following years of fiscal and monetary support, the U.S. market and economy are adjusting to reduced levels of support. Supply chain bottlenecks and pent-up demand as a consequence of the COVID-19 pandemic have led to elevated inflation pressures in the United States. While the U.S. consumer market generally remains strong, purchasing power could be eroded if wage inflation does not keep pace with price inflation. In time, this may reduce inflation-adjusted demand. COVID-19 remains a risk factor with the potential that new variants could lead to increased government restrictions and consumer caution. Additionally, COVID-19 remains a challenge for global supply chain normalization, with China’s zero-COVID policies snarling global logistics.

Permanent vs. transitory inflation remains a key question influencing market conditions in 2022. While some pricing pressure remains transitory, the supply chain disruptions have persisted for two years, contributing to more permanent dislocations in price expectations. In November 2021, the Federal Reserve (Fed) dropped the term “transitory” from its reference to inflation and started reflecting a more hawkish perspective. This brought forward expectations for reduced liquidity and higher interest rates, contributing to market volatility during January 2022. Potential shifts in Fed policy and views in 2022 may raise interest rates, which could drive market sentiment. There is no certainty that actions taken by the Fed will improve market conditions.

Inflation pressures have been fueled by elevated energy prices. One of the main near-term sources of elevated energy prices is the geopolitical tensions between Russia and Ukraine These tensions could either escalate into military conflict or could dissipate based on various factors facing Russia and Ukraine. Due to Europe’s reliance on Russian oil and gas, Russia’s bargaining position may decline as the demand for oil and gas declines. This could lead to near term energy price volatility and may contribute to inflation pressures.

21


China remains a risk factor to both global supply and demand. The 2021 Chinese property market correction appears broader and deeper than China’s prior housing cycles. Weak market sentiment in China, combined with a high volume of property developer bonds maturing in offshore USD denominated markets in the first half of 2022, increase the risk of a lack of liquidity in the Chinese property market. The Chinese property market slowdown and resulting potential weakness in China’s economic growth could have broader repercussions. China currently accounts for around half the annual copper and steel used globally while being expected to comprise more than 20% of global GDP growth between 2021 and 2026. Additionally, the Chinese market remains important to both U.S. and globally listed companies as a growing consumer market and an important part of supply chains. Chinese policy action may help mitigate this risk from the property sector and restore confidence and stability.

It is impossible to predict the effects of these or similar events in the future on the Funds, although it is possible that these or similar events could have a significant adverse impact on the NAV and/or risk profile of a Fund.

PORTFOLIO TURNOVER
 
For the fiscal year ended October 31, 2021, the portfolio turnover rate for each of the following Funds varied from such Fund's portfolio turnover rate for the fiscal years ended October 31, 2020 and October 31, 2019 due to the application of each Fund's respective index methodology:
2019 2020 2021
Global X MSCI Colombia ETF 18.05% 20.85% 16.08%
Global X MSCI China Consumer Discretionary ETF 83.41% 32.56% 34.56%
Global X MSCI China Industrials ETF 80.17% 19.54% 66.09%
Global X MSCI China Communication Services ETF 114.67% 27.78% 65.54%
Global X MSCI China Financials ETF 54.17% 21.72% 21.42%
Global X MSCI China Energy ETF 109.41% 34.18% 51.48%
Global X MSCI China Materials ETF 65.67% 36.02% 26.64%
Global X MSCI Norway ETF* 9.63% 8.38% 9.74%
Global X FTSE Southeast Asia ETF 7.01% 5.98% 13.46%
Global X MSCI Argentina ETF 28.88% 49.17% 31.35%
Global X MSCI Greece ETF 12.67% 28.48% 38.42%
Global X MSCI Nigeria ETF 45.62% 18.79% 5.79%
Global X MSCI Next Emerging & Frontier ETF 78.67% 31.66% 28.62%
Global X MSCI Portugal ETF 20.74% 25.19% 53.05%
Global X DAX Germany ETF* 15.36% 10.93% 24.22%
Global X MSCI Pakistan ETF 19.09% 52.38% 41.83%
Global X MSCI China Consumer Staples ETF 29.25% 44.54% 35.56%
Global X MSCI China Health Care ETF 12.20% 31.60% 29.41%
Global X MSCI China Information Technology ETF 36.75% 29.01% 52.48%
Global X MSCI China Real Estate ETF 14.00% 25.75% 38.66%
Global X MSCI China Utilities ETF 28.26% 37.12% 44.06%
Global X MSCI Vietnam ETF N/A N/A N/A
Global X Copper Miners ETF 18.77% 16.85% 20.13%
Global X Silver Miners ETF 42.16% 19.95% 15.61%
Global X Gold Explorers ETF 16.35% 18.81% 18.30%
Global X Uranium ETF 23.93% 59.21% 30.01%
Global X Lithium & Battery Tech ETF 35.28% 65.14% 39.09%
Global X SuperDividend® ETF
56.85% 124.55% 82.37%
Global X Social Media ETF 16.92% 19.23% 30.89%
Global X Guru® Index ETF
126.44% 124.90% 121.91%
Global X SuperIncome™ Preferred ETF 55.98% 67.65% 98.47%
Global X SuperDividend® U.S. ETF
60.00% 93.44% 60.53%
Global X S&P 500® Covered Call ETF*
3.92% 7.29% 4.84%
22


2019 2020 2021
Global X NASDAQ 100® Covered Call ETF*
11.82% 27.87% 19.99%
Global X MSCI SuperDividend® Emerging Markets ETF
66.65% 93.04% 102.27%
Global X SuperDividend® REIT ETF 34.16% 106.23% 59.44%
Global X Renewable Energy Producers ETF 87.06% 29.27% 55.97%
Global X S&P 500® Catholic Values ETF
8.54% 5.55% 8.29%
Global X MSCI SuperDividend® EAFE ETF
29.81% 59.28% 88.53%
Global X E-commerce ETF 23.50% 42.01% 14.64%
Global X Russell 2000 Covered Call ETF 5.82% 11.16% 8.94%
Global X S&P Catholic Values Developed ex-U.S. ETF N/A 4.04% 17.17%
Global X Nasdaq 100® Covered Call & Growth ETF
N/A 1.65% 11.21%
Global X S&P 500® Covered Call & Growth ETF
N/A 0.75% 12.17%
Global X Emerging Markets Internet & E-commerce ETF N/A N/A 23.61%
Global X S&P 500® Tail Risk ETF
N/A N/A 6.21%
Global X S&P 500® Risk Managed Income ETF
N/A N/A 7.08%
Global X S&P 500® Collar 95-110 ETF
N/A N/A 6.44%
Global X NASDAQ 100® Tail Risk ETF
N/A N/A 1.71%
Global X NASDAQ 100® Risk Managed Income ETF
N/A N/A 2.16%
Global X NASDAQ 100® Collar 95-110 ETF
N/A N/A 2.11%
Global X Disruptive Materials ETF N/A N/A N/A
*    Reflects the portfolio turnover of the predecessor fund.

For the fiscal year ended October 31, 2019, the Global X MSCI China Consumer Discretionary ETF, Global X MSCI China Energy ETF, Global X MSCI China Financials ETF, Global X MSCI China Industrials ETF, Global X MSCI China Materials ETF, Global X MSCI China Communication Services ETF, Global X MSCI Next Emerging & Frontier ETF and Global X Renewable Energy Producers ETF each experienced above-average turnover as a result of a planned migration to a new Underlying Index for such Fund. For the fiscal year ended October 31, 2020, the Global X SuperDividend® ETF and the Global X SuperDividend® REIT ETF experienced above-average turnover as a result of rebalancing of each Fund's respective underlying index pursuant to such underlying index's methodology in response to market conditions.

INFORMATION REGARDING THE INDICES AND THE INDEX PROVIDERS
  
MSCI All Colombia Select 25/50 Index
 
The MSCI All Colombia Select 25/50 Index applies additional liquidity screens on the MSCI All Colombia Index, which is designed to represent the performance of the broad Colombia equity universe. The broad Colombia equity universe includes securities that are classified in Colombia according to the MSCI Global Investable Market Index Methodology, together with companies that are headquartered or listed in Colombia and carry out the majority of their operations in Colombia. A specific capping methodology is applied to facilitate compliance with the rules governing the listing of financial products on exchanges in the United States. The index targets a minimum of 25 securities and 20 issuers at construction. The index is designed to take into account the 25% and 50% concentration constraints required for a fund to qualify as a RIC under the Code in the United States. At each quarterly rebalance, no single index constituent may exceed 25% of the index weight, and the sum of all constituents with index weights greater than 5% may not exceed 50%. The index is maintained by MSCI.

MSCI China Consumer Discretionary 10/50 Index

The MSCI China Consumer Discretionary 10/50 Index tracks the performance of companies in the MSCI China Index (the "Parent Index") that are classified as engaged in the consumer discretionary sector, as defined by MSCI, Inc., the provider of the MSCI China Consumer Discretionary 10/50 Index. The Parent Index is a free float-adjusted market capitalization-weighted index designed to measure the performance of securities that are classified as operating in China according to the MSCI Global Investable Markets Index Methodology, and that satisfy minimum market capitalization and liquidity thresholds. The securities eligible for inclusion in the MSCI China Consumer Discretionary 10/50 Index include H-Shares (securities of companies incorporated in China that are denominated in Hong Kong Dollars and listed on the Hong Kong Stock Exchange (the "HKSE")), B-Shares (securities of companies denominated in U.S. dollars or Hong Kong dollars and listed on Shanghai Stock
23


Exchange (the "SSE") or Shenzen Stock Exchange (the "SZSE")), Red Chips (securities of companies with a majority of their business operations in mainland China and that are controlled by the national government or local governments of China, traded on the HKSE in Hong Kong dollars), P-Chips (securities of companies with the majority of their business operations in mainland China and controlled by individuals in China, but that are incorporated outside of China), A-Shares (securities of companies incorporated in mainland China that trade on Chinese exchanges in renminbi) that are accessible through the Shanghai-Hong Kong Stock Connect program ("Shanghai Connect") or the Shenzhen-Hong Kong Stock Connect program ("Shenzhen Connect", and together with Shanghai Connect, "Stock Connect Programs"), and foreign listings such as American Depository Receipts ("ADRs"). From time to time, other stock exchanges in China may participate in Stock Connect, and A-shares listed and traded on such other stock exchanges and accessible through Stock Connect may be added to the MSCI China Consumer Discretionary 10/50 Index, as determined by MSCI.

The MSCI China Consumer Discretionary 10/50 Index follows a rules-based methodology that is designed to select constituents of the Parent Index that are classified in the consumer discretionary sector under the Global Industry Classification System (GICS). The MSCI China Consumer Discretionary 10/50 Index is weighted according to each component's free-float adjusted market capitalization, but is modified so that, as of the rebalance date, no group entity (defined by the Index Provider as companies with a controlling stake owned by one entity) constitutes more than 10% of the MSCI China Consumer Discretionary 10/50 Index and so that, in the aggregate, the individual group entities that would represent more than 5% of the MSCI China Consumer Discretionary 10/50 Index represent no more than 50% of the MSCI China Consumer Discretionary 10/50 Index ("10/50 Cap"). The MSCI China Consumer Discretionary 10/50 Index is reconstituted and re-weighted quarterly. The MSCI China Consumer Discretionary 10/50 Index may include large- and mid-capitalization companies. As of December 31, 2021, the MSCI China Consumer Discretionary 10/50 Index had 75 constituents.
 
MSCI China Industrials 10/50 Index

The MSCI China Industrials 10/50 Index tracks the performance of companies in the MSCI China Index (the "Parent Index") that are classified as engaged in the industrials sector, as defined by MSCI, Inc., the provider of the MSCI China Industrials 10/50 Index. The Parent Index is a free float-adjusted market capitalization-weighted index designed to measure the performance of securities that are classified as operating in China according to the MSCI Global Investable Markets Index Methodology, and that satisfy minimum market capitalization and liquidity thresholds. The securities eligible for inclusion in the MSCI China Industrials 10/50 Index include H-Shares (securities of companies incorporated in China that are denominated in Hong Kong Dollars and listed on the Hong Kong Stock Exchange (the "HKSE")), B-Shares (securities of companies denominated in U.S. dollars or Hong Kong dollars and listed on Shanghai Stock Exchange (the "SSE") or Shenzen Stock Exchange (the "SZSE")), Red Chips (securities of companies with a majority of their business operations in mainland China and that are controlled by the national government or local governments of China, traded on the HKSE in Hong Kong dollars), P-Chips (securities of companies with the majority of their business operations in mainland China and controlled by individuals in China, but that are incorporated outside of China), A-Shares (securities of companies incorporated in mainland China that trade on Chinese exchanges in renminbi) that are accessible through the Shanghai-Hong Kong Stock Connect program ("Shanghai Connect") or the Shenzhen-Hong Kong Stock Connect program ("Shenzhen Connect", and together with Shanghai Connect, "Stock Connect Programs"), and foreign listings such as American Depository Receipts ("ADRs"). From time to time, other stock exchanges in China may participate in Stock Connect, and A-shares listed and traded on such other stock exchanges and accessible through Stock Connect may be added to the MSCI China Industrials 10/50 Index, as determined by MSCI.

The MSCI China Industrials 10/50 Index follows a rules-based methodology that is designed to select constituents of the Parent Index that are classified in the industrials sector under the Global Industry Classification System (GICS). The MSCI China Industrials 10/50 Index is weighted according to each component's free-float adjusted market capitalization, but is modified so that, as of the rebalance date, no group entity (defined by the Index Provider as companies with a controlling stake owned by one entity) constitutes more than 10% of the MSCI China Industrials 10/50 Index and so that, in the aggregate, the individual group entities that would represent more than 5% of the MSCI China Industrials 10/50 Index represent no more than 50% of the MSCI China Industrials 10/50 Index ("10/50 Cap"). The MSCI China Industrials 10/50 Index is reconstituted and re-weighted quarterly. The MSCI China Industrials 10/50 Index may include large- and mid-capitalization companies. As of December 31, 2021, the MSCI China Industrials 10/50 Index had 103 constituents.

MSCI China Communication Services 10/50 Index

The MSCI China Communication Services 10/50 Index tracks the performance of companies in the MSCI China Index (the "Parent Index") that are classified in the communication services sector, as defined by MSCI, Inc., the provider of the MSCI China Communication Services 10/50 Index. The Parent Index is a free float-adjusted market capitalization-weighted index designed to measure the performance of securities that are classified as operating in China according to the MSCI Global
24


Investable Markets Index Methodology, and that satisfy minimum market capitalization and liquidity thresholds. The securities eligible for inclusion in the MSCI China Communication Services 10/50 Index include H-Shares (securities of companies incorporated in China that are denominated in Hong Kong Dollars and listed on the Hong Kong Stock Exchange (the "HKSE")), B-Shares (securities of companies denominated in U.S. dollars or Hong Kong dollars and listed on Shanghai Stock Exchange (the "SSE") or Shenzen Stock Exchange (the "SZSE")), Red Chips (securities of companies with a majority of their business operations in mainland China and that are controlled by the national government or local governments of China, traded on the HKSE in Hong Kong dollars), P-Chips (securities of companies with the majority of their business operations in mainland China and controlled by individuals in China, but that are incorporated outside of China), A-Shares (securities of companies incorporated in mainland China that trade on Chinese exchanges in renminbi) that are accessible through the Shanghai-Hong Kong Stock Connect program ("Shanghai Connect") or the Shenzhen-Hong Kong Stock Connect program ("Shenzhen Connect", and together with Shanghai Connect, "Stock Connect Programs"), and foreign listings such as American Depository Receipts ("ADRs"). From time to time, other stock exchanges in China may participate in Stock Connect, and A-shares listed and traded on such other stock exchanges and accessible through Stock Connect may be added to the MSCI China Communication Services 10/50 Index, as determined by MSCI.

The MSCI China Communication Services 10/50 Index follows a rules-based methodology that is designed to select constituents of the Parent Index that are classified as engaged in the communication services sector under the Global Industry Classification System (GICS). The MSCI China Communication Services 10/50 Index is weighted according to each component's free-float adjusted market capitalization, but is modified so that, as of the rebalance date, no group entity (defined by the Index Provider as companies with a controlling stake owned by one entity) constitutes more than 10% of the MSCI China Communication Services 10/50 Index and so that, in the aggregate, the individual group entities that would represent more than 5% of the MSCI China Communication Services 10/50 Index represent no more than 50% of the MSCI China Communication Services 10/50 Index ("10/50 Cap"). The MSCI China Communication Services 10/50 Index is reconstituted and re-weighted quarterly. The MSCI China Communication Services 10/50 Index may include large- and mid-capitalization companies. As of December 31, 2021, the MSCI China Communication Services 10/50 Index had 26 constituents.

MSCI China Financials 10/50 Index

The MSCI China Financials 10/50 Index tracks the performance of companies in the MSCI China Index (the "Parent Index") that are classified as engaged in the financials sector, as defined by MSCI, Inc., the provider of the MSCI China Financials 10/50 Index. The Parent Index is a free float-adjusted market capitalization-weighted index designed to measure the performance of securities that are classified as operating in China according to the MSCI Global Investable Markets Index Methodology, and that satisfy minimum market capitalization and liquidity thresholds. The securities eligible for inclusion in the MSCI China Financials 10/50 Index include H-Shares (securities of companies incorporated in China that are denominated in Hong Kong Dollars and listed on the Hong Kong Stock Exchange (the "HKSE")), B-Shares (securities of companies denominated in U.S. dollars or Hong Kong dollars and listed on Shanghai Stock Exchange (the "SSE") or Shenzen Stock Exchange (the "SZSE")), Red Chips (securities of companies with a majority of their business operations in mainland China and that are controlled by the national government or local governments of China, traded on the HKSE in Hong Kong dollars), P-Chips (securities of companies with the majority of their business operations in mainland China and controlled by individuals in China, but that are incorporated outside of China), A-Shares (securities of companies incorporated in mainland China that trade on Chinese exchanges in renminbi) that are accessible through the Shanghai-Hong Kong Stock Connect program ("Shanghai Connect") or the Shenzhen-Hong Kong Stock Connect program ("Shenzhen Connect", and together with Shanghai Connect, "Stock Connect Programs"), and foreign listings such as American Depository Receipts ("ADRs"). From time to time, other stock exchanges in China may participate in Stock Connect, and A-shares listed and traded on such other stock exchanges and accessible through Stock Connect may be added to the MSCI China Financials 10/50 Index, as determined by MSCI.

The MSCI China Financials 10/50 Index follows a rules-based methodology that is designed to select constituents of the Parent Index that are classified in the financials sector under the Global Industry Classification System (GICS). The MSCI China Financials 10/50 Index is weighted according to each component's free-float adjusted market capitalization, but is modified so that, as of the rebalance date, no group entity (defined by the Index Provider as companies with a controlling stake owned by one entity) constitutes more than 10% of the MSCI China Financials 10/50 Index and so that, in the aggregate, the individual group entities that would represent more than 5% of the MSCI China Financials 10/50 Index represent no more than 50% of the MSCI China Financials 10/50 Index ("10/50 Cap"). The MSCI China Financials 10/50 Index is reconstituted and re-weighted quarterly. The MSCI China Financials 10/50 Index may include large- and mid-capitalization companies. As of December 31, 2021, the MSCI China Financials 10/50 Index had 98 constituents.
 
MSCI China Energy IMI Plus 10/50 Index

25


The MSCI China Energy IMI Plus 10/50 Index tracks the performance of companies in the MSCI China Investable Market Index (the "Parent Index") that are classified as engaged in the energy sector, as defined by MSCI, Inc., the provider of the MSCI China Energy IMI Plus 10/50 Index. The Parent Index is a free float-adjusted market capitalization-weighted index designed to measure the performance of securities that are classified as operating in China according to the MSCI Global Investable Markets Index Methodology, and that satisfy minimum market capitalization and liquidity thresholds. The securities eligible for inclusion in the MSCI China Energy IMI Plus 10/50 Index include H-Shares (securities of companies incorporated in China that are denominated in Hong Kong Dollars and listed on the Hong Kong Stock Exchange (the "HKSE")), B-Shares (securities of companies denominated in U.S. dollars or Hong Kong dollars and listed on Shanghai Stock Exchange (the "SSE") or Shenzen Stock Exchange (the "SZSE")), Red Chips (securities of companies with a majority of their business operations in mainland China and that are controlled by the national government or local governments of China, traded on the HKSE in Hong Kong dollars), P-Chips (securities of companies with the majority of their business operations in mainland China and controlled by individuals in China, but that are incorporated outside of China), A-Shares (securities of companies incorporated in mainland China that trade on Chinese exchanges in renminbi) that are accessible through the Shanghai-Hong Kong Stock Connect program ("Shanghai Connect") or the Shenzhen-Hong Kong Stock Connect program ("Shenzhen Connect", and together with Shanghai Connect, "Stock Connect Programs"), and foreign listings such as American Depository Receipts ("ADRs"). From time to time, other stock exchanges in China may participate in Stock Connect, and A-shares listed and traded on such other stock exchanges and accessible through Stock Connect may be added to the MSCI China Energy IMI Plus 10/50 Index, as determined by MSCI.

The MSCI China Energy IMI Plus 10/50 Index follows a rules-based methodology that is designed to select constituents of the Parent Index that are classified in the energy sector under the Global Industry Classification System (GICS). The MSCI China Energy IMI Plus 10/50 Index is weighted according to each component's free-float adjusted market capitalization, but is modified so that, as of the rebalance date, no issuer constitutes more than 10% of the MSCI China Energy IMI Plus 10/50 Index and so that, in the aggregate, the issuers that would represent more than 5% of the MSCI China Energy IMI Plus 10/50 Index represent no more than 50% of the MSCI China Energy IMI Plus 10/50 Index ("10/50 Cap"). The MSCI China Energy IMI Plus 10/50 Index is reconstituted and re-weighted quarterly. The MSCI China Energy IMI Plus 10/50 Index may include large-, mid-and small-capitalization companies. As of December 31, 2021, the MSCI China Energy IMI Plus 10/50 Index had 21 constituents.

MSCI China Materials 10/50 Index

The MSCI China Materials 10/50 Index tracks the performance of companies in the MSCI China Index (the "Parent Index") that are classified as engaged in the materials sector, as defined by MSCI, Inc., the provider of the MSCI China Materials 10/50 Index. The Parent Index is a free float-adjusted market capitalization-weighted index designed to measure the performance of securities that are classified as operating in China according to the MSCI Global Investable Markets Index Methodology, and that satisfy minimum market capitalization and liquidity thresholds. The securities eligible for inclusion in the MSCI China Materials 10/50 Index include H-Shares (securities of companies incorporated in China that are denominated in Hong Kong Dollars and listed on the Hong Kong Stock Exchange (the "HKSE")), B-Shares (securities of companies denominated in U.S. dollars or Hong Kong dollars and listed on Shanghai Stock Exchange (the "SSE") or Shenzen Stock Exchange (the "SZSE")), Red Chips (securities of companies with a majority of their business operations in mainland China and that are controlled by the national government or local governments of China, traded on the HKSE in Hong Kong dollars), P-Chips (securities of companies with the majority of their business operations in mainland China and controlled by individuals in China, but that are incorporated outside of China), A-Shares (securities of companies incorporated in mainland China that trade on Chinese exchanges in renminbi) that are accessible through the Shanghai-Hong Kong Stock Connect program ("Shanghai Connect") or the Shenzhen-Hong Kong Stock Connect program ("Shenzhen Connect", and together with Shanghai Connect, "Stock Connect Programs"), and foreign listings such as American Depository Receipts ("ADRs"). From time to time, other stock exchanges in China may participate in Stock Connect, and A-shares listed and traded on such other stock exchanges and accessible through Stock Connect may be added to the MSCI China Materials 10/50 Index, as determined by MSCI.

The MSCI China Materials 10/50 Index follows a rules-based methodology that is designed to select constituents of the Parent Index that are classified in the materials sector under the Global Industry Classification System (GICS). The MSCI China Materials 10/50 Index is weighted according to each component's free-float adjusted market capitalization, but is modified so that, as of the rebalance date, no group entity (defined by the Index Provider as companies with a controlling stake owned by one entity) constitutes more than 10% of the MSCI China Materials 10/50 Index and so that, in the aggregate, the individual group entities that would represent more than 5% of the MSCI China Materials 10/50 Index represent no more than 50% of the MSCI China Materials 10/50 Index ("10/50 Cap"). The MSCI China Materials 10/50 Index is reconstituted and re-weighted quarterly. The MSCI China Materials 10/50 Index may include large- and mid-capitalization companies. As of December 31, 2021, the MSCI China Materials 10/50 Index had 93 constituents.

26


MSCI Norway IMI 25/50 Index
 
The MSCI Norway IMI 25/50 Index is designed to measure the performance of the large-, mid-, and small-capitalization segments of the Norwegian market. It applies certain investment limits that are imposed on RICs under the Code. With 71 constituents as of December 31, 2021, the index covers approximately 99% of the free float-adjusted market capitalization in Norway. The index is maintained by MSCI.

FTSE/ASEAN 40 Index
 
The FTSE/ASEAN 40 Index tracks the equity performance of the 40 largest companies in the five ASEAN regions: Singapore, Malaysia, Indonesia, Thailand and Philippines. The index is free-float adjusted and weighted by modified market capitalization and designed using eligible stocks within the FTSE All-World universe. Stocks are liquidity screened to ensure that the index is tradable. The index is maintained by FTSE.

MSCI All Argentina 25/50 Index
 
The MSCI All Argentina 25/50 Index is designed to represent the performance of the broad Argentina equity universe, while including a minimum number of constituents. The broad Argentina equity universe includes securities that are classified in Argentina according to the MSCI Global Investable Market Index Methodology, together with companies that are headquartered or listed in Argentina and carry out the majority of their operations in Argentina. The index targets a minimum of 25 securities and 20 issuers at construction. The index is designed to take into account the 25% and 50% concentration constraints required for a fund to qualify as a regulated investment company ("RIC") under the Code in the United States. At each quarterly rebalance, no single index constituent may exceed 25% of the index weight, and the sum of all constituents with index weights greater than 5% may not exceed 50%. The index is maintained by MSCI.

MSCI All Greece Select 25/50 Index
 
The MSCI All Greece Select 25/50 Index is designed to represent the performance of the Broad Greece Equity Universe, while including constituents with minimum levels of liquidity. The Broad Greece Equity Universe includes securities that are classified in Greece according to the MSCI Global Investable Market Index Methodology, companies that are headquartered or listed in Greece and carry out the majority of their operations in Greece, and companies with economic exposure greater than 20% to Greece, as defined in the MSCI Economic Exposure Data Methodology. A specific capping methodology is applied to facilitate compliance with the rules governing the listing of financial products on exchanges in the United States. The Index is maintained by MSCI.

MSCI All Nigeria Select 25/50 Index
 
The MSCI All Nigeria Select 25/50 Index is designed to represent the performance of the broad Nigeria equity universe, while including a minimum number of constituents. The broad Nigeria equity universe includes securities that are classified in Nigeria according to the MSCI Global Investable Market Index Methodology, together with companies that are headquartered or listed in Nigeria and carry out the majority of their operations in Nigeria. Further, the index only includes securities with a minimum liquidity threshold of $100,000 average daily traded value, subject to 20 constituents being included in the index. If not, securities are added in decreasing order of average daily traded value until 20 securities are selected. The index targets a minimum of 20 securities at construction. The index is maintained by MSCI.

MSCI Select Emerging and Frontier Markets Access Index

The MSCI Select Emerging and Frontier Markets Access Index is designed to reflect equity performance of select emerging markets and frontier markets companies while maintaining diversification across individual countries, sectors and issuers. The index is constructed from the MSCI EFM ex BRICKT (Brazil, Russia, India, China, South Korea & Taiwan) Index (the "Parent
Index"). Securities from the Parent Index are classified into emerging markets countries and frontier markets countries based on the market classification approach of MSCI, the provider of the index. Constituents within the emerging markets countries classification are weighted by free-float adjusted market capitalization and constituents within the frontier markets countries classification are weighted by their double free-float adjusted market capitalization, in each case, subject
to applicable country, sector, and issuer capping constraints. As of  December 31, 2021,  the  index  had  201  constituents  from  the  following  countries: Bahrain, Bangladesh, Chile, Czech Republic, Egypt, Greece, Iceland, Indonesia, Jordan, Kazakhstan, Kenya, Kuwait, Luxembourg, Malaysia, Mexico, Morocco, Nigeria, Oman, Peru, Philippines, Poland, Qatar, Romania, Saudi Arabia, South Africa, Sri Lanka, Thailand, Turkey, United Arab Emirates and Vietnam. The index is maintained by MSCI.

27


MSCI All Portugal Plus 25/50 Index

The MSCI All Portugal Plus 25/50 Index is designed to represent the performance of the Broad Portugal Equity Universe, while including constituents with minimum levels of liquidity. The Broad Portugal Equity Universe includes securities that are classified in Portugal according to the MSCI Global Investable Market Index Methodology, together with companies that are headquartered or listed in Portugal and carry out the majority of their operations in Portugal. A specific capping methodology is applied to facilitate compliance with the rules governing the listing of financial products on exchanges in the United States. The index is maintained by MSCI.

DAX Index

The DAX Index tracks the segment of the largest and most actively traded companies - known as blue chips - on the German equities market. It contains the shares of the 30 largest and most liquid companies admitted to the Frankfurt Stock Exchange in the Prime Standard segment. The DAX Index represents about 80% of the free-float market capitalization authorized in Germany.

MSCI All Pakistan Select 25/50 Index
 
The MSCI All Pakistan Select 25/50 Index is designed to represent the performance of the broad Pakistan equity universe, while including a minimum number of constituents. The broad Pakistan equity universe includes securities that are classified in Pakistan according to the MSCI Global Investable Market Index Methodology, together with companies that are headquartered or listed in Pakistan and carry out the majority of their operations in Pakistan. The index targets a minimum of 25 securities and 20 issuers at construction. The index is designed to take into account the 25% and 50% concentration constraints required for a fund to qualify as a RIC under the Code in the United States. At each quarterly rebalance, no single index constituent may exceed 25% of the index weight, and the sum of all constituents with index weights greater than 5% may not exceed 50%. The index is maintained by MSCI.

MSCI China Consumer Staples 10/50 Index

The MSCI China Consumer Staples 10/50 Index tracks the performance of companies in the MSCI China Index (the "Parent Index") that are classified as engaged in the consumer staples sector, as defined by MSCI, Inc., the provider of the MSCI China Consumer Staples 10/50 Index. The Parent Index is a free float-adjusted market capitalization-weighted index designed to measure the performance of securities that are classified as operating in China according to the MSCI Global Investable Markets Index Methodology, and that satisfy minimum market capitalization and liquidity thresholds. The securities eligible for inclusion in the MSCI China Consumer Staples 10/50 Index include H-Shares (securities of companies incorporated in China that are denominated in Hong Kong Dollars and listed on the Hong Kong Stock Exchange (the "HKSE")), B-Shares (securities of companies denominated in U.S. dollars or Hong Kong dollars and listed on Shanghai Stock Exchange (the "SSE") or Shenzen Stock Exchange (the "SZSE")), Red Chips (securities of companies with a majority of their business operations in mainland China and that are controlled by the national government or local governments of China, traded on the HKSE in Hong Kong dollars), P-Chips (securities of companies with the majority of their business operations in mainland China and controlled by individuals in China, but that are incorporated outside of China), A-Shares (securities of companies incorporated in mainland China that trade on Chinese exchanges in renminbi) that are accessible through the Shanghai-Hong Kong Stock Connect program ("Shanghai Connect") or the Shenzhen-Hong Kong Stock Connect program ("Shenzhen Connect", and together with Shanghai Connect, "Stock Connect Programs"), and foreign listings such as American Depository Receipts ("ADRs"). From time to time, other stock exchanges in China may participate in Stock Connect, and A-shares listed and traded on such other stock exchanges and accessible through Stock Connect may be added to the MSCI China Consumer Staples 10/50 Index, as determined by MSCI.

The MSCI China Consumer Staples 10/50 Index follows a rules-based methodology that is designed to select constituents of the Parent Index that are classified in the consumer staples sector under the Global Industry Classification System (GICS). The MSCI China Consumer Staples 10/50 Index is weighted according to each component's free-float adjusted market capitalization, but is modified so that, as of the rebalance date, no group entity (defined by the Index Provider as companies with a controlling stake owned by one entity) constitutes more than 10% of the MSCI China Consumer Staples 10/50 Index and so that, in the aggregate, the individual group entities that would represent more than 5% of the MSCI China Consumer Staples 10/50 Index represent no more than 50% of the MSCI China Consumer Staples 10/50 Index ("10/50 Cap"). The MSCI China Consumer Staples 10/50 Index is reconstituted and re-weighted quarterly. The MSCI China Consumer Staples 10/50 Index may include large- and mid-capitalization companies. As of December 31, 2021, the MSCI China Consumer Staples 10/50 Index had 60 constituents.

28


MSCI China Health Care 10/50 Index

The MSCI China Health Care 10/50 Index tracks the performance of companies in the MSCI China Index (the "Parent Index") that are classified as engaged in the health care sector, as defined by MSCI, Inc., the provider of the MSCI China Health Care 10/50 Index. The Parent Index is a free float-adjusted market capitalization-weighted index designed to measure the performance of securities that are classified as operating in China according to the MSCI Global Investable Markets Index Methodology, and that satisfy minimum market capitalization and liquidity thresholds. The securities eligible for inclusion in the MSCI China Health Care 10/50 Index include H-Shares (securities of companies incorporated in China that are denominated in Hong Kong Dollars and listed on the Hong Kong Stock Exchange (the "HKSE")), B-Shares (securities of companies denominated in U.S. dollars or Hong Kong dollars and listed on Shanghai Stock Exchange (the "SSE") or Shenzen Stock Exchange (the "SZSE")), Red Chips (securities of companies with a majority of their business operations in mainland China and that are controlled by the national government or local governments of China, traded on the HKSE in Hong Kong dollars), P-Chips (securities of companies with the majority of their business operations in mainland China and controlled by individuals in China, but that are incorporated outside of China), A-Shares (securities of companies incorporated in mainland China that trade on Chinese exchanges in renminbi) that are accessible through the Shanghai-Hong Kong Stock Connect program ("Shanghai Connect") or the Shenzhen-Hong Kong Stock Connect program ("Shenzhen Connect", and together with Shanghai Connect, "Stock Connect Programs"), and foreign listings such as American Depository Receipts ("ADRs"). From time to time, other stock exchanges in China may participate in Stock Connect, and A-shares listed and traded on such other stock exchanges and accessible through Stock Connect may be added to the MSCI China Health Care 10/50 Index, as determined by MSCI.

The MSCI China Health Care 10/50 Index follows a rules-based methodology that is designed to select constituents of the Parent Index that are classified in the health care sector under the Global Industry Classification System (GICS). The MSCI China Health Care 10/50 Index is weighted according to each component's free-float adjusted market capitalization, but is modified so that, as of the rebalance date, no group entity (defined by the Index Provider as companies with a controlling stake owned by one entity) constitutes more than 10% of the MSCI China Health Care 10/50 Index and so that, in the aggregate, the individual group entities that would represent more than 5% of the MSCI China Health Care 10/50 Index represent no more than 50% of the MSCI China Health Care 10/50 Index ("10/50 Cap"). The MSCI China Health Care 10/50 Index is reconstituted and re-weighted quarterly. The MSCI China Health Care 10/50 Index may include large- and mid-capitalization companies. As of December 31, 2021, the MSCI China Health Care 10/50 Index had 87 constituents.

MSCI China Information Technology 10/50 Index

The MSCI China Information Technology 10/50 Index tracks the performance of companies in the MSCI China Index (the "Parent Index") that are classified as engaged in the information technology sector, as defined by MSCI, Inc., the provider of the MSCI China Information Technology 10/50 Index. The Parent Index is a free float-adjusted market capitalization-weighted index designed to measure the performance of securities that are classified as operating in China according to the MSCI Global Investable Markets Index Methodology, and that satisfy minimum market capitalization and liquidity thresholds. The securities eligible for inclusion in the MSCI China Information Technology 10/50 Index include H-Shares (securities of companies incorporated in China that are denominated in Hong Kong Dollars and listed on the Hong Kong Stock Exchange (the "HKSE")), B-Shares (securities of companies denominated in U.S. dollars or Hong Kong dollars and listed on Shanghai Stock Exchange (the "SSE") or Shenzen Stock Exchange (the "SZSE")), Red Chips (securities of companies with a majority of their business operations in mainland China and that are controlled by the national government or local governments of China, traded on the HKSE in Hong Kong dollars), P-Chips (securities of companies with the majority of their business operations in mainland China and controlled by individuals in China, but that are incorporated outside of China), A-Shares (securities of companies incorporated in mainland China that trade on Chinese exchanges in renminbi) that are accessible through the Shanghai-Hong Kong Stock Connect program ("Shanghai Connect") or the Shenzhen-Hong Kong Stock Connect program ("Shenzhen Connect", and together with Shanghai Connect, "Stock Connect Programs"), and foreign listings such as American Depository Receipts ("ADRs"). From time to time, other stock exchanges in China may participate in Stock Connect, and A-shares listed and traded on such other stock exchanges and accessible through Stock Connect may be added to the MSCI China Information Technology 10/50 Index, as determined by MSCI.

The MSCI China Information Technology 10/50 Index follows a rules-based methodology that is designed to select constituents of the Parent Index that are classified in the information technology sector under the Global Industry Classification System (GICS). The MSCI China Information Technology 10/50 Index is weighted according to each component's free-float adjusted market capitalization, but is modified so that, as of the rebalance date, no group entity (defined by the Index Provider as companies with a controlling stake owned by one entity) constitutes more than 10% of the MSCI China Information Technology 10/50 Index and so that, in the aggregate, the individual group entities that would represent more than 5% of the MSCI China Information Technology 10/50 Index represent no more than 50% of the MSCI China Information Technology
29


10/50 Index ("10/50 Cap"). The MSCI China Information Technology 10/50 Index is reconstituted and re-weighted quarterly. The MSCI China Information Technology 10/50 Index may include large- and mid-capitalization companies. As of December 31, 2021, the MSCI China Information Technology 10/50 Index had 112 constituents.

MSCI China Real Estate 10/50 Index

The MSCI China Real Estate 10/50 Index tracks the performance of companies in the MSCI China Index (the "Parent Index") that are classified as engaged in the real estate sector, as defined by MSCI, Inc., the provider of the MSCI China Real Estate 10/50 Index. The Parent Index is a free float-adjusted market capitalization-weighted index designed to measure the performance of securities that are classified as operating in China according to the MSCI Global Investable Markets Index Methodology, and that satisfy minimum market capitalization and liquidity thresholds. The securities eligible for inclusion in the MSCI China Real Estate 10/50 Index include H-Shares (securities of companies incorporated in China that are denominated in Hong Kong Dollars and listed on the Hong Kong Stock Exchange (the "HKSE")), B-Shares (securities of companies denominated in U.S. dollars or Hong Kong dollars and listed on Shanghai Stock Exchange (the "SSE") or Shenzen Stock Exchange (the "SZSE")), Red Chips (securities of companies with a majority of their business operations in mainland China and that are controlled by the national government or local governments of China, traded on the HKSE in Hong Kong dollars), P-Chips (securities of companies with the majority of their business operations in mainland China and controlled by individuals in China, but that are incorporated outside of China), A-Shares (securities of companies incorporated in mainland China that trade on Chinese exchanges in renminbi) that are accessible through the Shanghai-Hong Kong Stock Connect program ("Shanghai Connect") or the Shenzhen-Hong Kong Stock Connect program ("Shenzhen Connect", and together with Shanghai Connect, "Stock Connect Programs"), and foreign listings such as American Depository Receipts ("ADRs"). From time to time, other stock exchanges in China may participate in Stock Connect, and A-shares listed and traded on such other stock exchanges and accessible through Stock Connect may be added to the MSCI China Real Estate 10/50 Index, as determined by MSCI.

The MSCI China Real Estate 10/50 Index follows a rules-based methodology that is designed to select constituents of the Parent Index that are classified in the real estate sector under the Global Industry Classification System (GICS). The MSCI China Real Estate 10/50 Index is weighted according to each component's free-float adjusted market capitalization, but is modified so that, as of the rebalance date, no group entity (defined by the Index Provider as companies with a controlling stake owned by one entity) constitutes more than 10% of the MSCI China Real Estate 10/50 Index and so that, in the aggregate, the individual group entities that would represent more than 5% of the MSCI China Real Estate 10/50 Index represent no more than 50% of the MSCI China Real Estate 10/50 Index ("10/50 Cap"). The MSCI China Real Estate 10/50 Index is reconstituted and re-weighted quarterly. The MSCI China Real Estate 10/50 Index may include large- and mid-capitalization companies. As of December 31, 2021, the MSCI China Real Estate 10/50 Index had 42 constituents.

MSCI China Utilities 10/50 Index

The MSCI China Utilities 10/50 Index tracks the performance of companies in the MSCI China Index (the "Parent Index") that are classified as engaged in the utilities sector, as defined by MSCI, Inc., the provider of the MSCI China Utilities 10/50 Index. The Parent Index is a free float-adjusted market capitalization-weighted index designed to measure the performance of securities that are classified as operating in China according to the MSCI Global Investable Markets Index Methodology, and that satisfy minimum market capitalization and liquidity thresholds. The securities eligible for inclusion in the MSCI China Utilities 10/50 Index include H-Shares (securities of companies incorporated in China that are denominated in Hong Kong Dollars and listed on the Hong Kong Stock Exchange (the "HKSE")), B-Shares (securities of companies denominated in U.S. dollars or Hong Kong dollars and listed on Shanghai Stock Exchange (the "SSE") or Shenzen Stock Exchange (the "SZSE")), Red Chips (securities of companies with a majority of their business operations in mainland China and that are controlled by the national government or local governments of China, traded on the HKSE in Hong Kong dollars), P-Chips (securities of companies with the majority of their business operations in mainland China and controlled by individuals in China, but that are incorporated outside of China), A-Shares (securities of companies incorporated in mainland China that trade on Chinese exchanges in renminbi) that are accessible through the Shanghai-Hong Kong Stock Connect program ("Shanghai Connect") or the Shenzhen-Hong Kong Stock Connect program ("Shenzhen Connect", and together with Shanghai Connect, "Stock Connect Programs"), and foreign listings such as American Depository Receipts ("ADRs"). From time to time, other stock exchanges in China may participate in Stock Connect, and A-shares listed and traded on such other stock exchanges and accessible through Stock Connect may be added to the MSCI China Utilities 10/50 Index, as determined by MSCI.

The MSCI China Utilities 10/50 Index follows a rules-based methodology that is designed to select all constituents of the Parent Index that are classified in the utilities sector under the Global Industry Classification System (GICS). The MSCI China Utilities 10/50 Index is weighted according to each component's free-float adjusted market capitalization, but is modified so that, as of the rebalance date, no group entity (defined by the Index Provider as companies with a controlling stake owned by
30


one entity) constitutes more than 10% of the MSCI China Utilities 10/50 Index and so that, in the aggregate, the individual group entities that would represent more than 5% of the MSCI China Utilities 10/50 Index represent no more than 50% of the MSCI China Utilities 10/50 Index ("10/50 Cap"). The MSCI China Utilities 10/50 Index is reconstituted and re-weighted quarterly. The MSCI China Utilities 10/50 Index may include large- and mid-capitalization companies. As of December 31, 2021, the MSCI China Utilities 10/50 Index had 23 constituents.

MSCI Vietnam IMI Select 25/50 Index

The MSCI Vietnam IMI Select 25/50 Index is designed to represent the performance of the broad Vietnam equity universe, while including a minimum number of constituents, as defined by MSCI, Inc. ("MSCI"), the provider of the MSCI Vietnam IMI Select 25/50 Index. The broad Vietnam equity universe includes securities that are classified in Vietnam according to the MSCI Global Investable Market Index Methodology, together with companies that are headquartered or listed in Vietnam and carry out the majority of their operations in Vietnam, as determined solely by MSCI. The country classification of a company is generally determined by MSCI using the company’s country of incorporation and the primary listing of its securities. MSCI will classify a company in the country of incorporation if its securities have a primary listing in that country. In such cases where a company’s securities have a primary listing outside of the country of incorporation, additional criteria such as the location of the company’s headquarters and the geographic distribution of its operations (e.g. assets and revenues), management, and shareholder base are considered by the Index Provider for classification purposes. The MSCI Vietnam IMI Select 25/50 Index follows a rules-based methodology that is designed to select all securities that satisfy the above criteria and which have a market capitalization greater than or equal to the 99th percentile of listed developed market securities, have an annual traded value ratio (a measure of liquidity calculated by MSCI) greater than or equal to 15%, and have traded on greater than or equal to 50% of trading days over the past twelve months.

The MSCI Vietnam IMI Select 25/50 Index is weighted according to each component's free-float adjusted market capitalization. Free-float adjusted market capitalization measures a company’s market capitalization discounted by the percentage of its shares readily available to be traded by the general public in the open market (“free float”). In addition, a liquidity discount factor based on the security’s annual traded value ratio (“ATVR”) is applied. ATVR is a liquidity metric calculated by MSCI. The liquidity discount factor is applied to each company’s free float market capitalization for the purposes of calculating the allocated index weight to each constituent, such that the allocated index weight is lower for less liquid securities (and higher for more liquid securities) than it would otherwise be. The weights are further modified for diversification purposes, so that, as of the rebalance date, no group entity (defined by MSCI as companies that are jointly controlled by a single parent company) constitutes more than 25% of the MSCI Vietnam IMI Select 25/50 Index and so that, in the aggregate, the individual group entities that would represent more than 5% of the MSCI Vietnam IMI Select 25/50 Index represent no more than 50% of the MSCI Vietnam IMI Select 25/50 Index ("25/50 Cap"). The MSCI Vietnam IMI Select 25/50 Index and the Fund are reconstituted and re-weighted quarterly. The MSCI Vietnam IMI Select 25/50 Index may include large-, mid- and small-capitalization companies, and components primarily include real estate companies. As of December 31, 2021, small capitalization companies are those companies with a market capitalization of $300 million or more but less than $2 billion; mid-capitalization companies are those companies with a market capitalization of $2 billion or more but less than $10 billion; and large-capitalization companies are those companies with a market capitalization of $10 billion or greater. As of December 31, 2021, the MSCI Vietnam IMI Select 25/50 Index had 57 constituents.
 
Solactive Global Copper Miners Total Return Index
 
The Solactive Global Copper Miners Total Return Index tracks the performance of the largest and most liquid listed companies that are active in some aspect of the copper mining industry, such as copper mining, refining or exploration. The index is calculated as a total return index in U.S. dollars and adjusted semi-annually. The stocks are screened for liquidity and weighted according to modified free-float market capitalization. A specific capping methodology is used at the time of the semi-annual index review to seek to assure compliance with the rules governing the listing of financial products on exchanges in the United States. The index is maintained by Solactive AG.

Solactive Global Silver Miners Total Return Index
 
The Solactive Global Silver Miners Total Return Index tracks the performance of the largest and most liquid listed companies that are active in some aspect of the silver mining industry such as silver mining, refining or exploration. The index is calculated as a total return index in U.S. dollars and adjusted semi-annually. The stocks are screened for liquidity and weighted according to modified free-float market capitalization. A specific capping methodology is used at the time of the semi-annual index review to seek to assure compliance with the rules governing the listing of financial products on exchanges in the United States. The index is maintained by Solactive AG.

31


Solactive Global Gold Explorers & Developers Total Return Index
 
The Solactive Global Gold Explorers & Developers Total Return Index is designed to measure broad based equity market performance of global companies involved in gold exploration, including companies that are engaged in both gold exploration and limited levels of gold production ("Developers"). The stocks are screened for liquidity and weighted according to modified free-float market capitalization. A specific capping methodology is used at the time of the semi-annual index review to seek to assure compliance with the rules governing the listing of financial products on exchanges in the United States.

Solactive Global Uranium & Nuclear Components Total Return Index
 
The Solactive Global Uranium & Nuclear Components Total Return Index is designed to measure broad based equity market performance of global companies involved in the uranium industry, including companies that are engaged in uranium mining, exploration for uranium, technologies related to the uranium industry and the production of nuclear components, and investment trust whose primary purpose is to provide exposure to physical uranium. The stocks are screened for liquidity and weighted according to modified effective market capitalization, using a scheme that accounts for liquidity in determining final weights. A specific capping methodology is used at the time of the semi-annual index review to seek to assure compliance with the rules governing the listing of financial products on exchanges in the United States. The Index is maintained by Solactive AG.

Solactive Global Lithium Index
 
The Solactive Global Lithium Index tracks the performance of the largest and most liquid listed companies that are active in the exploration and/or mining of Lithium or the production of Lithium batteries. The index is calculated as a total return index in U.S. dollars and adjusted semi-annually. The stocks are screened for liquidity and weighted according to modified free-float market capitalization. A specific capping methodology is used at the time of the semi-annual index review to seek to assure compliance with the rules governing the listing of financial products on exchanges in the United States. The index is maintained by Solactive AG.

Solactive Global SuperDividend® Index
 
The Solactive Global SuperDividend® Index tracks the equity performance of 100 equally weighted companies that rank among the highest dividend-yielding equity securities in the world. The index provider applies certain dividend stability filters. The index is maintained by Solactive AG.

Solactive Social Media Total Return Index
 
The Solactive Social Media Total Return Index is designed to reflect the equity performance of companies involved in the social media industry, including companies that provide social networking, file sharing, and other web-based media applications. The stocks are screened for liquidity and weighted according to modified free-float market capitalization. The index is maintained by Solactive AG.

Solactive Guru Index
 
The Solactive Guru Index is comprised of the top U.S. listed equity positions reported on Form 13F by a select group of entities that Solactive AG characterizes as hedge funds. Hedge funds are selected from a pool of thousands of privately offered pooled investment vehicles based on the size of their reported equity holdings and the efficacy of replicating their publicly disclosed positions. Hedge funds must have minimum reported holdings of $500 million in their Form 13F to be considered for the index. Additional filters are applied to eliminate hedge funds that have high turnover rates for equity holdings. Only hedge funds with concentrated top holdings are included in the selection process.

Once the hedge fund pool has been determined, the index provider utilizes 13F filings to compile the top stock holding from each of these hedge funds. The index is calculated as a total return index and adjusted quarterly. The stocks are screened for liquidity and equal weighted. The Index is maintained by Solactive AG.

S&P Enhanced Yield North American Preferred Stock Index
 
The S&P Enhanced Yield North American Preferred Stock Index tracks the performance of the highest-yielding preferred securities in the United States, as determined by the index provider. The index is comprised of preferred stocks that meet certain criteria relating to size, liquidity, issuer concentration and rating, maturity and other requirements, as determined by the index
32


provider. The index does not seek to directly reflect the performance of the companies issuing the preferred stock. The index is maintained by S&P.

Indxx SuperDividend® U.S. Low Volatility Index

The Indxx SuperDividend® U.S. Low Volatility Index is maintained by Indxx, LLC. The index tracks the performance of 50 equally weighted common stocks, master limited partnerships ("MLPs") and real estate investment trusts ("REITs") that rank among the highest dividend-yielding equity securities in the United States, as defined by Indxx, LLC. The components of the index have paid dividends consistently over the last two years. The Underlying Index is comprised of securities that Indxx, LLC determines to have lower relative volatility (i.e., low beta) than the market.

CBOE S&P 500® BuyWrite Index

The CBOE S&P 500® BuyWrite Index is a benchmark index that measures the performance of a theoretical portfolio that holds a portfolio of the stocks included in the S&P 500® Index ("S&P 500 Index"), and "writes" (or sells) a succession of one-month at-the-money S&P 500 Index covered call options.

CBOE NASDAQ-100® BuyWrite V2 Index

The CBOE NASDAQ-100® BuyWrite Index ("BXN Index") is a benchmark index that measures the performance of a theoretical portfolio that holds a portfolio of the stocks included in the NASDAQ-100® Index ("NASDAQ-100 Index"), and "writes" (or sells) a succession of one-month at-the-money NASDAQ-100 Index covered call options. The CBOE NASDAQ-100® BuyWrite V2 Index ("BXNT Index") replicates the methodology used to calculate the BXN Index, with one exception: the written NASDAQ-100® Index covered call options are held until one day prior to the expiration date (i.e., generally the Thursday preceding the Third Friday of the month) and are liquidated at a volume-weighted average price determined at the close.

MSCI Emerging Markets Top 50 Dividend Index

The MSCI Emerging Markets Top 50 Dividend Index tracks the performance of 50 equally weighted companies that rank among the highest dividend yielding equity securities in Emerging Markets, as defined by MSCI. The Underlying Index may include components from the following countries: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, South Korea, Kuwait, Luxembourg, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates. The MSCI Emerging Markets Top 50 Dividend Index begins with the MSCI Emerging Markets Index, which is a capitalization-weighted index, as its starting universe, and then follows a rules-based methodology that is designed to select among the highest dividend yielding equity securities of the MSCI Emerging Markets Index. The MSCI Emerging Markets Top 50 Dividend Index is equal weighted and rebalanced annually.

Solactive Global SuperDividend® REIT Index
 
The Solactive Global SuperDividend® REIT Index tracks the performance of REITs that rank among the highest-yielding REITs globally, as determined by the index provider. The index is maintained by Solactive AG.

Indxx Renewable Energy Producers Index

The Indxx Renewable Energy Producers Index is designed to provide exposure to publicly traded companies that produce energy from renewable sources including wind, solar, hydroelectric, geothermal, and biofuels (including publicly traded companies that are formed to own operating assets that produce defined cash flows (“YieldCos”)) (collectively, "Renewable Energy Companies"), as defined by Indxx LLC, the index provider.

In constructing the Indxx Renewable Energy Producers Index, Indxx LLC first identifies FactSet Industries related to renewable energy production. Companies within these industries, as of the selection date, are further reviewed by Indxx LLC on the basis of revenue related to renewable energy production. To be eligible for the Indxx Renewable Energy Producers Index, a company is considered by Indxx LLC to be a Renewable Energy Company if the company generates at least 50% of its revenues from renewable energy production, as determined by Indxx LLC. Indxx LLC classifies Renewable Energy Companies as those companies that produce energy from renewable sources, including: wind, solar, hydroelectric, geothermal, and biofuels (including YieldCos), as determined by Indxx LLC.

S&P 500® Catholic Values Index
33



The S&P 500® Catholic Values Index is designed to provide exposure to U.S. equity securities included in the S&P 500® Index while maintaining alignment with the moral and social teachings of the Catholic Church. The Underlying Index is based on the S&P 500® Index, and generally comprises approximately 500 or less U.S. listed common stocks. All index constituents are members of the S&P 500® Index and follow the eligibility criteria for that index. From this starting universe, constituents are screened to exclude companies involved in activities which are perceived to be inconsistent with Catholic values as outlined in the Socially Responsible Investment Guidelines of the United States Conference of Catholic Bishops ("USCCB"). The Underlying Index then reweights the remaining constituents so that the Underlying Index's sector exposures matches the sector exposures of the S&P 500® Index. The Underlying Index is sponsored by Standard & Poor's Financial Services LLC (the "Index Provider"), which is an organization that is independent of, and unaffiliated with, the Fund and Global X Management Company LLC, the investment adviser for the Fund ("Adviser"). The Index Provider determines the relative weightings of the securities in the Underlying Index and publishes information regarding the market value of the Underlying Index. As of December 31, 2021, the Underlying Index had 444 constituents. The Fund's investment objective and Underlying Index may be changed without shareholder approval.

MSCI EAFE Top 50 Dividend Index

The MSCI EAFE Top 50 Dividend Index tracks the performance of 50 equally-weighted companies that rank among the highest dividend yielding equity securities in Europe, Australasia and the Far East, as defined by MSCI. The MSCI EAFE Top 50 Dividend Index begins with the MSCI EAFE Index, which is a capitalization-weighted index, and then follows a rules-based methodology that is designed to select among the highest dividend yielding equity securities of the MSCI EAFE Index. The MSCI EAFE Top 50 Dividend Index is equal weighted and rebalanced annually. As of December 31, 2021, components from the following developed market countries were eligible for inclusion in the MSCI EAFE Top 50 Dividend Index: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the United Kingdom. The MSCI EAFE Top 50 Dividend Index may include large-, mid- or small-capitalization companies. The MSCI EAFE Top 50 Dividend Index primarily includes components from the following sectors: Consumer Discretionary, Energy, Financials, Materials, Real Estate, Telecommunication Services, and Utilities. The components of the MSCI EAFE Top 50 Dividend Index, and the degree to which these components represent certain industries, are likely to change over time.

Solactive E-commerce Index

The Solactive E-commerce Index is designed to provide exposure to exchange-listed companies that are positioned to benefit from the increased adoption of e-commerce as a distribution model, including but not limited to companies whose principal business is in operating e-commerce platforms, providing e-commerce software and services, and/or selling goods and services online (collectively, "E-commerce Companies"), as defined by Solactive AG, the provider of the Solactive E-commerce Index ("Index Provider").

In constructing the Solactive E-commerce Index, the Index Provider first applies a proprietary natural language processing algorithm to the eligible universe, which seeks to identify and rank companies with direct exposure to the e-commerce industry based on filings, disclosures and other public information (e.g. regulatory filings, earnings transcripts, etc.). Companies identified by the natural language processing algorithm, as of the selection date, are further reviewed by the Index Provider on the basis of revenue related to e-commerce activities. To be eligible for the Solactive E-commerce Index, a company is considered by the Index Provider to be an E-commerce Company if the company generates at least 50% of its revenues from e-commerce activities, as determined by the Index Provider. E-commerce Companies are those companies that (i) operate e-commerce platforms that connect buyers and sellers of goods and services via online marketplaces, (ii) provide e-commerce software, analytics or services that facilitate the development and enhancement of e-commerce platforms, and/or (iii) primarily sell goods and services online and generate the majority of their overall revenue from online retail, as determined by the Index Provider.
To be a part of the eligible universe of the Solactive E-commerce Index, certain minimum market capitalization and liquidity criteria, as defined by the Index Provider, must be met. As of December 31, 2021, companies must have a minimum market capitalization of $200 million and a minimum average daily turnover for the last 6 months greater than or equal to $2 million in order to be eligible for inclusion in the Solactive E-commerce Index and must retain a minimum average daily turnover for the last 6 months greater than or equal to $1.4 million in order to be eligible to remain in the Solactive E-commerce Index. As of December 31, 2021, companies listed in the following countries were eligible for inclusion in the Solactive E-commerce Index: Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Poland, Portugal, Singapore, South Korea, Spain, Sweden, Switzerland, Taiwan, Turkey, United Kingdom and the United States.
34



The Solactive E-commerce Index is weighted according to a modified capitalization weighting methodology and is reconstituted and re-weighted semi-annually, with each included security being allocated a maximum weight of 4% and a minimum weight of 0.3% in connection with each semi-annual rebalance. Modified capitalization weighting seeks to weight constituents primarily based on market capitalization, but subject to caps on the weights of the individual securities. Generally
speaking, this approach will limit the amount of concentration in the largest market capitalization companies and increase company-level diversification. The Solactive E-commerce Index may include large-, mid- or small- capitalization companies, and components primarily include information technology and consumer discretionary companies.

Cboe Russell 2000 BuyWrite Index
 
The Cboe Russell 2000 BuyWrite Index measures the performance of a theoretical portfolio that holds a portfolio of the stocks included in the Russell 2000 Index, and "writes" (or sells) a succession of one-month at-the-money covered call options on the Russell 2000 Index. The written covered call options on the Russell 2000 Index are held until expiration. The Russell 2000 Index is an equity benchmark which measures the performance of the small-capitalization sector of the U.S. equity market, as defined by FTSE Russell.

S&P Developed Ex-U.S. Catholic Values Index

The S&P Developed ex-U.S. Catholic Values Index is designed to provide exposure to developed market equity securities outside the U.S. while maintaining alignment with the moral and social teachings of the Catholic Church. The S&P Developed ex-U.S. Catholic Values Index is based on the S&P EPAC ex-Korea Large Cap Index, a benchmark index that provides exposure to the large capitalization segment of developed markets within the Europe and Asia Pacific regions, excluding Korea. The S&P EPAC ex-Korea Large Cap Index does not target any specific sector exposure. All index constituents are members of the S&P EPAC ex-Korea Large Cap Index and follow the eligibility criteria for that index. From this starting universe, constituents are screened to exclude companies involved in activities which are perceived to be inconsistent with Catholic values as outlined in the Socially Responsible Investment Guidelines of the United States Conference of Catholic Bishops ("USCCB"). The S&P Developed ex-U.S. Catholic Values Index then reweights the remaining constituents so that the S&P Developed ex-U.S. Catholic Values Index’s sector exposures match the current sector exposures of the S&P EPAC ex-Korea Large Cap Index. The S&P Developed ex-U.S. Catholic Values Index is sponsored by Standard & Poor’s Financial Services LLC (the "Index Provider"). The Index Provider determines the relative weightings of the securities in the Underlying Index and publishes information regarding the market value of the S&P Developed ex-U.S. Catholic Values Index. As of December 31, 2021, the Underlying Index had 471 constituents. The Fund's investment objective and Underlying Index may be changed without shareholder approval.

Cboe Nasdaq 100 Half BuyWrite V2 Index

The Cboe Nasdaq 100 Half BuyWrite V2 Index measures the performance of a theoretical portfolio that holds a portfolio of the stocks included in the NASDAQ 100® Index, and "writes" (or sells) a succession of one-month at-the-money covered call options on the NASDAQ 100® Index. The written covered call options on the NASDAQ 100® Index correspond to approximately 50% of the value of the portfolio of stocks in the NASDAQ 100® Index. The written covered call options on the NASDAQ 100® Index are held until one day prior to expiration. The NASDAQ 100® Index is a modified market capitalization weighted index containing equity securities of the 100 largest non-financial companies listed on the NASDAQ Stock Market. Modified capitalization weighting seeks to weight constituents primarily based on market capitalization, but subject to caps on the weights of the individual securities. Generally speaking, this approach will limit the amount of concentration in the largest market capitalization companies and increase company-level diversification.

The Cboe Nasdaq 100 Half BuyWrite V2 Index is sponsored by Nasdaq, Inc., which is an organization that is independent of the Fund and the Adviser.

Cboe S&P 500 Half BuyWrite Index

The Cboe S&P 500 Half BuyWrite Index measures the performance of a theoretical portfolio that holds a portfolio of the stocks included in the S&P 500 Index, and "writes" (or sells) a succession of one-month at-the-money covered call options on the S&P 500® Index. The written covered call options on the S&P 500® Index correspond to approximately 50% of the value of the portfolio of stocks in the S&P 500® Index. The written covered call options on the S&P 500® Index are held until expiration. The S&P 500® Index is a float-adjusted market capitalization weighted index which measures the performance of the equity securities of 500 industrial, information technology, utility and financial companies amongst other GICS® sectors, regarded as generally representative of the U.S. stock market. A float-adjusted market capitalization weighted index weights each index
35


component according to its market capitalization, using the number of shares that are readily available for purchase on the open market.

The Cboe S&P 500 Half BuyWrite Index is sponsored by S&P Dow Jones Indices LLC, which is an organization that is independent of the Fund and the Adviser.

Nasdaq CTA Emerging Markets Internet & E-commerce Net Total Return Index

The Nasdaq CTA Emerging Markets Internet & E-commerce Net Total Return Index is designed to provide exposure to exchange-listed companies that are expected to benefit from further adoption of internet and e-commerce technologies in emerging markets countries (collectively, "Emerging Markets Internet & E-commerce Companies"), as defined by Nasdaq, Inc., the provider of the Nasdaq CTA Emerging Markets Internet & E-commerce Net Total Return Index and the Consumer Technology Association (the “CTA”). Nasdaq, Inc. and the CTA have jointly developed the eligibility and selection criteria for the Nasdaq CTA Emerging Markets Internet & E-commerce Net Total Return Index. In order to be eligible for inclusion in the Nasdaq CTA Emerging Markets Internet & E-commerce Net Total Return Index, a company is considered by the CTA to be an Emerging Markets Internet & E-commerce Company if it derives at least 50% of its revenue, operating income, or assets from: (i) internet-related services (including social media and online entertainment), (ii) internet retail commerce, (iii) internet search engine services, and/or (iv) software delivered via the internet.

Nasdaq, Inc. classifies countries as being “emerging markets” by employing both a quantitative and qualitative review process. The quantitative criteria that Nasdaq, Inc. assesses include: (i) the Gross National Income (“GNI”) per capita, which measures a country’s income divided by its population, must be greater than $1,000 and less than $20,000 for three consecutive years; (ii) the aggregate market capitalization of index eligible companies listed in the country must be greater than $20 billion and less than $30 billion; (iii) the aggregate annual traded value of companies listed in the country; and (iv) the total number of index eligible securities listed in the country must be at least 5. In addition to the quantitative criteria, Nasdaq, Inc. applies a supplementary qualitative review of each country’s investability to confirm each country’s classification. The qualitative criteria that Nasdaq, Inc. assesses include: (i) restrictions that may be imposed on foreign investment; (ii) currency convertibility; and/or (iii) the ability for capital to move from one country to another country without restrictions. Additionally, Nasdaq, Inc. considers securities listed in Hong Kong (classified by Nasdaq, Inc. as a developed market) as eligible for inclusion in the Nasdaq CTA Emerging Markets Internet & E-commerce Net Total Return Index, to ensure representation in the Nasdaq CTA Emerging Markets Internet & E-commerce Net Total Return Index of companies incorporated or operating primarily in China.

The eligible universe of the Nasdaq CTA Emerging Markets Internet & E-commerce Net Total Return Index includes exchange-listed companies that meet minimum market capitalization and liquidity criteria, as defined by Nasdaq, Inc. As of December 31, 2021, companies must have a minimum free float market capitalization of $1 billion and a minimum average daily turnover for the last six months greater than or equal to $5 million in order to be eligible for inclusion in the Nasdaq CTA Emerging Markets Internet & E-commerce Net Total Return Index. As of December 31, 2021, companies listed in the following countries were eligible for inclusion in the Nasdaq CTA Emerging Markets Internet & E-commerce Net Total Return Index: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hong Kong, Hungary, India, Indonesia, Kuwait, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, South Korea, Taiwan, Thailand, Turkey, United Arab Emirates and the United States (as a function of emerging market exposure obtained through the use of ADRs). The Fund may have significant exposure to a particular foreign country or foreign currency.

The Nasdaq CTA Emerging Markets Internet & E-commerce Net Total Return Index is weighted according to a modified capitalization weighting methodology and is reconstituted and re-weighted semi-annually. Modified capitalization weighting seeks to weight constituents primarily based on market capitalization, but subject to caps on the weights of the individual securities. During each rebalance, the five largest securities by free float market capitalization are individually capped at a maximum weight of 8% and all other constituents are capped at a maximum weight of 4%. Generally speaking, this approach will limit the amount of concentration in the largest market capitalization companies and increase company-level diversification. The Nasdaq CTA Emerging Markets Internet & E-commerce Net Total Return Index may include large-, mid- or small-capitalization companies, and components primarily include communication services and consumer discretionary companies. As of December 31, 2021, the Nasdaq CTA Emerging Markets Internet & E-commerce Net Total Return Index had 43 constituents.

S&P U.S. Catholic Values Aggregate Bond Capped Index

The S&P U.S. Catholic Values Aggregate Bond Capped Index is designed to provide exposure to U.S. investment grade bonds while maintaining alignment with the moral and social teachings of the Catholic Church. The S&P U.S. Catholic Values
36


Aggregate Bond Capped Index includes investment grade U.S. Treasury bonds, U.S. government-related bonds, U.S. corporate bonds, and U.S. mortgage-backed securities. All corporate bonds included in the S&P U.S. Catholic Values Aggregate Bond Capped Index are investment grade bonds issued by constituents of the S&P 500 Index, and the issuers follow the eligibility criteria for that index. Investment grade corporate bonds are those rated BBB- or better by S&P Global Ratings, Baa3 or better by Moody's Investors Service, and BBB- or better by Fitch Ratings. From this starting universe, corporate bond issuers are screened to exclude companies involved in activities which are perceived to be inconsistent with Catholic values as outlined in the Socially Responsible Investment Guidelines of the United States Conference of Catholic Bishops ("USCCB"). The S&P U.S. Catholic Values Aggregate Bond Capped Index reweights the remaining corporate bonds so that the S&P U.S. Catholic Values Aggregate Bond Capped Index’s exposure to corporate bonds matches the aggregate exposure to corporate bonds of the S&P U.S. Aggregate Bond Index. The S&P U.S. Catholic Values Aggregate Bond Capped Index then reweights the sector exposure of the qualifying corporate bonds to match the sector exposure of corporate bonds of the S&P U.S. Aggregate Bond Index. The S&P U.S. Aggregate Bond Index is designed to measure the performance of publicly issued U.S. dollar denominated investment-grade debt and is weighted based on market value. The S&P U.S. Aggregate Bond Index includes U.S. treasuries, quasi-governments, corporates, taxable municipal bonds, foreign agency, supranational, federal agency, and non-U.S. debentures, covered bonds, and residential mortgage pass-throughs. The S&P U.S. Catholic Values Aggregate Bond Capped Index is sponsored by Standard & Poor’s Financial Services LLC, which is an organization that is independent of the Fund and the Adviser. Standard & Poor’s Financial Services LLC determines the relative weightings of the securities in the S&P U.S. Catholic Values Aggregate Bond Capped Index and publishes information regarding the market value of the S&P U.S. Catholic Values Aggregate Bond Capped Index. As of December 31, 2021, the S&P U.S. Catholic Values Aggregate Bond Capped Index had 6216 constituents.

Cboe S&P 500 Tail Risk Index

The Cboe S&P 500 Tail Risk Index measures the performance of a risk management strategy that holds the underlying stocks of the S&P 500® Index and applies a protective put strategy (i.e. long (purchased) put options) on the S&P 500® Index. The Cboe S&P 500 Tail Risk Index specifically reflects the performance of the component securities of the S&P 500® Index, combined with a long position in 10% out-of-the-money (“OTM”) put options that correspond to the value of the portfolio of stocks in the S&P 500® Index.

On a quarterly basis, the Cboe S&P 500 Tail Risk Index will take long positions in quarterly put options with an exercise price generally at 10% below the prevailing market price of the S&P 500® Index. However, if put options with that precise strike price are unavailable, the Cboe S&P 500 Tail Risk Index will instead select the put option with the strike price closest to but greater than 10% below the prevailing market price of the S&P 500® Index. Each option position will (i) be traded on a national securities exchange; (ii) be held until the expiration date; (iii) expire on its date of maturity (in the next calendar quarter); (iv) only be subject to exercise on its expiration date; and (v) be settled in cash.

The S&P 500® Index is a float-adjusted market capitalization weighted index containing equity securities of 500 industrial, information technology, utility and financial companies amongst other GICS® sectors, regarded as generally representative of the U.S. stock market. A float-adjusted market capitalization weighted index weights each index component according to its market capitalization, using the number of shares that are readily available for purchase on the open market.

Cboe S&P 500 Risk Managed Income Index

The Cboe S&P 500 Risk Managed Income Index measures the performance of a risk managed income strategy that holds the underlying stocks of the S&P 500® Index and applies an options collar strategy (i.e., a mix of short (sold) call options and long (purchased) put options) on the S&P 500® Index. The Cboe S&P 500 Risk Managed Income Index specifically reflects the performance of the component securities of the S&P 500® Index, combined with a long position in 5% out-of-the money (“OTM”) put options and a short position in at-the-money (“ATM”) call options, each corresponding to the value of the portfolio of stocks in the S&P 500® Index. The options collar seeks to generate a net-credit, meaning that the premium received from the sale of the call options will be greater than the premium paid when buying the put options.

On a monthly basis, the Cboe S&P 500 Risk Managed Income Index will take long positions in monthly put options with an exercise price generally at 5% below the prevailing market price of the S&P 500® Index and take short positions in monthly call options with an exercise price generally at the prevailing market price of the S&P 500® Index. However, if put and/or call options with those precise strike prices are unavailable, the Cboe S&P 500 Risk Managed Income Index will instead select the put option with the strike price closest to but greater than 5% below the prevailing market price of the S&P 500® Index, and call options with the strike price closest to but greater than the prevailing market price of the S&P 500® Index. Each option position will (i) be traded on a national securities exchange; (ii) be held until the expiration date; (iii) expire on its date of maturity (in the next calendar month); (iv) only be subject to exercise on its expiration date; and (v) be settled in cash.
37



The S&P 500® Index is a float-adjusted market capitalization weighted index containing equity securities of 500 industrial, information technology, utility and financial companies amongst other GICS® sectors, regarded as generally representative of the U.S. stock market. A float-adjusted market capitalization weighted index weights each index component according to its market capitalization, using the number of shares that are readily available for purchase on the open market.

Cboe S&P 500 3-Month Collar 95-110 Index

The Cboe S&P 500 3-Month Collar 95-110 Index measures the performance of a risk management strategy that holds the underlying stocks of the S&P 500® Index and applies an options collar strategy (i.e., a mix of short (sold) call options and long (purchased) put options) on the S&P 500® Index. The Cboe S&P 500 3-Month Collar 95-110 Index specifically reflects the performance of the component securities of the S&P 500® Index, combined with a long position in 5% out-of-the money (“OTM”) put options and a short position in 10% OTM call options, each corresponding to the value of the portfolio of stocks in the S&P 500® Index.

On a quarterly basis, the Cboe S&P 500 3-Month Collar 95-110 Index will take long positions in quarterly put options with an exercise price generally at 5% below the prevailing market price of the S&P 500® Index and take short positions in quarterly call options with an exercise price generally at 10% above the prevailing market price of the S&P 500® Index. However, if put and/or call options with those precise strike prices are unavailable, the Cboe S&P 500 3-Month Collar 95-110 Index will instead select the put option with the strike price closest to but greater than 5% below the prevailing market price of the S&P 500® Index, and call options with the strike price closest to but greater than 10% above the prevailing market price of the S&P 500® Index. Each option position will (i) be traded on a national securities exchange; (ii) be held until the expiration date; (iii) expire on its date of maturity (in the next calendar quarter); (iv) only be subject to exercise on its expiration date; and (v) be settled in cash.

The S&P 500® Index is a float-adjusted market capitalization weighted index containing equity securities of 500 industrial, information technology, utility and financial companies amongst other GICS® sectors, regarded as generally representative of the U.S. stock market. A float-adjusted market capitalization weighted index weights each index component according to its market capitalization, using the number of shares that are readily available for purchase on the open market.

Nasdaq-100 Quarterly Protective Put 90 Index

The Nasdaq-100 Quarterly Protective Put 90 Index measures the performance of a risk management strategy that holds the underlying stocks of the NASDAQ 100® Index and applies a protective put strategy (i.e. long (purchased) put options) on the NASDAQ 100® Index. The Nasdaq-100 Quarterly Protective Put 90 Index specifically reflects the performance of the component securities of the NASDAQ 100® Index, combined with a long position in 10% out-of-the-money (“OTM”) put options that correspond to the value of the portfolio of stocks in the NASDAQ 100® Index. On a quarterly basis, the Nasdaq-100 Quarterly Protective Put 90 Index will take long positions in quarterly put options with an exercise price generally at 10% below the prevailing market price of the NASDAQ 100® Index. However, if put options with that precise strike price are unavailable, the Nasdaq-100 Quarterly Protective Put 90 Index will instead select the put option with the strike price closest to but greater than 10% below the prevailing market price of the NASDAQ 100® Index. Each option position will (i) be traded on a national securities exchange; (ii) be held until the expiration date; (iii) expire on its date of maturity (in the next calendar quarter); (iv) only be subject to exercise on its expiration date; and (v) be settled in cash.

The NASDAQ 100® Index is a modified market capitalization weighted index containing equity securities of the 100 largest non-financial companies listed on the NASDAQ Stock Market. Modified capitalization weighting seeks to weight constituents primarily based on market capitalization, but subject to caps on the weights of the individual securities. Generally speaking, this approach will limit the amount of concentration in the largest market capitalization companies and increase company-level diversification.

The Underlying Index administered by Nasdaq, Inc. in conjunction with its third party contributor, Volos Portfolio Solutions, LLC., which are organizations that are independent of the Fund and Global X Management Company LLC, the investment adviser for the Fund ("Adviser"). Nasdaq determines the relative weightings of the securities in the Underlying Index and publishes information regarding the value of the Underlying Index.

Nasdaq-100 Monthly Net Credit Collar 95-100 Index

The Nasdaq-100 Monthly Net Credit Collar 95-100 Index measures the performance of a risk managed income strategy that holds the underlying stocks of the NASDAQ 100® Index and applies an options collar strategy (i.e., a mix of short (sold) call
38


options and long (purchased) put options) on the NASDAQ 100® Index. The Nasdaq-100 Monthly Net Credit Collar 95-100 Index specifically reflects the performance of the component securities of the NASDAQ 100® Index, combined with a long position in 5% out-of-the money (“OTM”) put options and a short position in at-the-money (“ATM”) call options, each corresponding to the value of the portfolio of stocks in the NASDAQ 100® Index. The options collar seeks to generate a net-credit, meaning that the premium received from the sale of the call options will be greater than the premium paid when buying the put options.

On a monthly basis, the Nasdaq-100 Monthly Net Credit Collar 95-100 Index will take long positions in monthly put options with an exercise price generally at 5% below the prevailing market price of the NASDAQ 100® Index and take short positions in monthly call options with an exercise price generally at the prevailing market price of the NASDAQ 100® Index. However, if put and/or call options with those precise strike prices are unavailable, the Nasdaq-100 Monthly Net Credit Collar 95-100 Index instead select the put option with the strike price closest to 5% below the prevailing market price of the NASDAQ 100® Index, and call options with the strike price closest to the prevailing market price of the NASDAQ 100® Index. Each option position will (i) be traded on a national securities exchange; (ii) be held until the expiration date; (iii) expire on its date of maturity (in the next calendar month); (iv) only be subject to exercise on its expiration date; and (v) be settled in cash.

The NASDAQ 100® Index is a modified market capitalization weighted index containing equity securities of the 100 largest non-financial companies listed on the NASDAQ Stock Market. Modified capitalization weighting seeks to weight constituents primarily based on market capitalization, but subject to caps on the weights of the individual securities. Generally speaking, this approach will limit the amount of concentration in the largest market capitalization companies and increase company-level diversification. The Fund's investment objective and Underlying Index may be changed without shareholder approval.

The Underlying Index administered by Nasdaq, Inc. in conjunction with its third party contributor, Volos Portfolio Solutions, LLC., which are organizations that are independent of the Fund and Global X Management Company LLC, the investment adviser for the Fund ("Adviser"). Nasdaq determines the relative weightings of the securities in the Underlying Index and publishes information regarding the value of the Underlying Index.

Nasdaq-100 Quarterly Collar 95-110 Index

The Nasdaq-100 Quarterly Collar 95-110 Index measures the performance of a risk management strategy that holds the underlying stocks of the NASDAQ 100® Index and applies an options collar strategy (i.e., a mix of short (sold) call options and long (purchased) put options) on the NASDAQ 100® Index. The Nasdaq-100 Quarterly Collar 95-110 Index specifically reflects the performance of the component securities of the NASDAQ 100® Index, combined with a long position in 5% out-of-the money (“OTM”) put options and a short position in 10% OTM call options, each corresponding to the value of the portfolio of stocks in the NASDAQ 100® Index.

On a quarterly basis, the Nasdaq-100 Quarterly Collar 95-110 Index will take long positions in quarterly put options with an exercise price generally at 5% below the prevailing market price of the NASDAQ 100® Index and take short positions in quarterly call options with an exercise price generally at 10% above the prevailing market price of the NASDAQ 100® Index. However, if put and/or call options with those precise strike prices are unavailable, the Nasdaq-100 Quarterly Collar 95-110 Index will instead select the put option with the strike price closest to 5% below the prevailing market price of the NASDAQ ® Index, and call options with the strike price closest to 10% above the prevailing market price of the NASDAQ 100® Index. Each option position will (i) be traded on a national securities exchange; (ii) be held until the expiration date; (iii) expire on its date of maturity (in the next calendar quarter); (iv) only be subject to exercise on its expiration date; and (v) be settled in cash.

The NASDAQ 100® Index is a modified market capitalization weighted index containing equity securities of the 100 largest non-financial companies listed on the NASDAQ Stock Market. Modified capitalization weighting seeks to weight constituents primarily based on market capitalization, but subject to caps on the weights of the individual securities. Generally speaking, this approach will limit the amount of concentration in the largest market capitalization companies and increase company-level diversification.

The Underlying Index administered by Nasdaq, Inc. in conjunction with its third party contributor, Volos Portfolio Solutions, LLC., which are organizations that are independent of the Fund and Global X Management Company LLC, the investment adviser for the Fund ("Adviser"). Nasdaq determines the relative weightings of the securities in the Underlying Index and publishes information regarding the value of the Underlying Index.

Solactive Disruptive Materials Index

39


The Solactive Disruptive Materials Index is designed to provide exposure to companies that produce metals and other raw or composite materials that have been identified as being essential to disruptive technologies such as lithium batteries, solar panels, wind turbines, fuel cells, robotics, and 3D printers. Each material has been determined by Solactive AG, the provider of the Solactive Disruptive Materials Index to be instrumental to the development and materialization of one or more disruptive technologies. Disruptive technologies refer to those technologies that are essential to the development and materialization of long-term, structural changes to existing products, services, industries, or sectors. Specifically, the Solactive Disruptive Materials Index will include securities issued by “Disruptive Materials Companies” as defined by Solactive AG. Disruptive Materials Companies are those companies that derive at least 50% of their revenues in aggregate from the exploration, mining, production and/or enhancement of one or more of the following ten materials categories: Carbon Fiber, Cobalt, Copper, Graphene & Graphite, Lithium, Manganese, Nickel, Platinum & Palladium, Rare Earth Elements, and Zinc (collectively, “Disruptive Materials Categories”). Companies engaged in exploration and mining include those companies involved in locating and extracting disruptive materials. Companies engaged in production include those companies involved in manufacturing, processing, and trading disruptive materials for primary usage. Companies engaged in enhancement include those companies involved in refining, developing, and/or smelting materials to extract and purify disruptive materials. As of January 1, 2022, the Solactive Disruptive Materials Index had 50 constituents.

For the Lithium category, companies that derive greater than 25% but less than 50% of revenue from the production and/or processing of lithium are also eligible for inclusion (collectively, “Diversified Lithium Companies”). In addition, companies with primary business operations in the exploration, mining, production and/or enhancement of one or more of the Disruptive Materials Categories, but which are not currently generating revenue, are also eligible for inclusion (collectively, “Pre-Revenue Disruptive Materials Companies”). To determine whether a company has primary business operations in the exploration, mining, production and/or enhancement of one or more of the Disruptive Materials Categories, Solactive AG reviews the public financial disclosures and filings of the company, and identifies the products and business segments disclosed therein. Solactive AG then reviews the management discussion and analysis, as well as the level of investment the company allocates to those products and segments, to determine whether those business operations are the primary operations of the company.

In constructing the Solactive Disruptive Materials Index, Solactive AG applies a proprietary natural language processing algorithm to the eligible universe, which seeks to identify and rank companies involved in each of the Disruptive Materials Categories based on filings, disclosures, and other public information (e.g., regulatory filings, earnings transcripts, etc.). The highest-ranking companies identified by the natural language processing algorithm in each Disruptive Materials Category, as of the selection date, are further reviewed by Solactive AG to confirm they derive at least 50% of their revenues from one of the Disruptive Materials Categories as described above, derive between 25% and 50% of their revenues from the Lithium category in the case of Diversified Lithium Companies, or have primary business operations in the exploration, mining, production and/or enhancement of one or more of the Disruptive Materials Categories but do not currently generate revenues in the case of Pre-Revenue Disruptive Materials Companies. The five highest-ranking Disruptive Materials Companies and Pre-Revenue Disruptive Materials Companies according to free float market capitalization from each Disruptive Materials Category are included in the Solactive Disruptive Materials Index. For the Lithium category, the five highest-ranking Disruptive Materials Companies, Pre-Revenue Disruptive Materials Companies and Diversified Lithium Companies according to free float market capitalization are included. If fewer than five companies are identified that satisfy the above criteria within a Disruptive Materials Category, all eligible companies are selected, and the category consists of fewer than five companies.

To be a part of the eligible universe of the Solactive Disruptive Materials Index, companies must be classified in one of the following Economies according to FactSet (a leading financial data provider that maintains a comprehensive structured taxonomy designed to offer precise classification of global companies and their individual business units): Basic Materials, Industrials, or Technology. In addition, certain minimum market capitalization and liquidity criteria, as defined by Solactive AG, must be met. As of January 1, 2022, companies must have a minimum market capitalization of $100 million and a minimum average daily turnover for the last 6 months greater than or equal to $1 million in order to be eligible for inclusion in the Solactive Disruptive Materials Index. As of January 1, 2022, companies listed in the following countries were eligible for inclusion in the Solactive Disruptive Materials Index: Australia, Argentina, Austria, Belgium, Brazil, Canada, Chile, China, Colombia, Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Hong Kong, Hungary, Indonesia, Ireland, Israel, Italy, Japan, Kuwait, Malaysia, Mexico, Netherlands, New Zealand, Norway, Pakistan, Peru, Philippines, Poland, Portugal, Qatar, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, United Kingdom, United States, and the United Arab Emirates. As of January 1, 2022, the Solactive Disruptive Materials Index had significant exposure to Chinese issuers. The Fund may invest in China A-Shares, which are issued by companies incorporated in mainland China and traded on Chinese exchanges. The Fund may invest in securities of issuers located in emerging markets.

The Solactive Disruptive Materials Index is weighted according to a modified capitalization weighting methodology and is reconstituted and re-weighted semi-annually. Modified capitalization weighting seeks to weight constituents primarily based on
40


market capitalization, but subject to caps on the weights of the individual securities. During each rebalance, the maximum weight of a company is capped at 4%, and all constituents are subject to a minimum weight of 0.3%. In addition, Diversified Lithium Companies and Pre-Revenue Disruptive Materials Companies are subject to an aggregate weight cap of 10% at each semi-annual rebalance. Generally speaking, modified capitalization weighting will limit the amount of concentration in the largest market capitalization companies and increase company-level diversification. The Solactive Disruptive Materials Index may include large-, mid-, small-, or micro-capitalization companies, and components primarily include materials companies.

Disclaimers
 
Indxx is a service mark of Indxx and has been licensed for use for certain purposes by the Adviser. The Funds are not sponsored, endorsed, sold or promoted by Indxx. Indxx makes no representation or warranty, express or implied, to the owners of the Funds or any member of the public regarding the advisability of investing in securities generally or in the Funds particularly. Indxx has no obligation to take the needs of the Adviser or the shareholders of the Funds into consideration in determining, composing or calculating the Underlying Indices. Indxx is not responsible for and has not participated in the determination of the timing, amount or pricing of the Fund Shares to be issued or in the determination or calculation of the equation by which the Fund Shares are to be converted into cash. Indxx has no obligation or liability in connection with the administration, marketing or trading of the Funds.

Solactive AG is a leading company in the structuring and indexing business for institutional clients. Solactive AG runs the Solactive index platform. Solactive indices are used by issuers worldwide as underlying indices for financial products. Solactive AG does not sponsor, endorse or promote any Funds and is not in any way connected to them and does not accept any liability in relation to their issue, operation and trading.
 
Standard & Poor's®, S&P® and S&P 500 Stock Covered Call™ are registered trademarks of Standard & Poor's Financial Services LLC ("S&P") and have been licensed for use by the Adviser. Each of the Global X SuperIncome™ Preferred ETF, Global X S&P 500® Catholic Values ETF, Global X S&P 500® Covered Call ETF, Global X S&P Catholic Values Developed ex-U.S. ETF, Global X S&P 500® Covered Call & Growth ETF, Global X S&P 500® Tail Risk ETF, Global X S&P 500® Risk Managed Income ETF, Global X S&P 500® Collar 95-110 ETF and Global X S&P Catholic Values U.S. Aggregate Bond ETF ("ETF") is not sponsored, endorsed, sold or promoted by Standard & Poor's and its affiliates ("S&P"). S&P makes no representation, condition or warranty, express or implied, to the owners of the ETF or any member of the public regarding the advisability of investing in securities generally or in the ETF particularly or the ability of the S&P Enhanced Yield North American Preferred Stock Index, S&P 500® Catholic Values Index, S&P 500 Stock Covered Call Index, S&P Developed ex-U.S. Catholic Values Index and S&P U.S. Catholic Values Aggregate Bond Capped Index (an "Index") to track the performance of certain financial markets and/or sections thereof and/or of groups of assets or asset classes. S&P's only relationship to the Adviser is the licensing of certain trademarks and trade names and of the index which is determined, composed and calculated by S&P without regard to the Adviser or the ETF. S&P has no obligation to take the needs of Global X Management Company, LLC or the owners of the ETF into consideration in determining, composing or calculating the index. S&P is not responsible for and has not participated in the determination of the prices and amount of the ETF or the timing of the issuance or sale of the ETF or in the determination or calculation of the equation by which the ETF units are to be converted into cash. S&P has no obligation or liability in connection with the administration, marketing, or trading of the ETF.

Neither S&P, its affiliates nor third party licensors, guarantees the accuracy and/or the completeness of the index or any data included therein and S&P, its affiliates and their third party licensors, shall have no liability for any errors, omissions, or interruptions therein. S&P, its affiliates and third party licensors make no warranty, condition or representation, express or implied, as to the results to be obtained by to Adviser, owners of the ETF, or any other person or entity from the use of the index or any data included therein. S&P makes no express or implied warranties, representations or conditions, and expressly disclaims all warranties or conditions of merchantability or fitness for a particular purpose or use and any other express or implied warranty or condition with respect to the index or any data included therein. Without limiting any of the foregoing, in no event shall S&P, its affiliates or their third party licensors, have any liability for any special, punitive, indirect, or consequential damages (including lost profits) resulting from the use of the index or any data included therein, even if notified of the possibility of such damages.

FTSE is a world-leader in the creation and management of over 100,000 equity, bond and hedge fund indices. With offices in Beijing, London, Frankfurt, Hong Kong, Boston, Shanghai, Madrid, Paris, New York, San Francisco, Sydney and Tokyo, FTSE Group services clients in 77 countries worldwide. FTSE is an independent company owned by the Financial Times and the London Stock Exchange. FTSE does not give financial advice to clients, which allows for the provision of truly objective market information. FTSE indices are used extensively by investors world-wide such as consultants, asset owners, asset managers, investment banks, stock exchanges and brokers.

41


NO FUND IS SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI INC. ("MSCI"), ANY OF ITS AFFILIATES, ANY OF ITS INFORMATION PROVIDERS OR ANY OTHER THIRD PARTY INVOLVED IN, OR RELATED TO, COMPILING, COMPUTING OR CREATING ANY MSCI INDEX (COLLECTIVELY, THE ''MSCI PARTIES"). THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES ARE SERVICE MARK (S) OF MSCI OR ITS AFFILIATES AND HAVE BEEN LICENSED FOR USE FOR CERTAIN PURPOSES BY THE ADVISER. NONE OF THE MSCI PARTIES MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE ISSUER OR OWNERS OF THIS FUND OR ANY OTHER PERSON OR ENTITY REGARDING THE ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND PARTICULARLY OR THE ABILITY OF ANY MSCI INDEX TO TRACK CORRESPONDING STOCK MARKET PERFORMANCE. MSCI OR ITS AFFILIATES ARE THE LICENSORS OF CERTAIN TRADEMARKS, SERVICE MARKS AND TRADE NAMES AND OF THE MSCI INDEXES WHICH ARE DETERMINED, COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THIS FUND OR THE ISSUER OR OWNERS OF THIS FUND OR ANY OTHER PERSON OR ENTITY. NONE OF THE MSCI PARTIES HAS ANY OBLIGATION TO TAKE THE NEEDS OF THE ISSUER OR OWNERS OF THIS FUND OR ANY OTHER PERSON OR ENTITY INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE MSCI INDEXES. NONE OF THE MSCI PARTIES IS RESPONSIBLE FOR OR HAS PARTICIPATED IN THE DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THIS FUND TO BE ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY OR THE CONSIDERATION INTO WHICH THIS FUND IS REDEEMABLE. FURTHER, NONE OF THE MSCI PARTIES HAS ANY OBLIGATION OR LIABILITY TO THE ISSUER OR OWNERS OF THIS FUND OR ANY OTHER PERSON OR ENTITY IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR OFFERING OF THIS FUND. ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE CALCULATION OF THE MSCI INDEXES FROM SOURCES THAT MSCI CONSIDERS RELIABLE, NONE OF THE MSCI PARTIES WARRANTS OR GUARANTEES THE ORIGINALITY, ACCURACY AND/OR THE COMPLETENESS OF ANY MSCI INDEX OR ANY DATA INCLUDED THEREIN. NONE OF THE MSCI PARTIES MAKES ANY WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE ISSUER OF THE FUND. OWNERS OF THE FUND, OR ANY OTHER PERSON OR ENTITY, FROM THE USE OF ANY MSCI INDEX OR ANY DATA INCLUDED THEREIN. NONE OF THE MSCI PARTIES SHALL HAVE ANY LIABILITY FOR ANY ERRORS, OMISSIONS OR INTERRUPTIONS OF OR IN CONNECTION WITH ANY MSCI INDEX OR ANY DATA INCLUDED THEREIN. FURTHER, NONE OF THE MSCI PARTIES MAKES ANY EXPRESS OR IMPLIED WARRANTIES OF ANY KIND. AND THE MSCI PARTIES HEREBY EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO EACH MSCI INDEX AND ANY DATA INCLUDED THERE IN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL ANY OF THE MSCI PARTIES HAVE ANY LIAB I LITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

No purchaser, seller or holder of this Fund, or any other person or entity, should use or refer to any MSCI trade name, trademark or service mark to sponsor, endorse, market or promote this Fund without first contacting MSCI to determine whether MSCI's permission is required. Under no circumstances may any person or entity claim any affiliation with MSCI without the prior written permission of MSCI.

The Adviser has entered into a license agreement with Qontigo Index GmbH ("Qontigo") to use the DAX Index. The Global X DAX Germany ETF is permitted to use the DAX Index pursuant to a sublicense agreement with the Adviser. This financial instrument is neither sponsored nor promoted, distributed or in any other manner supported by Qontigo. Qontigo does not give any explicit or implicit warranty or representation, neither regarding the results deriving from the use of the DAX Index and/or the DAX Index Trademark nor regarding the DAX Index value at a certain point in time or on a certain date nor in any other respect. The DAX Index is calculated and published by Qontigo. Nevertheless, as far as admissible under statutory law Qontigo will not be liable vis-à-vis third parties for potential errors in the DAX Index. Moreover, there is no obligation for Qontigo vis-à-vis third parties, including investors, to point out potential errors in the DAX Index. Neither the publication of the DAX Index by Qontigo nor the granting of a license regarding the DAX Index as well as the DAX Index Trademark for the utilization in connection with the financial instrument or other securities or financial products, which derived from the DAX Index, represents a recommendation by Qontigo for a capital investment or contains in any manner a warranty or opinion by Qontigo with respect to the attractiveness on an investment in this product. In its capacity as sole owner of all rights to the DAX Index and the DAX Index Trademark Qontigo has solely licensed to the issuer of the financial instrument the utilization of the DAX Index and the DAX Index Trademark as well as any reference to the DAX Index and the DAX Index Trademark in connection with the financial instrument.

"CBOE®" is a registered trademark of Chicago Board Options Exchange, Incorporated ("CBOE"). NASDAQ®, NASDAQ-100® and NASDAQ-100 Index® are registered trademarks of Nasdaq, Inc. ("NASDAQ"). NASDAQ has granted the Adviser ("Licensee") a license to use the BXNT Index for purposes of Licensee's Global X NASDAQ 100® Covered Call ETF, the Cboe
42


Nasdaq 100 Half BuyWrite V2 Index for purposes of Licensee's Global X Nasdaq 100® Covered Call & Growth ETF, and the NASDAQ Emerging Markets Internet & E-commerce Index for purposes of Licensee's Global X Emerging Markets Internet & E-commerce ETF. The Global X NASDAQ 100® Covered Call ETF, the Global X Nasdaq 100® Covered Call & Growth ETF, and the Global X Emerging Markets Internet & E-commerce ETF are not sponsored, endorsed, sold or promoted by NASDAQ, CBOE or their affiliates (NASDAQ and CBOE, collectively with their affiliates, are referred to as the "Corporations"). The Corporations have not passed on the legality or suitability of, or the accuracy or adequacy of descriptions and disclosures relating to, the Global X NASDAQ 100® Covered Call ETF, the Global X Nasdaq 100® Covered Call & Growth ETF, and the Global X Emerging Markets Internet & E-commerce ETF. The Corporations make no representation or warranty, express or implied to the owners of the Global X NASDAQ 100® Covered Call ETF, the Global X Nasdaq 100® Covered Call & Growth ETF, the Global X Emerging Markets Internet & E-commerce ETF or any member of the public regarding the advisability of investing in securities generally or in the Global X NASDAQ 100® Covered Call ETF, the Global X Nasdaq 100® Covered Call & Growth ETF, or the Global X Emerging Markets Internet & E-commerce ETF particularly, or the ability of the BXNT Index, the Cboe Nasdaq 100 Half BuyWrite V2 Index, or the NASDAQ Emerging Markets Internet & E-commerce Index to track general stock market performance. The Corporations' only relationship to Global X Management Company LLC (the "Licensee") is in the licensing of the Nasdaq®, CBOE®, NASDAQ-100® and NASDAQ-100 Index® and certain trade names of the Corporations and the use of the BXNT Index, the Cboe Nasdaq 100 Half BuyWrite V2 Index, and the NASDAQ Emerging Markets Internet & E-commerce Index which is determined, composed and calculated by the Corporations without regard to Licensee or the Global X NASDAQ 100® Covered Call ETF, the Global X Nasdaq 100® Covered Call & Growth ETF, or the Global X Emerging Markets Internet & E-commerce ETF. The Corporations have no obligation to take the needs of the Licensee or the owners of the Global X NASDAQ 100® Covered Call ETF, the Global X Nasdaq 100® Covered Call & Growth ETF, or the Global X Emerging Markets Internet & E-commerce ETF into consideration in determining, composing or calculating the BXNT Index, the Cboe Nasdaq 100 Half BuyWrite V2 Index, or the NASDAQ Emerging Markets Internet & E-commerce Index. The Corporations are not responsible for and have not participated in the determination of the timing of, prices at, or quantities of the Global X NASDAQ 100® Covered Call ETF, the Global X Nasdaq 100® Covered Call & Growth ETF, or the Global X Emerging Markets Internet & E-commerce ETF to be issued or in the determination or calculation of the equation by which the Global X NASDAQ 100® Covered Call ETF, the Global X Nasdaq 100® Covered Call & Growth ETF, or the Global X Emerging Markets Internet & E-commerce ETF is to be converted into cash. The Corporations have no liability in connection with the administration, marketing or trading of the Global X NASDAQ 100® Covered Call ETF, the Global X Nasdaq 100® Covered Call & Growth ETF, or the Global X Emerging Markets Internet & E-commerce ETF.

THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED CALCULATION OF THE CBOE NASDAQ 100 BXNT INDEX, THE CBOE NASDAQ 100 HALF BUYWRITE V2 INDEX OR THE NASDAQ EMERGING MARKETS INTERNET & E-COMMERCE INDEX OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE GLOBAL X NASDAQ 100® COVERED CALL ETF, THE GLOBAL X NASDAQ 100® COVERED CALL & GROWTH ETF, OR THE GLOBAL X EMERGING MARKETS INTERNET & E-COMMERCE ETF OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE BXNT INDEX, THE CBOE NASDAQ 100 HALF BUYWRITE V2 INDEX, THE NASDAQ EMERGING MARKETS INTERNET & E-COMMERCE INDEX OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE BXNT INDEX, THE CBOE NASDAQ 100 HALF BUYWRITE V2 INDEX, THE NASDAQ EMERGING MARKETS INTERNET & E-COMMERCE INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL THE CORPORATIONS HAVE ANY LIABILITY FOR ANY LOST PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

INVESTMENT RESTRICTIONS
 
Each Fund is subject to the investment policies enumerated in this section, which may be changed with respect to a particular Fund only by a vote of the holders of a majority of such Fund's outstanding Shares, which is defined by the 1940 Act as: (i) more than 50% of the Fund's outstanding shares; or (ii) 67% or more of the Fund's shares present at a shareholder meeting if more than 50% of the Fund's outstanding shares are represented at the meeting in person or by proxy, whichever is less.

The Funds:

1.May not issue any senior security, except as permitted under the 1940 Act, and as interpreted or modified by regulatory authority having jurisdiction, from time to time;

43


2.May not borrow money, except as permitted under the 1940 Act, and as interpreted or modified by regulatory authority having jurisdiction, from time to time;

3.May not act as an underwriter of securities within the meaning of the Securities Act, except as permitted under the Securities Act, and as interpreted or modified by regulatory authority having jurisdiction, from time to time. Among other things, to the extent that a Fund may be deemed to be an underwriter within the meaning of the Securities Act, this would permit the Fund to act as an underwriter of securities in connection with the purchase and sale of its portfolio securities in the ordinary course of pursuing its investment objective, investment policies and investment program;

4.May not purchase or sell real estate or any interests therein, except as permitted under the 1940 Act, and as interpreted or modified by regulatory authority having jurisdiction, from time to time. Notwithstanding this limitation, a Fund may, among other things: (i) acquire or lease office space for its own use; (ii) invest in securities of issuers that invest in real estate or interests therein; (iii) invest in mortgage-related securities and other securities that are secured by real estate or interests therein; or (iv) hold and sell real estate acquired by the Fund as a result of the ownership of securities;

5.May not purchase physical commodities or contracts relating to physical commodities, except as permitted under the 1940 Act, and as interpreted or modified by regulatory authority having jurisdiction, from time to time;

6.May not make loans, except as permitted under the 1940 Act, and as interpreted or modified by regulatory authority having jurisdiction, from time to time; and

7.May not "concentrate" its investments in a particular industry or group of industries: (I) except that a Fund will concentrate to approximately the same extent that its Underlying Index concentrates in the securities of such particular industry or group of industries; and (II) except as permitted under the 1940 Act, and as interpreted or modified by regulatory authority having jurisdiction from time to time, provided that, without limiting the generality of the foregoing: (a) this limitation will not apply to a Fund's investments in: (i) securities of other investment companies; (ii) securities issued or guaranteed as to principal and/or interest by the U.S. government, its agencies or instrumentalities; (iii) repurchase agreements (collateralized by the instruments described in clause (ii)) or (iv) securities of state or municipal governments and their political subdivisions are not considered to be issued by members of any industry; (b) wholly owned finance companies will be considered to be in the industries of their parents if their activities are primarily related to the financing activities of the parents; and (c) utilities will be divided according to their services, for example, gas, gas transmission, electric and gas, electric and telephone will each be considered a separate industry.

Notwithstanding these fundamental investment restrictions, each Fund may purchase securities of other investment companies to the full extent permitted under Section 12 or any other provision of the 1940 Act (or any successor provision thereto) or under any regulation or order of the SEC.

If a percentage limitation is satisfied at the time of investment, a later increase or decrease in such percentage resulting from a change in the value of a Fund's investments will not constitute a violation of such limitation, except that any borrowing by the Fund that exceeds the fundamental investment limitations stated above must be reduced to meet such limitations within the period required by the 1940 Act (currently three days). In addition, if a Fund's holdings of illiquid securities exceed 15% of net assets because of changes in the value of the Fund's investments, the Fund will act in accordance with Rule 22e-4 under the 1940 Act and will take action to reduce its holdings of illiquid securities within a time frame deemed to be in the best interest of the Fund. Otherwise, a Fund may continue to hold a security even though it causes the Fund to exceed a percentage limitation because of fluctuation in the value of the Fund's assets.
 
Any investment restriction which involves a maximum percentage (other than the restriction set forth above in investment restriction No. 2) will not be considered violated unless an excess over the percentage occurs immediately after, and is caused by, an acquisition or encumbrance of securities or assets of a Fund. The 1940 Act requires that if the asset coverage for borrowings at any time falls below the limits under the 1940 Act described in investment restriction No. 2, a Fund will, within three days thereafter (not including Sundays and holidays), reduce the amount of its borrowings to an extent that the net asset coverage of such borrowings shall conform to such limits.
 

CURRENT 1940 ACT LIMITATIONS
 
BORROWING. Investment companies generally may not borrow money, except that an investment company may borrow
44


money in an amount not exceeding 33 1/3% of its total assets (including the amount borrowed) less liabilities (other than borrowings).

UNDERWRITING. Investment companies generally may not act as an underwriter of another issuer's securities, except to the extent that an investment company may be deemed to be an underwriter within the meaning of the Securities Act in connection with the purchase or sale of portfolio securities.

REAL ESTATE. Investment companies generally may not purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but investment companies may purchase or sell securities or other instruments backed by real estate or of issuers engaged in real estate activities).
 
LOANS. Investment companies generally may not lend any security or make any other loan if, as a result, more than 33 1/3% of its total assets would be lent to other parties, but this limitation does not apply to purchases of debt securities or to repurchase agreements, or to acquisitions of loans, loan participations or other forms of debt instruments.

PHYSICAL COMMODITIES. Investment companies generally may not purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments (but investment companies may purchase or sell options, futures contracts or other derivative instruments, and invest in securities or other instruments backed by physical commodities).
 
CONCENTRATION. For purposes of calculating concentration percentages, investment companies investing in (a) affiliated investment companies are required to look through to the holdings of the affiliated investment companies and include the holdings in calculations of concentration percentages, and (ii) unaffiliated investment companies are required to include the holdings of the unaffiliated investment companies to the extent that they are concentrated in calculations of concentration percentages. In addition, revenue bonds are characterized by the industry in which the revenue is used.

CONTINUOUS OFFERING
 
The method by which Creation Unit Aggregations of Shares are created and traded may raise certain issues under applicable securities laws. Because new Creation Unit Aggregations of Shares are issued and sold by the Funds on an ongoing basis, at any point a "distribution," as such term is used in the Securities Act, may occur. Broker-dealers and other persons are cautioned that some activities on their part may, depending on the circumstances, result in their being deemed participants in a distribution in a manner which could render them statutory underwriters and subject them to the prospectus delivery requirement and liability provisions of the Securities Act.

For example, a broker-dealer firm or its client may be deemed a statutory underwriter if it takes Creation Unit Aggregations after placing an order with the Distributor, breaks them down into constituent shares, and sells such shares directly to customers, or if it chooses to couple the creation of a supply of new shares with an active selling effort involving solicitation of secondary market demand for shares. A determination of whether one is an underwriter for purposes of the Securities Act must take into account all the facts and circumstances pertaining to the activities of the broker-dealer or its client in the particular case, and the examples mentioned above should not be considered a complete description of all the activities that could lead to a categorization as an underwriter. Broker-dealer firms should also note that dealers who are not "underwriters" but are effecting transactions in shares, whether or not participating in the distribution of shares, generally are required to deliver a prospectus. This is because the prospectus delivery exemption in Section 4(a)(3) of the Securities Act is not available in respect of such transactions as a result of Section 24(d) of the 1940 Act. Firms that incur a prospectus delivery obligation with respect to shares of the Funds are reminded that, pursuant to Rule 153 under the Securities Act, a prospectus delivery obligation under Section 5(b)(2) of the Securities Act owed to an exchange member in connection with a sale on the Exchange is satisfied by the fact that the prospectus is available at the Exchange upon request. The prospectus delivery mechanism provided in Rule 153 is only available with respect to transactions on an exchange.

The Adviser or its affiliates (each, as applicable, a “Selling Shareholder”) may purchase Creation Unit Aggregations through a broker-dealer to “seed” (in whole or in part) Funds as they are launched or thereafter, or may purchase shares from broker-dealers or other investors that have previously provided “seed” for Funds when they were launched or otherwise in secondary market transactions, and because the Selling Shareholder may be deemed an affiliate of such Funds, the shares are being registered to permit the resale of these shares from time to time after purchase. The Fund will not receive any of the proceeds from the resale by the Selling Shareholders of these shares. 

The Selling Shareholder intends to sell all or a portion of the shares owned by it and offered hereby from time to time directly or through one or more broker-dealers, and may also hedge such positions.  The shares may be sold on any national securities exchange on which the shares may be listed or quoted at the time of sale, in the over-the-counter market or in transactions other
45


than on these exchanges or systems at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions.  The Selling Shareholder may use any one or more of the following methods when selling shares:

ordinary brokerage transactions through brokers or dealers (who may act as agents or principals) or directly to one or more purchasers;
privately negotiated transactions;
through the writing or settlement of options or other hedging transactions, whether such options are listed on an options exchange or otherwise; and
any other method permitted pursuant to applicable law.

The Selling Shareholder may also loan or pledge shares to broker-dealers that in turn may sell such shares, to the extent permitted by applicable law. The Selling Shareholder may also enter into options or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares, which shares such broker-dealer or other financial institution may resell. 

The Selling Shareholder and any broker-dealer or agents participating in the distribution of shares may be deemed to be “underwriters” within the meaning of Section 2(11) of the Securities Act in connection with such sales.  In such event, any commissions paid to any such broker-dealer or agent and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. The Selling Shareholder who may be deemed an "underwriter" within the meaning of Section 2(11) of the Securities Act will be subject to the applicable prospectus delivery requirements of the Securities Act.

The Selling Shareholder has informed the Fund that it is not a registered broker-dealer and does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the shares.  Upon the Fund being notified in writing by the Selling Shareholder that any material arrangement has been entered into with a broker-dealer for the sale of shares through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this SAI will be filed, if required, pursuant to Rule 497 under the Securities Act, disclosing (i) the name of each Selling Shareholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such shares were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in the Fund’s Prospectus and SAI, and (vi) other facts material to the transaction. 

The Selling Shareholder and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares by the Selling Shareholder and any other participating person.  To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the shares to engage in market-making activities with respect to the shares.  All of the foregoing may affect the marketability of the shares and the ability of any person or entity to engage in market-making activities with respect to the shares.  There is a risk that the Selling Shareholder may redeem its investments in the Fund or otherwise sell its shares to a third party that may redeem. As with redemptions by other large shareholders, such redemptions could have a significant negative impact on the Fund.

PORTFOLIO HOLDINGS
 
Policy on Disclosure of Portfolio Holdings
 
The Board of Trustees of the Trust has adopted a policy on disclosure of portfolio holdings, which it believes is in the best interests of the Funds' shareholders. The policy is designed to: (i) protect the confidentiality of the Funds' non-public portfolio holdings information, (ii) prevent the selective disclosure of such information, and (iii) ensure compliance by the Adviser and the Funds with the federal securities laws, including the 1940 Act and the rules promulgated thereunder and general principles of fiduciary duty. The Funds' portfolio holdings, or information derived from the Funds' portfolio holdings, may, in the Adviser's discretion, be made available to third parties if (i) such disclosure has been included in a Fund's public filings with the SEC or is disclosed on the Fund's publicly accessible Website, (ii) such disclosure is determined by the Chief Compliance Officer ("CCO") to be in the best interests of Fund shareholders and consistent with applicable law; (iii) such disclosure is made equally available to anyone requesting it; and (iv) the Adviser determines that the disclosure does not present the risk of such information being used to trade against the Funds.
 
46


Each business day, portfolio holdings information will be provided to the Transfer Agent or other agent for dissemination through the facilities of the National Securities Clearing Corporation ("NSCC") and/or other fee based subscription services to NSCC members and/or subscribers to those other fee based subscription services, including Authorized Participants (defined below), and to entities that publish and/or analyze such information in connection with the process of purchasing or redeeming Creation Units or trading Shares of the Funds in the secondary market. Information with respect to each Fund's portfolio holdings is also disseminated daily on the Fund's Website.
 
The Distributor may also make available portfolio holdings information to other institutional market participants and entities that provide information services. This information typically reflects each Fund's anticipated holdings on the following business day. "Authorized Participants" are generally large institutional investors that have been authorized by the Distributor to purchase and redeem large blocks of Shares (known as Creation Units) pursuant to legal requirements pursuant to which the Funds offer and redeem Shares ("Global X Order"). Other than portfolio holdings information made available in connection with the creation/redemption process, as discussed above, portfolio holdings information that is not filed with the SEC or posted on the publicly available Website may be provided to third parties only in limited circumstances, as described above.
 
Disclosure to providers of auditing, custody, proxy voting and other similar services for the Funds, as well as rating and ranking organizations, will generally be permitted; however, information may be disclosed to other third parties (including, without limitation, individuals, institutional investors, and Authorized Participants that sell Shares of a Fund) only upon approval by the CCO. The recipients who may receive non-public portfolio holdings information are as follows: the Adviser and its affiliates, the Funds' independent registered public accounting firm, the Distributor, administrator and custodian, the Funds' legal counsel, the Funds' financial printer and the Funds' proxy voting service. These entities are obligated to keep such information confidential. Third-party providers of custodial or accounting services to a Fund may release non-public portfolio holdings information of a Fund only with the permission of the CCO.
 
Portfolio holdings will be disclosed through required filings with the SEC. Each Fund files its portfolio holdings with the SEC for each fiscal quarter on Form N-CSR (with respect to each annual period and semiannual period) and Form N-PORT (with respect to the first and third quarters of the Fund's fiscal year). Shareholders may obtain a Fund's Forms N-CSR and N-PORT filings on the SEC's Website at sec.gov. In addition, the Funds' Forms N-CSR and N-PORT filings may be reviewed and copied at the SEC's public reference room in Washington, DC. You may call the SEC at 1-800-SEC-0330 for information about the SEC's Website or the operation of the public reference room.
 
Under the policy on disclosure of portfolio holdings, the Board of Trustees is to receive information, on a quarterly basis, regarding any other disclosures of non-public portfolio holdings information that were permitted during the preceding quarter.

MANAGEMENT OF THE TRUST
 
BOARD OF TRUSTEES AND OFFICERS
 
The business and affairs of the Trust are overseen by the Board of Trustees ("Board"). Subject to the provisions of the Trust's Declaration of Trust and By-Laws and Delaware law, the Board has all powers necessary and convenient to carry out this general oversight responsibility, including the power to elect and remove the Trust's officers. The focus of the Board's oversight of the business and affairs of the Trust (and each of the Funds) is to protect the interests of the shareholders in the Funds.
 
The Board appoints and oversees the Trust's officers and service providers. The Adviser is responsible for the day-to-day management and operations of the Trust and each of the Funds, based on each Fund's investment objective, strategies, policies, and restrictions and agreements entered into by the Trust and/or the Adviser on behalf of the Trust. In carrying out its general oversight responsibility, the Board regularly interacts with and receives reports from the senior personnel of the Trust's service providers (including, in particular, the Adviser) and the Trust's CCO. The Board is assisted by the Trust's independent registered public accounting firm (who reports directly to the Trust's Audit Committee), independent counsel to the Independent Trustees (as defined below), counsel to the Trust and the Adviser, and other experts selected and approved by the Board.
 
BOARD STRUCTURE AND RELATED MATTERS. Board members who are not “interested persons” of the Trust, as defined in Section 2(a)(19) of the 1940 Act (“Independent Trustees”), constitute 75 percent of the Board. Mr. Charles A. Baker, an Independent Trustee, serves as Independent Chairman of the Board. The Independent Chairman helps to facilitate communication among the Independent Trustees as well as communication between the Independent Trustees and management of the Trust. The Independent Chairman may assume such other duties and perform such activities as the Board may, from time to time, determine should be handled by the Independent Chairman. Mr. Luis Berruga is the sole Board member who is an “interested person” of the Trust (“Interested Trustee”). Mr. Berruga is an Interested Trustee due to his affiliation with the Adviser. The Board believes that having an interested person on the Board facilitates the ability of the Independent Trustees to
47


fully understand (i) the Adviser’s commitment to providing and/or arranging for the provision of quality services to the Funds and (ii) corporate and financial matters of the Adviser that may be of importance in the Board’s decision-making process.
 
The Trustees discharge their responsibilities collectively as a Board, as well as through Board committees, each of which operates pursuant to a charter that delineates the specific responsibilities of that committee. The Board has established two standing committees: an Audit Committee and a Nominating and Governance Committee. Currently, each of the Independent Trustees serves on each of these committees, which are comprised solely of Independent Trustees.
 
The Board periodically evaluates its structure and composition as well as various aspects of its operations. On an annual basis, the Board conducts a self-evaluation process that, among other things, considers (i) whether the Board and its committees are functioning effectively, (ii) given the size and composition of the Board and each of its committees, whether the Trustees are able to effectively oversee the number of funds in the complex and (iii) whether the mix of skills, perspectives, qualifications, attributes, education, and relevant experience of the Trustees helps to enhance the Board's effectiveness.
 
There are no specific required qualifications for Board membership. The Board believes that the different skills, perspectives, qualifications, attributes, education, and relevant experience of each of the Trustees provide the Board with a variety of complementary skills. Please note that (i) none of the Trustees is an "expert" within the meaning of the federal securities laws and (ii) the Board is not responsible for the day to day operations of the Trust and the Funds.
 
The Board of Trustees met five (5) times during the fiscal period ended October 31, 2021. The Board may hold special meetings, as needed, either in person or by telephone, to address matters arising between regular meetings.
 
The Trustees are identified in the table below, which provides information as to their principal business occupations held during the last five years and certain other information. Each Trustee serves until his or her death, resignation or removal and replacement. As of February 1, 2022, each of the Trustees oversaw 102 funds (91 of which were operational). The address for all Trustees and officers is c/o Global X Funds®, 605 3rd Avenue, 43rd Floor, New York, New York 10158.
 
Independent Trustees
48


Name
(Year of Birth)
Position(s) Held
with Funds
Principal Occupation(s) During the Past 5 Years
Number of
Portfolios in Fund
Complex Overseen
by Trustees
Other Directorships Held by Trustees during the
Past 5 Years
Charles A. Baker
(1953)
Trustee (since 07/2018)
Chief Executive Officer of Investment Innovations LLC (investment consulting) (since 2013); Managing Director of NYSE Euronext (2003 to 2012)
102 (91 of which are operational)
Trustee of OSI ETF Trust (since 2016)
Susan M. Ciccarone (1973)
Trustee (since 09/2019)
Partner, Further Global Capital Management (private equity) (since 2017); formerly Chief Operating Officer (2014-2016) and Chief Financial Officer (2012-2016), Emerging Global Advisors, LLC (ETF issuer)
102 (91 of which are operational)
Director of E78 Partners (since 2022); Director of ProSight Global, Inc. (since 2021); Director of Casa Holdco LP, parent of Celink (since 2018); Chairman, Payment Alliance International, Inc. (2019-2021)
Clifford J. Weber
(1963)
Trustee (since 07/2018)
Owner, Financial Products Consulting Group LLC (consulting services to financial institutions) (since 2015); Formerly, Executive Vice President of Global Index and Exchange-Traded Products, NYSE Market, Inc., a subsidiary of Intercontinental Exchange (ETF/ETP listing exchange) (2013-2015)
102 (91 of which are operational)
Chairman (since 2017) and Trustee (since 2015) of Clough Funds Trust; Chairman and Trustee of Clayton Street Trust (since 2016); Chairman and Trustee of Janus Detroit Street Trust (since 2016); Chairman and Trustee of Elevation ETF Trust (2016-2018); Trustee of Clough Global Equity Fund (since 2017); Trustee of Clough Global Dividend and Income Fund (since 2017); and Trustee of Clough Global Opportunities Fund (since 2017)


Interested Trustee/Officers
49


Name
 (Year of Birth)
Position(s) Held
 with Funds
Principal Occupation(s)
During the Past 5 Years
Number of
Portfolios in Fund
Complex Overseen
by Trustees
Other Directorships
Held by Trustees During the Past 5 Years
Luis Berruga
(1977)
Trustee (since 07/2018); President (since 2018) Chief Executive Officer, GXMC (since 07/2018), Chief Financial Officer (since 2/2014) and Chief Operating Officer (9/2015 - 7/2018); Investment Banker, Jefferies (2012-2014) 102 (91 of which are operational)
None
John Belanger
(1982)
Chief Operating Officer and Chief Financial Officer (since 12/2020) Chief Operating Officer and Head of Portfolio Management & Portfolio Administration, GXMC (since 12/2020); Portfolio Manager (since 12/2020); Secretary of the Trust (3/2020-9/2020); Head of Product Management, GXMC (since 1/2020); Consultant to GXMC (9/2018-12/2019); Chief Operating Officer, Rex Shares, LLC (2014-2018)
n/a
n/a
Susan Lively
(1981)
Secretary (since 09/2020) General Counsel, GXMC (since 9/2020); Senior Corporate Counsel at Franklin Templeton (previously, Managing Director and Associate General Counsel at Legg Mason & Co., LLC) (2014-2020)
n/a
n/a
Eric Griffith1
(1969)
Assistant Secretary (since 02/2020) Counsel, SEI Investments (since 10/2019); Vice President and Assistant General Counsel, JPMorgan Chase & Co. (2012-2018)
n/a
n/a
Joe Costello
(1974)
Chief Compliance Officer (since 09/2016) Chief Compliance Officer, FlexShares Funds (2011-2015); Vice President, Northern Trust Investments (2003 - 2015)
n/a
n/a
Ronnie Riven
(1984)
Treasurer and Principal Accounting Officer (since 12/2020) Director of Finance, GXMC (since 2018); Director of Accounting and Finance at Barclays Center (2016-2018); Manager of External Reporting at National Grid (2013-2015) n/a n/a
Eric Olsen1
(1970)
Assistant Treasurer
(since 05/2021)
Director of Accounting, SEI Investment Manager Services (March 2021 to present); Deputy Head of Fund Operations, Traditional Assets, Aberdeen Standard Investments (2013-2021)
n/a
n/a

1    These officers of the Trust also serve as officers of one or more funds for which SEI Investments Company or an affiliate acts as investment manager, administrator or distributor.

In addition to the information set forth in the table above, each Trustee possesses other relevant skills, perspectives, qualifications, attributes, education, and relevant experience. The following provides additional information about certain qualifications and experience of each of the Trustees and the reason why he or she was selected to serve as Trustee.
50



Charles A. Baker: Mr. Baker has extensive knowledge of and experience in the financial services industry, including previously serving as Managing Director of NYSE Euronext. Additionally, Mr. Baker has experience serving as an independent director for an ETF trust.
 
Luis Berruga: Mr. Berruga has extensive knowledge of and experience in the financial services industry, including serving as President and Chief Operating Officer of the Adviser. Mr. Berruga received his MBA from the Kellogg School of Management at Northwestern University.
 
Susan M. Ciccarone: Ms. Ciccarone has extensive knowledge of and experience in the financial services and investment management industries. She is currently a partner of Further Global Capital Management, a private equity firm, and previously served as Chief Operating and Chief Financial Officer of an adviser to ETFs. Ms. Ciccarone received her MBA from the Wharton School of the University of Pennsylvania.

Clifford J. Weber: Mr. Weber has experience previously serving as a senior executive of stock exchanges with responsibilities including ETF and exchange-traded product issues, experience with the structure and operations of ETFs, experience with secondary market transactions involving ETFs, and experience serving as a mutual fund independent director.

RISK MANAGEMENT OVERSIGHT. The Funds are subject to a variety of risks, including (but not limited to) investment risk, financial risk, legal, regulatory and compliance risk, and operational risk. Consistent with its responsibility for general oversight of the business and affairs of the Trust and the Funds, the Board oversees the Adviser's day-to-day management of the risks to which the Trust and the Funds are subject. The Board has charged the Adviser with (i) identifying possible events and circumstances that could have demonstrable, adverse effects on the business and affairs of the Trust and the Funds; (ii) implementing of processes and controls to lessen the possibility that such events or circumstances occur or mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to continuously evaluate business and market conditions to facilitate the processes described in (i) and (ii) above. The Adviser seeks to address the day-to-day risk management of the Trust and the Funds by relying on the Trust's compliance policies and procedures (i.e., the Trust's compliance program) as well as the compliance programs of the Trust's various service providers, internal control mechanisms and other risk oversight mechanisms as well as the assistance of the Trust's sub-administrator. The Adviser also separately considers potential risks that may impact the individual Funds.
 
As noted above, on behalf of the Trust, the Board has adopted, and periodically reviews, various compliance policies and procedures that are designed to address certain risks to the Trust and the Funds. In addition, under the general oversight of the Board, the Adviser and the Trust's other service providers have adopted a variety of processes, policies, procedures and controls designed to address particular risks to which the Trust and the Funds are subject. Different processes, policies, procedures and controls are employed with respect to different types of risks. Further, the Adviser oversees and regularly monitors the investments, operations, and compliance of the Funds' investments with various regulatory and other requirements.
 
Because the day-to-day operations of the Funds are carried out by the Adviser, the risk exposure of the Trust and the Funds are mitigated but not eliminated by the processes overseen by the Board. In addition to the risk management processes, policies, procedures, and controls implemented by the Adviser, the Board seeks to oversee the risk management structure of the Trust and the Funds directly and through its committees (as described below). In this regard, the Board has requested that the Adviser, the CCO for the Trust and the Adviser, the independent auditors for the Trust, and counsel to the Trust and Adviser provide the Board with periodic reports regarding issues that should be focused on by the Board members. In large part, the Board oversees the Adviser's management of the Trust's risk management structure through the Board's review of regular reports, presentations and other information from officers of the Trust and other persons. Senior officers of the Trust, including the Trust's CCO, regularly report to the Board on a range of matters, including those relating to risk management. In this regard, the Board periodically receives reports regarding the Trust's service providers, either directly or through the CCO. On at least a quarterly basis, the Independent Trustees meet with the CCO to discuss matters relating to the Trust's compliance program and, in accordance with Rule 38a-1 under the 1940 Act, the Board receives at least annually a written report from the CCO regarding the effectiveness of the Trust's compliance program. In connection with the CCO's annual Rule 38a-1 compliance report to the Board, the Independent Trustees meet with the CCO in executive session to discuss the Trust's compliance program.
 
Further, the Board regularly receives reports from the Adviser with respect to the Funds' investments and securities trading and, as necessary, any fair valuation determinations made by the Adviser with respect to certain investments held by the Funds. Senior officers of the Trust and Adviser routinely report regularly to the Board on valuation matters, internal controls, accounting and financial reporting policies and practices.  In addition, the Audit Committee receives information on the Funds' internal controls and financial reporting from the Trust's independent registered public accounting firm.
 
51


The Board recognizes that not all risks that may affect the Funds can be identified nor can processes and controls be developed to eliminate or mitigate their occurrence or effects of certain risks. Some risks are simply beyond the reasonable control of the Funds, their management and service providers. Although the risk management process, policies and procedures of the Funds, their management and service providers are designed to be effective, there is no guarantee that they will eliminate or mitigate all such risks. Moreover, it may be necessary to bear certain risks to achieve each Fund's investment objective.

STANDING BOARD COMMITTEES
 
The Board of Trustees currently has two standing committees: an Audit Committee and a Nominating and Governance Committee. Currently, each Independent Trustee serves on each of these committees.
 
AUDIT COMMITTEE. The purposes of the Audit Committee are to assist the Board in (1) its oversight of the Trust's accounting and financial reporting principles and policies and related controls and procedures maintained by or on behalf of the Trust; (2) its oversight of the Trust's financial statements and the independent audit thereof; (3) selecting, evaluating and, where deemed appropriate, replacing the independent registered public accounting firm (or nominating the independent registered public accounting firm to be proposed for shareholder approval in any proxy statement); and (4) evaluating the independence of the independent registered public accounting firm. During the fiscal period ended October 31, 2021, the Audit Committee held four (4) meetings.

NOMINATING AND GOVERNANCE COMMITTEE. The purposes of the Nominating and Governance Committee are, among other things, to assist the Board in (1) its assessment of the adequacy of the Board's adherence to industry corporate governance best practices; (2) periodic evaluation of the operation of the Trust and meetings with management of the Trust concerning the Trust's operations and the application of policies and procedures to the Funds; (3) review, consideration and recommendation to the full Board regarding Independent Trustee compensation; (4) identification and evaluation of potential candidates to fill a vacancy on the Board; and (5) selection from among potential candidates of a nominee to be presented to the full Board for its consideration. The Nominating and Governance Committee will not consider shareholders' nominees. During the fiscal period ended October 31, 2021, the Nominating and Governance Committee held two (2) meetings.

TRUSTEE AND OFFICER OWNERSHIP OF FUND SHARES
 
To the best of the Trust's knowledge, as of the date of this SAI, the Trustees and officers of the Trust, as a group, owned less than 1% of the Shares of each Fund.
 
Securities Ownership
 
Listed below for each Trustee is a dollar range of securities beneficially owned in a Fund together with the aggregate dollar range of equity securities in all registered investment companies overseen by each Trustee that are in the same family of investment companies as the Trust, as of December 31, 2021.
52


Name of Trustee
Fund
Dollar Range of Equity Securities In Fund
Aggregate Dollar Range of Equity Securities in All Funds Overseen by Trustee in Family of Investment Companies
Independent Trustees
Charles A. Baker
None None $50,001-$100,000
Susan M. Ciccarone
None None None
Clifford J. Weber
None None None
Interested Trustee
Luis Berruga
Global X SuperDividend® ETF
$1-$10,000 over $100,000
Global X SuperIncome Preferred ETF $10,001-$50,000 over $100,000
Global X Nasdaq 100® Covered Call ETF
over $100,000 over $100,000
Global X Russell 2000 Covered Call ETF $1-$10,000 over $100,000
Global X SuperDividend® REIT ETF
$1-$10,000 over $100,000
Global X S&P 500® Covered Call & Growth ETF
over $100,000 over $100,000
Global X Nasdaq 100® Covered Call & Growth ETF
over $100,000 over $100,000
Global X S&P 500® Covered Call ETF
over $100,000 over $100,000
Global X MSCI SuperDividend® Emerging Markets ETF
$10,001-$50,000 over $100,000
Global X Renewable Energy Producers ETF $10,001-$50,000 over $100,000
Global X S&P 500® Risk Managed Income ETF
$10,001-$50,000 over $100,000
Global X NASDAQ 100® Risk Managed Income ETF
$10,001-$50,000 over $100,000
Global X MSCI China Information Technology ETF $1-$10,000 over $100,000
Global X MSCI China Health Care ETF $1-$10,000 over $100,000
Global X E-commerce ETF $1-$10,000 over $100,000
Global X S&P 500® Tail Risk ETF
$1-$10,000 over $100,000
Global X S&P 500® Collar 95-110 ETF
$1-$10,000 over $100,000
Global X NASDAQ 100® Collar 95-110 ETF
$1-$10,000 over $100,000
Global X NASDAQ 100® Tail Risk ETF
$1-$10,000 over $100,000



TRUSTEE OWNERSHIP OF SECURITIES OF THE ADVISER AND RELATED COMPANIES

As of December 31, 2021, no Independent Trustee (or any of his or her immediate family members) owned beneficially or of record securities of any Trust investment adviser, its principal underwriter, or any person directly or indirectly, controlling, controlled by or under common control with any Trust investment adviser or principal underwriter.
Name of
Independent Trustee
Name of Owners
and Relationship
to Trustee
Company Title of Class Value of Securities Percent of Class
Charles A. Baker None None None None None
Susan M. Ciccarone None None None None None
Clifford J. Weber None None None None None

No Independent Trustee or immediate family member has during the two most recently completed calendar years had: (i) any material interest, direct or indirect, in any transaction or series of similar transactions, in which the amount involved exceeds $120,000; or (ii) any direct or indirect relationship of any nature, in which the amount involved exceeds $120,000, with:

the Funds;

an officer of the Trust;
53



an investment company, or person that would be an investment company but for the exclusions provided by Sections 3(c)(1) and 3(c)(7) of the 1940 Act, having the same investment adviser or principal underwriter as the Funds or having an investment adviser or principal underwriter that directly or indirectly controls, is controlled by, or is under common control with the Adviser or principal underwriter of the Funds;

an officer or an investment company, or a person that would be an investment company but for the exclusions provided by Sections 3(c)(1) and 3(c)(7) of the 1940 Act, having the same investment adviser or principal underwriter as the Funds or having an investment adviser or principal underwriter that directly or indirectly controls, is controlled by, or is under common control with the Adviser or principal underwriter of the Funds;

the Adviser or principal underwriter of the Funds;

an officer of the Adviser or principal underwriter of the Funds;

a person directly or indirectly controlling, controlled by, or under common control with the Adviser or principal underwriter of the Funds; or

an officer of a person directly or indirectly controlling, controlled by, or under common control with the Adviser or principal underwriter of the Funds.

TRUSTEE COMPENSATION
 
The Interested Trustee is not compensated by the Trust. Rather, he is compensated by the Adviser. Independent Trustee fees are paid from the unitary fee paid to the Adviser by the Funds. All of the Independent Trustees are reimbursed for their travel expenses and other reasonable out-of-pocket expenses incurred in connection with attending Board meetings (these other expenses are subject to Board review to ensure that they are not excessive). The Trust does not accrue pension or retirement benefits as part of the Fund's expenses, and Trustees are not entitled to benefits upon retirement from the Board. The Trust's officers receive no compensation directly from the Trust.
 
The following sets forth the fees paid to each Trustee for the fiscal year ended October 31, 2021, unless otherwise indicated.
Name of
Independent Trustee
Aggregate Compensation from the Funds
Pension or Retirement Benefits Accrued as Part of Funds Expenses
Total Compensation from Trust*
Charles A. Baker
$76,698 $0 $139,167
Susan M. Ciccarone
$76,698 $0 $139,167
Clifford J. Weber
$76,698 $0 $139,167

* Information is as of December 31, 2021.

CODE OF ETHICS
 
The Trust, the Adviser, and the Distributor each have adopted a code of ethics, as required by applicable law, which is designed to prevent affiliated persons of the Trust, the Adviser, and the Distributor from engaging in deceptive, manipulative or fraudulent activities in connection with securities held or to be acquired by the Funds (which may also be held by persons subject to a code of ethics). There can be no assurance that the codes of ethics will be effective in preventing such activities. The codes of ethics permit personnel subject to them to invest in securities, including securities that may be held or purchased by the Funds. The codes of ethics are on file with the SEC and are available to the public.
 
INVESTMENT ADVISER

The Adviser, Global X Management Company LLC, serves as investment manager to the Funds pursuant to an Investment Advisory Agreement between the Trust and the Adviser. It is registered as an investment adviser with the SEC and is located at 605 3rd Avenue, 43rd Floor, New York, New York 10158. The Adviser was organized in Delaware on March 28, 2008 as a limited liability company. On July 2, 2018, the Adviser consummated a transaction pursuant to which the Adviser became an indirect, wholly-owned subsidiary of Mirae Asset Global Investments Co., Ltd. ("Mirae").  In this manner, the Adviser is ultimately controlled by Mirae, which is a leading financial services company in Korea and is the headquarters for the Mirae
54


Asset Global Investments Group.
 
Pursuant to a Supervision and Administration Agreement between the Trust and the Adviser, the Adviser oversees the operation of the Funds, provides or causes to be furnished the advisory, supervisory, administrative, distribution, transfer agency, custody and all other services necessary for the Funds to operate, and exercises day-to-day oversight over the Funds' service providers. Under the Supervision and Administration Agreement, the Adviser also bears all the fees and expenses incurred in connection with its obligations under the Supervision and Administration Agreement, including, but not limited to, the costs of various third-party services required by the Funds, including audit, certain custody, portfolio accounting, legal, transfer agency and printing costs, except those fees and expenses specifically assumed by the Trust on behalf of each Fund.
 
Under the Investment Advisory Agreement between the Trust and the Adviser, the Adviser is responsible for the management of the investment portfolio of each Fund. The ability of the Adviser to successfully implement each Fund's investment strategies will influence such Fund's performance significantly.

Each Fund pays the Adviser a fee ("Management Fee") for the advisory, supervisory, administrative and other services it requires under an all-in fee structure. Each Fund pays (or will pay, for Funds that have not yet commenced operations) a monthly Management Fee to the Adviser at the annual rates set forth in the table below (stated as a percentage of each Fund's respective average daily net assets).
 Fund Management Fee
Global X MSCI Colombia ETF 0.61%
Global X MSCI China Consumer Discretionary ETF 0.65%
Global X MSCI China Industrials ETF 0.65%
Global X MSCI China Communication Services ETF 0.65%
Global X MSCI China Financials ETF 0.65%
Global X MSCI China Energy ETF 0.65%
Global X MSCI China Materials ETF 0.65%
Global X MSCI Norway ETF 0.50%
Global X FTSE Southeast Asia ETF 0.65%
Global X MSCI Argentina ETF 0.59%
Global X MSCI Greece ETF 0.55%
Global X MSCI Nigeria ETF 0.68%
Global X MSCI Next Emerging & Frontier ETF 0.49%
Global X MSCI Portugal ETF 0.55%
Global X DAX Germany ETF 0.20%
Global X MSCI Pakistan ETF 0.68%
Global X MSCI China Consumer Staples ETF 0.65%
Global X MSCI China Health Care ETF 0.65%
Global X MSCI China Information Technology ETF 0.65%
Global X MSCI China Real Estate ETF 0.65%
Global X MSCI China Utilities ETF 0.65%
Global X MSCI Vietnam ETF 0.50%
Global X Copper Miners ETF 0.65%
Global X Silver Miners ETF 0.65%
Global X Gold Explorers ETF 0.65%
Global X Uranium ETF 0.69%
Global X Lithium & Battery Tech ETF 0.75%
Global X SuperDividend® ETF
0.58%
Global X Social Media ETF 0.65%
Global X Guru® Index ETF
0.75%
Global X SuperIncome™ Preferred ETF 0.58%
Global X SuperDividend® U.S. ETF
0.45%
Global X S&P 500® Covered Call ETF
0.60%
55


 Fund Management Fee
Global X NASDAQ 100® Covered Call ETF
0.60%
Global X MSCI SuperDividend® Emerging Markets ETF
0.65%
Global X SuperDividend® REIT ETF
0.58%
Global X Renewable Energy Producers ETF 0.65%
Global X S&P 500® Catholic Values ETF
0.29%
Global X MSCI SuperDividend® EAFE ETF
0.55%
Global X E-commerce ETF 0.50%
Global X Russell 2000 Covered Call ETF 0.60%
Global X S&P Catholic Values Developed ex-U.S. ETF 0.35%
Global X Nasdaq 100® Covered Call & Growth ETF
0.60%
Global X S&P 500® Covered Call & Growth ETF
0.60%
Global X Emerging Markets Internet & E-commerce ETF 0.65%
Global X S&P 500® Tail Risk ETF
0.60%
Global X S&P 500® Risk Managed Income ETF
0.60%
Global X S&P 500® Collar 95-110 ETF
0.60%
Global X NASDAQ 100® Tail Risk ETF
0.60%
Global X NASDAQ 100® Risk Managed Income ETF
0.60%
Global X NASDAQ 100® Collar 95-110 ETF
0.60%
Global X Disruptive Materials ETF 0.59%
Global X S&P Catholic Values U.S. Aggregate Bond ETF 0.25%

In addition, each Fund bears other fees and expenses that are not covered by the Supervision and Administration Agreement, which may vary and will affect the total expense ratio of a Fund, such as taxes, brokerage fees, commissions and other transaction expenses, interest and extraordinary expenses (such as litigation and indemnification expenses). In addition, the Global X MSCI Greece ETF, Global X MSCI Nigeria ETF, Global X MSCI Next Emerging & Frontier ETF, Global X MSCI Portugal ETF and Global X MSCI Pakistan ETF may pay asset-based custodial fees that are not covered by the Supervision and Administration Agreement. The Adviser may earn a profit on the Management Fee paid by the Funds. Also, the Adviser, and not shareholders of the Funds, would benefit from any price decreases in third-party services, including decreases resulting from an increase in net assets.

The Board of Trustees of the Trust voted to approve a lower Management Fee for the Global X DAX Germany ETF of 0.20% effective March 1, 2021.

The Board of Trustees of the Trust voted to approve a lower Management Fee for the Global X Disruptive Materials ETF of 0.59% effective January 7, 2022.

* Pursuant to an Expense Limitation Agreement, the Adviser has contractually agreed to reimburse or waive fees and/or limit expenses for the Global X Russell 2000 Covered Call ETF to the extent necessary to assure that the operating expenses of the Global X Russell 2000 Covered Call ETF (exclusive of taxes, brokerage fees, commissions, and other transaction expenses, interest, and extraordinary expenses (such as litigation and indemnification expenses)) will not exceed 0.60% of the average daily net assets of the Global X Russell 2000 Covered Call ETF per year until at least March 1, 2023.

The Adviser and its affiliates deal, trade and invest for their own accounts in the types of securities in which a Fund also may invest. The Adviser does not use inside information in making investment decisions on behalf of the Funds.

Each of the Supervision and Administration Agreement and the related Investment Advisory Agreement remains in effect for two (2) years from its effective date and thereafter continues in effect for as long as its continuance is specifically approved at least annually, by (i) the Board of Trustees of the Trust, or by the vote of a majority (as defined in the 1940 Act) of the outstanding Shares of the Fund, and (ii) by the vote of a majority of the Trustees of the Trust who are not parties to the Investment Advisory Agreement or interested persons of the Adviser, cast in person at a meeting called for the purpose of voting on such approval. Each of the Supervision and Administration Agreement and the related Investment Advisory Agreement provides that it may be terminated at any time without the payment of any penalty, by the Board of Trustees of the
56


Trust or by vote of a majority of the Funds' shareholders, on 60 calendar days written notice to the Adviser, and by the Adviser on the same notice to the Trust, and that it shall be automatically terminated if it is assigned.
 
Each of the Supervision and Administration Agreement and the related Investment Advisory Agreement provides that the Adviser shall not be liable to each Fund or its shareholders for anything other than willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations or duties. The Investment Advisory Agreement also provides that the Adviser may engage in other businesses, devote time and attention to any other business, whether of a similar or dissimilar nature, and render investment advisory services to others.
 
The Management Fees paid by each operational Fund to the Adviser and the aggregated amount of Management Fees reimbursed or waived by the Adviser (net of expenses reimbursed to the Adviser under the applicable Expense Limitation Agreement) for the fiscal years ended October 31, 2019, 2020 and 2021 are set forth in the chart below. With respect to the Predecessor Funds, the aggregate investment advisory fee waived by the Predecessor Adviser (net expenses reimbursed to the Predecessor Adviser under the expense limitation agreement that was then in effect) are set forth below.
 
57


  Management Fees Paid for the Fiscal Year Ended Reimbursements or Waivers for the Fiscal Year Ended  
 
 
Fund
October 31, 2019 October 31, 2020 October 31, 2021 October 31, 2019 October 31, 2020 October 31, 2021 Date of
Commencement
of Investment Operations
Global X MSCI Colombia ETF 475,942 304,028 251,254 02/05/2009
Global X MSCI China Consumer Discretionary ETF 918,284 1,206,428 4,423,478 11/30/2009
Global X MSCI China Industrials ETF 13,318 12,924 19,979 11/30/2009
Global X MSCI China Communication Services ETF 162,901 124,732 102,643 12/08/2009
Global X MSCI China Financials ETF 445,357 287,558 376,684 12/10/2009
Global X MSCI China Energy ETF 13,853 10,437 18,452 12/15/2009
Global X MSCI China Materials ETF 15,414 11,256 30,529 01/12/2010
Global X MSCI Norway ETF 475,618 238,657 237,832 11/09/2010
Global X FTSE Southeast Asia ETF 138,259 146,393 212,302 02/16/2011
Global X MSCI Argentina ETF 516,954 309,772 253,795 03/02/2011
Global X MSCI Greece ETF 1,642,803 1,094,783 857,664 12/07/2011
Global X MSCI Nigeria ETF 248,282 123,491 293,234 04/02/2013
Global X MSCI Next Emerging & Frontier ETF 79,220 74,579 92,761 11/06/2013
Global X MSCI Portugal ETF 130,057 95,615 84,173 11/12/2013
Global X DAX Germany ETF* 69,383 87,042 103,075 (38,546) (48,356) (26,435) 10/22/2014
Global X MSCI Pakistan ETF 236,171 290,077 219,490 04/22/2015
Global X MSCI China Consumer Staples ETF 10,846 52,651 131,935 12/11/2018
Global X MSCI China Health Care ETF 10,127 38,896 120,361 12/11/2018
Global X MSCI China Information Technology ETF 11,243 71,068 223,776 12/11/2018
Global X MSCI China Real Estate ETF 9,678 47,197 36,990 12/11/2018
Global X MSCI China Utilities ETF 8,816 9,201 10,956 12/11/2018
Global X Copper Miners ETF 376,945 467,753 4,862,889 04/19/2010
Global X Silver Miners ETF 2,480,216 4,422,725 7,754,578 04/19/2010
Global X Gold Explorers ETF 242,739 310,944 362,911 11/03/2010
Global X Uranium ETF 1,641,587 1,089,760 3,942,004 11/04/2010
Global X Lithium & Battery Tech ETF 4,218,370 4,305,340 24,325,097 07/22/2010
Global X SuperDividend® ETF
5,293,929 4,193,913 5,113,691 06/08/2011
Global X Social Media ETF 864,615 966,853 2,615,063 11/14/2011
Global X Guru® Index ETF
425,632 414,735 535,587 06/04/2012
Global X SuperIncome™ Preferred ETF 1,089,704 1,073,279 1,226,468 07/16/2012
Global X SuperDividend® U.S. ETF
2,072,414 2,065,363 2,767,013 03/11/2013
Global X S&P 500® Covered Call ETF*
642,764 785,946 1,701,201 (133) (16) 06/21/2013
Global X NASDAQ 100® Covered Call ETF*
3,120,087 6,217,544 16,896,510 (506) (40) 12/11/2013
Global X MSCI SuperDividend® Emerging Markets ETF
115,011 120,981 294,228 03/16/2015
Global X SuperDividend® REIT ETF
1,221,133 2,106,459 2,618,112 03/16/2015
Global X Renewable Energy Producers ETF 120,510 290,591 754,490 05/27/2015
Global X S&P 500® Catholic Values ETF
662,610 955,620 1,495,289 04/18/2016
Global X MSCI SuperDividend® EAFE ETF
50,688 56,865 64,424 11/14/2016
58


  Management Fees Paid for the Fiscal Year Ended Reimbursements or Waivers for the Fiscal Year Ended  
 
 
Fund
October 31, 2019 October 31, 2020 October 31, 2021 October 31, 2019 October 31, 2020 October 31, 2021 Date of
Commencement
of Investment Operations
Global X E-commerce ETF 13,644 157,190 980,423 11/27/2018
Global X Russell 2000 Covered Call ETF 15,979 83,391 1,053,988 (3,995) (175,662) 04/17/2019
Global X S&P Catholic Values Developed ex-U.S. ETF 3,232 11,318 06/22/2020
Global X Nasdaq 100® Covered Call & Growth ETF
2,711 97,164 09/18/2020
Global X S&P 500® Covered Call & Growth ETF
2,337 50,636 09/18/2020
Global X Emerging Markets Internet & E-commerce ETF 36,760 11/09/2020
Global X S&P 500® Tail Risk ETF
3,166 08/25/2021
Global X S&P 500® Risk Managed Income ETF
3,585 08/25/2021
Global X S&P 500® Collar 95-110 ETF
3,085 08/25/2021
Global X NASDAQ 100® Tail Risk ETF
3,155 08/25/2021
Global X NASDAQ 100® Risk Managed Income ETF
3,781 08/25/2021
Global X NASDAQ 100® Collar 95-110 ETF
2,974 08/25/2021
Global X MSCI Vietnam ETF 12/07/2021
Global X Disruptive Materials ETF (formerly known as Global X Advanced Materials ETF) 01/24/2022

*Reflects the investment advisory fees paid to and aggregate investment advisory fee waived by the Predecessor Adviser (net expenses reimbursed to the Predecessor Adviser under the expense limitation agreement that was then in effect).


PORTFOLIO MANAGERS
 
The portfolio managers Nam To, Wayne Xie, Kimberly Chan, Vanessa Yang, William Helm and Sandy Lu are employees of the Adviser.

Portfolio Manager's Compensation
 
The Adviser believes that its compensation program is competitively positioned to attract and retain high-caliber investment professionals. Portfolio managers receive a salary and are eligible to receive an annual bonus. A portfolio manager's salary compensation is designed to be competitive with the marketplace and reflect the portfolio manager's relative experience and contribution to the Funds. Base salary compensation is reviewed and adjusted annually to reflect increases in the cost of living and market rates. The annual incentive bonus opportunity provides cash bonuses based upon (a) individual performance in the functional aspects of the portfolio manager role, (b) achievement of strategic goals related to process and technology improvement, and (c) overall company performance.  Portfolio manager compensation is not tied to the performance of the individual funds themselves.  Senior members of the portfolio management team may have stock options of the Adviser.
 
Other Accounts Managed by Portfolio Managers
 
It is anticipated that a portfolio manager will be responsible for multiple investment accounts, including other investment companies registered under the 1940 Act. As a general matter, certain conflicts of interest may arise in connection with a portfolio manager's management of a Fund's investments, on the one hand, and the investments of other accounts for which the portfolio manager is responsible, on the other. For example, it is possible that the various accounts managed could have different investment strategies that, at times, might conflict with one another to the possible detriment of a Fund. Alternatively, to the extent that the same investment opportunities might be desirable for more than one account, possible conflicts could arise in determining how to allocate them. Other potential conflicts might include conflicts created by specific portfolio manager
59


compensation arrangements and conflicts relating to selection of brokers or dealers to execute a Fund's trades. The Adviser has structured a portfolio manager's compensation in a manner, and the Funds and the Adviser have adopted policies, procedures and a code of ethics, reasonably designed to safeguard the Funds from being negatively affected as a result of any such conflicts that may arise.
 
The Portfolio Managers were responsible for the management of the following accounts as of October 31, 2021, unless otherwise stated:
Other Accounts Managed

Accounts With Respect To Which The Advisory Fee Is Based On The
Performance of The Account
Name of
Portfolio Manager
Category of Account
Number of Accounts in Category
Total Assets in Accounts in Category
Number of Accounts in Category
Total Assets in Accounts in Category
Nam To
Registered investment companies
87 $41,825,579,200 0 $0.00
Other pooled investment vehicles
2 $45,865,541 0 $0.00
Other accounts
0 $0.00 0 $0.00
Wayne Xie
Registered investment companies
87 $41,825,579,200 0 $0.00
Other pooled investment vehicles
2 $45,865,541 0 $0.00
Other accounts
0 $0.00 0 $0.00
Kimberly Chan
Registered investment companies
87 $41,825,579,200 0 $0.00
Other pooled investment vehicles
2 $45,865,541 0 $0.00
Other accounts
0 $0.00 0 $0.00
Vanessa Yang
Registered investment companies
87 $41,825,579,200 0 $0.00
Other pooled investment vehicles
2 $45,865,541 0 $0.00
Other accounts
0 $0.00 0 $0.00
William Helm*,**
Registered investment companies
51 $21,597,455,136 0 $0.00
Other pooled investment vehicles
18 $314,011,060 0 $0.00
Other accounts
0 $0.00 0 $0.00
Sandy Lu*,**
Registered investment companies
51 $21,597,455,136 0 $0.00
Other pooled investment vehicles
18 $314,011,060 0 $0.00
Other accounts
0 $0.00 0 $0.00
* Messrs. Helm and Lu have acted as Portfolio Managers of the Funds and the other accounts (as applicable) shown in the table as of March 2022.
** Information for Messrs. Helm and Lu is provided as of February 1, 2022.
60


Although the Funds in the Trust that are managed by Messrs. To, Xie, Helm and Lu and Ms. Chan and Ms. Yang may have different investment strategies, each has an investment objective of seeking to replicate, before fees and expenses, its respective underlying index. The Adviser does not believe that management of the various accounts presents a material conflict of interest for Messrs. To, Xie, Helm and Lu and Ms. Chan and Ms. Yang or the Adviser.
 
Disclosure of Securities Ownership
 
Listed below for each Portfolio Manager is a dollar range of securities beneficially owned in a Fund as of October 31, 2021, unless otherwise stated:
  
Name of
Portfolio Manager
Fund Dollar Range of Equity
Securities In Fund
Nam To None None
Wayne Xie
Global X Nasdaq 100® Covered Call ETF
over $100,000
Global X Nasdaq 100® Risk Managed Income ETF
$50,001-$100,000
Global X Russell 2000 Covered Call ETF over $100,000
Global X S&P 500® Covered Call ETF
$50,001-$100,000
Global X E-commerce ETF $10,001-$50,000
Kimberly Chan
Global X Nasdaq 100® Covered Call ETF
$1-$10,000
Vanessa Yang None None
William Helm* None None
Sandy Lu* None None
* Information is shown as of February 1, 2022.

BROKERAGE TRANSACTIONS
 
The policy of the Trust regarding purchases and sales of securities is that primary consideration will be given to obtaining the most favorable prices and efficient executions of transactions. Consistent with this policy, when securities transactions are effected on a stock exchange, the Trust's policy is to pay commissions that are considered fair and reasonable without necessarily determining that the lowest possible commissions are paid in all circumstances. In seeking to determine the reasonableness of brokerage commissions paid in any transaction, the Adviser relies upon its experience and knowledge regarding commissions generally charged by various brokers and in various jurisdictions. The Adviser effects transactions for the Funds with those brokers and dealers that the Adviser believes provide the most favorable prices and are capable of providing the most efficient and best execution of trades. The primary consideration of the Adviser is to seek prompt execution of orders at the most favorable net price. The sale of Shares by a broker-dealer is not a factor in the selection of broker-dealers. The Adviser and its affiliates do not currently participate in any soft dollar transactions, although the Adviser relies on Section 28(e) of the 1934 Act in effecting or executing transactions for the Funds. Accordingly, in selecting broker-dealers to execute a particular transaction, the Adviser may consider the brokerage and research services (as those terms are defined in Section 28(e) of the 1934 Act) provided to the Funds and/or other accounts over which the Adviser or its affiliates exercise investment discretion. The Adviser may cause the Funds to pay a broker-dealer that furnishes brokerage and research services a higher commission than that which might be charged by another broker-dealer for effecting the same transaction, provided that the Adviser determines in good faith that such commission is reasonable in relation the value of the brokerage and research services provided by such broker-dealer, viewed in terms of either the particular transaction or the overall responsibilities of the Adviser to the Funds. Such brokerage and research services might consist of reports and statistics on specific companies or industries or broad overviews of the securities markets and the economy. Shareholders of the Funds should understand that the services provided by such brokers may be useful to the Adviser in connection with its services to other clients.
 
The Adviser assumes general supervision over placing orders on behalf of the Funds for the purchase or sale of portfolio securities. If purchases or sales of portfolio securities by the Funds are considered at or about the same time, transactions in such securities are allocated among the Funds in a manner deemed equitable to the Funds by the Adviser. Bundling or bunching
61


transactions for the Funds is intended to result in better prices for portfolio securities and lower brokerage commissions, which should be beneficial to the Funds.
 
The aggregate brokerage commissions paid by each Fund during the fiscal periods ended October 31, 2019, 2020, and 2021 are set forth in the chart below.
 
62


  Brokerage Commissions Paid for the Fiscal Period Ended  
 
 
Fund
October 31, 2019 October 31, 2020 October 31, 2021 Date of Commencement
of Investment Operations
Global X MSCI Colombia ETF 45,195 31,946 16,698 02/05/2009
Global X MSCI China Consumer Discretionary ETF 156,755 92,150 349,533 11/30/2009
Global X MSCI China Industrials ETF 1,830 511 3,305 11/30/2009
Global X MSCI China Communication Services ETF 37,089 9,192 12,267 12/08/2009
Global X MSCI China Financials ETF 87,800 20,240 23,978 12/10/2009
Global X MSCI China Energy ETF 2,946 1,056 3,054 12/15/2009
Global X MSCI China Materials ETF 1,887 1,236 3,928 01/12/2010
Global X MSCI Norway ETF* 10,522 4,396 4,432 11/09/2010
Global X FTSE Southeast Asia ETF 3,577 2,064 8,152 02/16/2011
Global X MSCI Argentina ETF 24,745 37,488 14,166 03/02/2011
Global X MSCI Greece ETF 53,010 91,443 99,958 12/07/2011
Global X MSCI Nigeria ETF 344,823 156,463 67,468 04/02/2013
Global X MSCI Next Emerging & Frontier ETF 47,641 21,453 26,544 11/06/2013
Global X MSCI Portugal ETF 5,466 4,347 7,941 11/12/2013
Global X DAX Germany ETF* 2,607 2,230 10,493 10/22/2014
Global X MSCI Pakistan ETF 97,064 160,455 107,839 04/22/2015
Global X MSCI China Consumer Staples ETF 2,070 14,892 10,444 12/11/2018
Global X MSCI China Health Care ETF 1,800 6,595 10,915 12/11/2018
Global X MSCI China Information Technology ETF 1,973 14,787 26,396 12/11/2018
Global X MSCI China Real Estate ETF 1,133 7,786 2,521 12/11/2018
Global X MSCI China Utilities ETF 1,477 631 1,010 12/11/2018
Global X Copper Miners ETF 18,657 21,470 228,567 04/19/2010
Global X Silver Miners ETF 212,358 204,150 290,819 04/19/2010
Global X Gold Explorers ETF 6,906 13,311 11,527 11/03/2010
Global X Uranium ETF 79,396 131,753 239,546 11/04/2010
Global X Lithium & Battery Tech ETF 214,374 543,718 3,132,832 07/22/2010
Global X SuperDividend® ETF
610,184 1,077,888 887,609 06/08/2011
Global X Social Media ETF 22,501 21,309 112,793 11/14/2011
Global X Guru® Index ETF
34,658 24,496 21,688 06/04/2012
Global X SuperIncome™ Preferred ETF 51,651 63,285 102,203 07/16/2012
Global X SuperDividend® U.S. ETF
295,769 689,198 260,645 03/11/2013
Global X S&P 500® Covered Call ETF*
8,398 95,010 67,805 06/21/2013
Global X NASDAQ 100® Covered Call ETF*
43,582 216,607 236,352 12/11/2013
Global X MSCI SuperDividend® Emerging Markets ETF
26,987 35,445 105,343 03/16/2015
Global X SuperDividend® REIT ETF
90,457 624,669 265,710 03/16/2015
Global X Renewable Energy Producers ETF 17,396 19,736 94,999 05/27/2015
Global X S&P 500® Catholic Values ETF
8,073 5,483 6,747 04/18/2016
Global X MSCI SuperDividend® EAFE ETF
2,771 7,199 10,482 11/14/2016
Global X E-commerce ETF 510 13,571 14,403 11/27/2018
Global X Russell 2000 Covered Call ETF 896 26,492 65,255 04/17/2019
Global X S&P Catholic Values Developed ex-U.S. ETF 107 598 06/22/2020
Global X Nasdaq 100® Covered Call & Growth ETF
118 2359 09/18/2020
Global X S&P 500® Covered Call & Growth ETF
513 8585 09/18/2020
Global X Emerging Markets Internet & E-commerce ETF 1,624 11/09/2020
Global X S&P 500® Tail Risk ETF
429 08/25/2021
Global X S&P 500® Risk Managed Income ETF
2,119 08/25/2021
Global X S&P 500® Collar 95-110 ETF
670 08/25/2021
Global X NASDAQ 100® Tail Risk ETF
60 08/25/2021
Global X NASDAQ 100® Risk Managed Income ETF
355 08/25/2021
Global X NASDAQ 100® Collar 95-110 ETF
137 08/25/2021
Global X MSCI Vietnam ETF 12/07/2021
Global X Disruptive Materials ETF (formerly known as Global X Advanced Materials ETF) 01/24/2022

63


*    Reflects the aggregate brokerage commissions paid by the applicable predecessor fund.


PROXY VOTING
 
The Funds have delegated proxy voting responsibilities to the Adviser, subject to the Board of Trustees' oversight. In delegating proxy responsibilities, the Board of Trustees has directed that proxies be voted consistent with each Fund's and its shareholders' best interests and in compliance with all applicable proxy voting rules and regulations. The Adviser has adopted proxy voting policies and guidelines for this purpose ("Proxy Voting Policies") and the Adviser has engaged a third party proxy solicitation firm, Glass Lewis & Co. ("Glass Lewis"), an independent third party proxy service that is responsible for the actual voting of all proxies in a timely manner, while the CCO is responsible for monitoring the effectiveness of the Proxy Voting Policies. The Proxy Voting Policies have been adopted by the Trust as the policies and procedures that the Adviser will use when voting proxies on behalf of the Funds.

In addition to the general Proxy Voting Policies, the Adviser has adopted the Catholic voting policy addendum (the "Catholic Policy Addendum") with respect to the Global X S&P 500® Catholic Values ETF and the ESG (Environmental, Social & Governance) voting policy addendum for the Global X Renewable Energy Producers ETF.

I. General Guidelines
 
Except in instances where the Adviser has provided Glass Lewis with different direction, Glass Lewis has agreed to vote proxies in accordance with recommendations developed by Glass Lewis and overseen by the Advisor. The Glass Lewis guidelines address a wide variety of individual topics, including, among other matters, shareholder voting rights, anti-takeover defenses, board structures, the election of directors, executive and director compensation, reorganizations, mergers, and various shareholder proposals. The Glass Lewis guidelines encourage the maximization of return for shareholders through identifying and avoiding financial, audit and corporate governance risks. Detailed information on Glass Lewis’s proxy voting guidelines are available under “Proxy Paper GuidelinesTM” from Glass Lewis at www.glasslewis.com/guidelines.

The Proxy Voting Policies are designed to ensure that all issues brought to shareholders are analyzed in light of the Adviser's fiduciary responsibilities. The Proxy Voting Policies address the Adviser's oversight of Glass Lewis, as well as when securities on loan are recalled to participate in proxy votes. Additionally, the Proxy Voting Policies address material conflicts of interest that may arise between the interests of the Funds and the interests of the Adviser. In situations in which there is a conflict of interest between the interests of the Adviser or its affiliates and the interests of the Fund’s shareholders, the Adviser will take necessary actions to resolve the conflict and to protect the interests of shareholders.
 
II. Oversight of Third Party Solicitation Firm

The Advisor has reviewed the principles and procedures employed by Glass Lewis in making recommendations on voting proxies on each issue presented, and has satisfied itself that Glass Lewis’s recommendations are (i) based upon an appropriate level of diligence and research, and (ii) designed to further the interests of shareholders, and not serve other unrelated or improper interests. The Advisor shall review its determinations as to Glass Lewis at least annually.

III. Record of Proxy Voting
 
Information on how the Funds voted proxies relating to portfolio securities during the most recent 12 month period ended October 31 is available (1) without charge, upon request, by calling 1-888-843-7824 and (2) on the SEC's website at www.sec.gov.

SUB-ADMINISTRATOR
 
SEI Investments Global Funds Services ("SEIGFS"), located at One Freedom Valley Drive, Oaks, PA 19456, serves as sub-administrator to the Funds. As sub-administrator, SEIGFS provides the Funds with all required general administrative services, including, without limitation, office space, equipment, and personnel; clerical and general back office services; bookkeeping, internal accounting and secretarial services; the calculation of NAV; and the coordination or preparation and filing of all reports, registration statements, proxy statements and all other materials required to be filed or furnished by the Funds under federal and state securities laws. As compensation for these services, SEIGFS receives certain out-of-pocket costs, transaction fees and asset-based fees which are accrued daily and paid monthly by the Adviser from its fees.

DISTRIBUTOR
64


 
The Trust has entered into a Distribution Agreement under which SEI Investments Distribution Co. ("SIDCO"), with principal offices at One Freedom Valley Drive, Oaks, PA 19456, serves as the Funds' underwriter and distributor of Creation Units. The distributor has no obligation to sell any specific quantity of Shares of the Funds. SIDCO bears the following costs and expenses relating to the distribution of Shares: (i) the costs of processing and maintaining records of creations of Creation Units; (ii) all costs of maintaining the records required of a registered broker/dealer; (iii) the expenses of maintaining its registration or qualification as a dealer or broker under federal or state laws; (iv) filing fees; and (v) all other expenses incurred in connection with the distribution services as contemplated in the Distribution Agreement. No compensation is payable by the Trust to SIDCO for such distribution services. The Distribution Agreement provides that the Trust will indemnify SIDCO against certain liabilities relating to untrue statements or omissions of material fact except those resulting from the reliance on information furnished to the Trust by SIDCO, or those resulting from the willful misfeasance, bad faith or gross negligence of SIDCO, or SIDCO's reckless disregard of its duties and obligations under the Distribution Agreement. SIDCO, its affiliates and officers have no role in determining the investment policies or which securities are to be purchased or sold by the Trust or the Funds. The Distributor is not affiliated with the Trust, the Adviser or any stock exchange.
 
Additionally, the Adviser or its affiliates may, from time to time, and from its own resources, pay, defray or absorb costs relating to distribution, including payments out of its own resources to SIDCO or to otherwise promote the sale of shares.

CUSTODIAN AND TRANSFER AGENT
 
Brown Brothers Harriman & Co. ("BBH"), located at 50 Post Office Square, Boston, MA 02110, serves as custodian of the Funds' assets ("Custodian"). As Custodian, BBH has agreed to (1) make receipts and disbursements of money on behalf of each Fund, (2) collect and receive all income and other payments and distributions on account of each Fund's portfolio investments, (3) respond to correspondence from shareholders, security brokers and others relating to its duties; and (4) make periodic reports to the Funds concerning the Funds' operations. BBH does not exercise any supervisory function over the purchase and sale of securities. As compensation for these services, the Custodian receives certain out-of-pocket costs, transaction fees and asset-based fees which are accrued daily and paid monthly by the Adviser from its fees.

As transfer agent, BBH has agreed to (1) issue and redeem Shares of each Fund, (2) make dividend and other distributions to shareholders of each Fund, (3) respond to correspondence by shareholders and others relating to its duties; (4) maintain shareholder accounts, and (5) make periodic reports to the Funds. As compensation for these services, BBH receives certain out-of-pocket costs, transaction fees and asset-based fees which are accrued daily and paid monthly by the Adviser from its fees.

SECURITIES LENDING AGENT
The Board of Trustees has approved each Fund's participation in a securities lending program. Under the securities lending program, BBH serves as the Funds' securities lending agent ("Securities Lending Agent").
For the fiscal year ended October 31, 2021, the total income earned by the Funds, as well as the fees and/or compensation paid by the Funds (in dollars) pursuant to a securities lending agreement between the Trust, with respect to the Funds, and the Securities Lending Agent were as follows:
65


Global X MSCI Colombia ETF Global X MSCI China Consumer Discretionary ETF Global X MSCI China Communication Services ETF
Gross income earned by the Fund from securities lending activities $1,771.90 $285,738.10 $8,700.27
Fees paid to Securities Lending Agent from revenue split $230.21 $37,145.69 $1,130.84
Fees paid for any cash collateral management service (including fees deducted from a pooled cash collateral reinvestment vehicle) not included in a revenue split $196.60 $11,826.26 $251.08
Administrative fees not included in a revenue split
Indemnification fees not included in a revenue split
Rebate (paid to borrower) $0.75
Other fees not included above
Aggregate fees/compensation paid by the Fund for securities lending activities $427.56 $48,971.95 $1,381.92
Net income from securities lending activities $1,344.34 $236,766.15 $7,318.34
Global X MSCI China Financials ETF Global X MSCI Norway ETF Global X FTSE Southeast Asia ETF Global X MSCI Argentina ETF Global X MSCI Greece ETF
Gross income earned by the Fund from securities lending activities $3,517.64 $914.74 $3,140.99 $34,764.11 $530,175.54
Fees paid to Securities Lending Agent from revenue split $457.30 $118.89 $408.43 $4,514.89 $68,921.87
Fees paid for any cash collateral management service (including fees deducted from a pooled cash collateral reinvestment vehicle) not included in a revenue split $106.09 $57.86 $250.36 $1,129.39 $3,999.41
Administrative fees not included in a revenue split
Indemnification fees not included in a revenue split
Rebate (paid to borrower) $23.80
Other fees not included above
Aggregate fees/compensation paid by the Fund for securities lending activities $563.39 $176.75 $658.79 $5,668.08 $72,921.28
Net income from securities lending activities $2,954.26 $737.99 $2,482.20 $29,096.02 $457,254.25

Global X MSCI Portugal ETF Global X MSCI China Information Technology ETF Global X Copper Miners ETF Global X Silver Miners ETF Global X Gold Explorers ETF
Gross income earned by the Fund from securities lending activities $34,799.91 $483.61 $289,294.97 $2,167,240.88 $51,624.66
Fees paid to Securities Lending Agent from revenue split $4,522.42 $62.82 $37,607.73 $281,061.41 $6,711.03
Fees paid for any cash collateral management service (including fees deducted from a pooled cash collateral reinvestment vehicle) not included in a revenue split $183.99 $90.16 $5,894.33 $44,195.84 $1,222.13
Administrative fees not included in a revenue split
Indemnification fees not included in a revenue split
Rebate (paid to borrower) $5,626.33
Other fees not included above
Aggregate fees/compensation paid by the Fund for securities lending activities $4,706.41 $152.98 $43,502.06 $330,883.58 $7,933.16
Net income from securities lending activities $30,093.50 $330.64 $245,792.90 $1,836,357.29 $43,691.51

66


Global X Uranium ETF Global X Lithium & Battery Tech ETF Global X SuperDividend® ETF Global X Social Media ETF Global X Guru® Index ETF Global X SuperIncome™ Preferred ETF
Gross income earned by the Fund from securities lending activities $1,321,356.99 $6,630,577.53 $1,350,850.51 $136,303.21 $44,172.07 $24,965.78
Fees paid to Securities Lending Agent from revenue split $171,758.64 $861,686.11 $175,610.55 $17,675.75 $5,742.48 $3,245.48
Fees paid for any cash collateral management service (including fees deducted from a pooled cash collateral reinvestment vehicle) not included in a revenue split $26,626.61 $55,180.50 $17,759.79 $2,083.05 $607.47 $737.79
Administrative fees not included in a revenue split
Indemnification fees not included in a revenue split
Rebate (paid to borrower) $109.12 $332.71
Other fees not included above
Aggregate fees/compensation paid by the Fund for securities lending activities $198,494.37 $916,866.61 $193,370.34 $20,091.51 $6,349.95 $3,983.27
Net income from securities lending activities $1,122,862.61 $5,713,710.87 $1,157,480.16 $116,211.70 $37,822.12 $20,982.50

Global X SuperDividend® U.S. ETF Global X SuperDividend® REIT ETF Global X Renewable Energy Producers ETF Global X E-commerce ETF
Gross income earned by the Fund from securities lending activities $1,660,050.41 $1,552,681.06 $42,585.20 $18,693.56
Fees paid to Securities Lending Agent from revenue split $215,806.63 $201,848.33 $5,534.02 $2,429.34
Fees paid for any cash collateral management service (including fees deducted from a pooled cash collateral reinvestment vehicle) not included in a revenue split $9,832.45 $4,495.09 $1,522.56 $2,054.78
Administrative fees not included in a revenue split
Indemnification fees not included in a revenue split
Rebate (paid to borrower)
Other fees not included above
Aggregate fees/compensation paid by the Fund for securities lending activities $225,639.08 $206,343.42 $7,056.58 $4,484.12
Net income from securities lending activities $1,434,411.32 $1,346,337.63 $35,528.62 $14,209.43

For the fiscal year ended October 31, 2021, the Securities Lending Agent provided the following services to the Funds in connection with their securities lending activities: (i) entering into loans subject to guidelines or restrictions provided by the Funds; (ii) establishing and maintaining collateral accounts; (iii) monitoring daily the value of the loaned securities and collateral; (iv) seeking additional collateral as necessary from borrowers, and returning collateral to borrowers; (v) receiving and holding collateral from borrowers, and facilitating the investment and reinvestment of cash collateral; (vi) negotiating loan terms; (vii) selecting securities to be loaned subject to guidelines or restrictions provided by the Funds; (viii) recordkeeping and account servicing; (ix) monitoring dividend and proxy activity relating to loaned securities; and (x) arranging for return of loaned securities to the Funds at loan termination.

DESCRIPTION OF SHARES
 
The Declaration of Trust of the Trust ("Declaration") permits the Trust's Board to issue an unlimited number of full and fractional shares of beneficial interest of one or more separate series representing interests in one or more investment portfolios. The Board of Trustees or the Trust may create additional series and each series may be divided into classes.
 
Under the terms of the Declaration, each Share of each Fund represents a proportionate interest in the particular Fund with each other share of its class in the same Fund and is entitled to such dividends and distributions out of the income belonging to the Fund as are authorized by the Trustees and declared by the Trust. Upon any liquidation of a Fund, shareholders of each class of the Fund are entitled to share pro rata in the net assets belonging to that class available for distribution. Shares do not have any preemptive or conversion rights. The right of redemption is described in the Prospectus. In addition, pursuant to the terms of the 1940 Act, the right of a shareholder to redeem Shares and the date of payment by a Fund may be suspended for more than seven days (i) for any period during which the New York Stock Exchange is closed, other than the customary weekends or holidays, or trading in the markets the Fund normally utilizes is closed or is restricted as determined by the SEC, (ii) during any
67


emergency, as determined by the SEC, as a result of which it is not reasonably practicable for such Fund to dispose of instruments owned by it or fairly to determine the value of its net assets, or (iii) for such other period as the SEC may by order permit for the protection of the shareholders of such Fund. The Trust also may suspend or postpone the recording of the transfer of its shares upon the occurrence of any of the foregoing conditions. In addition, Shares of each Fund are redeemable at the unilateral option of the Trust. The Declaration permits the Board to alter the number of Shares constituting a Creation Unit or to specify that shares of beneficial interest of the Trust may be individually redeemable. Shares when issued as described in the Prospectus are validly issued, fully paid and non-assessable. In the interests of economy and convenience, certificates representing Shares of the Funds are not issued.
 
Following the creation of the initial Creation Unit Aggregation(s) of a Fund and immediately prior to the commencement of trading in such Fund's Shares, a holder of Shares may be a "control person" of the Fund, as defined in the 1940 Act. A Fund cannot predict the length of time for which one or more shareholders may remain a control person of the Fund.
 
The proceeds received by each Fund for each issue or sale of its Shares, and all net investment income, realized and unrealized gain and proceeds thereof, subject only to the rights of creditors of that Fund, will be specifically allocated to and constitute the underlying assets of that Fund. The underlying assets of each Fund will be segregated on the books of account, and will be charged with the liabilities in respect to that Fund and with a share of the general liabilities of the Trust. Expenses with respect to the Funds normally are allocated in proportion to the NAV of the respective Fund, except where allocations of direct expenses can otherwise be fairly made.
 
Shareholders are entitled to one vote for each full Share held and proportionate fractional votes for fractional Shares held. The funds of the Trust entitled to vote on a matter will vote in the aggregate and not by fund, except as required by law or when the matter to be voted on affects only the interests of shareholders of a particular fund or class.
 
Rule 18f-2 under the 1940 Act provides that any matter required by the provisions of the 1940 Act or applicable state law, or otherwise, to be submitted to the holders of the outstanding voting securities of an investment company (such as the Trust) shall not be deemed to have been effectively acted upon unless approved by the holders of a majority of the outstanding shares of each investment portfolio affected by such matter. Rule 18f-2 further provides that an investment portfolio shall be deemed to be affected by a matter unless the interests of each investment portfolio in the matter are substantially identical or the matter does not affect any interest of the investment portfolio. Under Rule 18f-2, the approval of an Investment Advisory Agreement, a distribution plan subject to Rule 12b-1 under the 1940 Act or any change in the fundamental investment policy would be effectively acted upon with respect to an investment portfolio only if approved by a majority of the outstanding shares of such investment portfolio. However, Rule 18f-2 also provides that the ratification of the appointment of independent accountants, the approval of principal underwriting contracts and the election of Trustees are exempt from the separate voting requirements stated above.
 
The Trust is not required to hold annual meetings of shareholders and does not intend to hold such meetings. In the event that a meeting of shareholders is held, each share of the Trust will be entitled, as determined by the Trustees without the vote or consent of shareholders, to one vote for each share represented by such shares on all matters presented to shareholders, including the election of Trustees (this method of voting being referred to as "dollar-based voting"). However, to the extent required by the 1940 Act or otherwise determined by the Trustees, series and classes of the Trust will vote separately from each other. Shareholders of the Trust do not have cumulative voting rights in the election of Trustees and, accordingly, the holders of more than 50% of the aggregate voting power of the Trust may elect all of the Trustees, irrespective of the vote of the other shareholders. Meetings of shareholders of the Trust, or any series or class thereof, may be called by the Trustees, the President or Secretary of the Trust or upon the written request of holders of at least a majority of the shares entitled to vote at such meeting. The shareholders of the Trust will have voting rights only with respect to the limited number of matters specified in the Declaration and such other matters as the Trustees may determine or may be required by law.

The Declaration authorizes the Trustees, without shareholder approval (except as stated in the next paragraph), to cause the Trust, or any series thereof, to merge or consolidate with any corporation, association, trust or other organization or sell or exchange all or substantially all of the property belonging to the Trust, or any series thereof. In addition, the Trustees, without shareholder approval, may adopt a "master-feeder" structure by investing substantially all of the assets of a series of the Trust in the securities of another open-end investment company or pooled portfolio.

The Declaration also authorizes the Trustees, in connection with the termination or other reorganization of the Trust or any series or class by way of merger, consolidation, the sale of all or substantially all of the assets, or otherwise, to classify the shareholders of any class into one or more separate groups and to provide for the different treatment of shares held by the different groups, provided that such termination or reorganization is approved by a majority of the outstanding voting securities (as defined in the 1940 Act) of each group of shareholders that are so classified.
68


 
The Declaration permits the Trustees to amend the Declaration without a shareholder vote. However, shareholders of the Trust have the right to vote on any amendment: (i) that would adversely affect the voting rights of shareholders specified in the Declaration; (ii) that is required by law to be approved by shareholders; (iii) to the amendment section of the Declaration; or (iv) that the Trustees determine to submit to shareholders.
 
The Declaration permits the termination of the Trust or of any series or class of the Trust: (i) by vote of a majority of the affected shareholders at a meeting of shareholders of the Trust, series or class; or (ii) by vote of a majority of the Trustees without shareholder approval if the Trustees determine that such action is in the best interest of the Trust or its shareholders. The factors and events that the Trustees may take into account in making such determination include: (i) the inability of the Trust or any series or class to maintain its assets at an appropriate size; (ii) changes in laws or regulations governing the Trust, or any series or class thereof, or affecting assets of the type in which it invests; or (iii) economic developments or trends having a significant adverse impact on their business or operations.
 
In the event of a termination of the Trust or a Fund, the Board, in its sole discretion, could determine to permit the shares to be redeemable in aggregations smaller than Creation Unit Aggregations or to be individually redeemable. In such circumstance, the Trust may make redemptions in-kind, for cash, or for a combination of cash or securities.
 
The Declaration provides that the Trustees will not be liable to any person other than the Trust or a shareholder and that a Trustee will not be liable for any act as a Trustee. Additionally, subject to applicable federal law, no person who is or who has been a Trustee or officer of the Trust shall be liable to the Trust or to any shareholder for money damages, except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or services or (b) active and deliberate dishonesty established by a final judgment and which is material to the cause of action. However, nothing in the Declaration protects a Trustee against any liability to which he or she would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office. The Declaration provides for indemnification of Trustees and officers of the Trust unless the indemnitee is liable to the Trust or any shareholder by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such person's office.
 
The Declaration provides that each shareholder, by virtue of becoming such, will be held to have expressly assented and agreed to the terms of the Declaration.
 
The Declaration provides that a shareholder of the Trust may bring a derivative action on behalf of the Trust only if the following conditions are met: (i) the shareholder was a shareholder at the time of the action complained of; (ii) the shareholder was a shareholder at the time demand is made; (iii) the shareholder must make demand to the Trustees before commencing a derivative action on behalf of the Trust; (iv) any shareholders that hold at least 10% of the outstanding shares of the Trust (or 10% of the outstanding shares of the series or class to which such action relates) must join in the request for the Trustees to commence such action; and (v) the Trustees must be afforded a reasonable amount of time to consider such shareholder request and to investigate the basis of such claim. The Declaration also provides that no person, other than the Trustees, who is not a shareholder of a particular series or class shall be entitled to bring any derivative action, suit or other proceeding on behalf of or with respect to such series or class. The Trustees will be entitled to retain counsel or other advisers in considering the merits of the request and will require an undertaking by the shareholders making such request to reimburse the Trust for the expense of any such advisers in the event that the Trustees determine not to bring such action.
 
The term "majority of the outstanding shares" of either the Trust or a particular fund or investment portfolio means, with respect to the approval of an Investment Advisory Agreement, a distribution plan or a change in the fundamental investment policy, the vote of the lesser of (i) 67% or more of the shares of the Trust or such fund or portfolio present at a meeting, if the holders of more than 50% of the outstanding shares of the Trust or such fund or portfolio are present or represented by proxy, or (ii) more than 50% of the outstanding shares of the Trust or such fund or portfolio.

BOOK-ENTRY ONLY SYSTEM
 
The following information supplements and should be read in conjunction with the "Shareholder Information" section in the Prospectus. The Depository Trust Company ("DTC") acts as Securities Depository for the shares of the Trust. Shares of each Fund are represented by securities registered in the name of DTC or its nominee and deposited with, or on behalf of, DTC.

DTC, a limited-purpose trust company, was created to hold securities of its participants ("DTC Participants") and to facilitate the clearance and settlement of securities transactions among the DTC Participants in such securities through electronic book-entry changes in accounts of the DTC Participants, thereby eliminating the need for physical movement of securities'
69


certificates. DTC Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives) own DTC. More specifically, DTC is a subsidiary of the Depository Trust and Clearing Corporation ("DTCC"), which is owned by its member firms, including international broker/dealers, correspondent and clearing banks, mutual fund companies and investment banks. Access to the DTC system is also available to others such as banks, brokers, dealers and Trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly ("Indirect Participants").
 
Beneficial ownership of shares is limited to DTC Participants, Indirect Participants and persons holding interests through DTC Participants and Indirect Participants. Ownership of beneficial interests in shares (owners of such beneficial interests are referred to herein as "Beneficial Owners") is shown on, and the transfer of ownership is effected only through, records maintained by DTC (with respect to DTC Participants) and on the records of DTC Participants (with respect to Indirect Participants and Beneficial Owners that are not DTC Participants). Beneficial Owners will receive from or through the DTC Participant a written confirmation relating to their purchase of shares. The laws of some jurisdictions may require that certain purchasers of securities take physical delivery of such securities in definitive form. Such laws may impair the ability of certain investors to acquire beneficial interests in shares.
 
Beneficial Owners of shares are not entitled to have shares registered in their names, will not receive or be entitled to receive physical delivery of certificates in definitive form and are not considered the registered holder thereof. Accordingly, each Beneficial Owner must rely on the procedures of DTC, the DTC Participant and any Indirect Participant through which such Beneficial Owner holds its interests, to exercise any rights of a holder of shares. The Trust understands that under existing industry practice, in the event the Trust requests any action of holders of shares, or a Beneficial Owner desires to take any action that DTC, as the record owner of all outstanding shares, is entitled to take, DTC would authorize the DTC Participants to take such action and that the DTC Participants would authorize the Indirect Participants and Beneficial Owners acting through such DTC Participants to take such action and would otherwise act upon the instructions of Beneficial Owners owning through them. As described above, the Trust recognizes DTC or its nominee as the owner of all shares for all purposes.
 
Conveyance of all notices, statements and other communications to Beneficial Owners is effected as follows. Pursuant to the Depositary Agreement between the Trust and DTC, DTC is required to make available to the Trust upon request and for a fee to be charged to the Trust a listing of the share holdings of each DTC Participant. The Trust shall inquire of each such DTC Participant as to the number of Beneficial Owners holding shares of the Funds, directly or indirectly, through such DTC Participant. The Trust shall provide each such DTC Participant with copies of such notice, statement or other communication, in such form, number and at such place as such DTC Participant may reasonably request, in order that such notice, statement or communication may be transmitted by such DTC Participant, directly or indirectly, to such Beneficial Owners. In addition, the Trust shall pay to each such DTC Participant a fair and reasonable amount as reimbursement for the expenses attendant to such transmittal, all subject to applicable statutory and regulatory requirements.
 
Share distributions shall be made to DTC or its nominee, Cede & Co., as the registered holder of all shares of the Trust. DTC or its nominee, upon receipt of any such distributions, shall credit immediately DTC Participants' accounts with payments in amounts proportionate to their respective beneficial interests in shares as shown on the records of DTC or its nominee. Payments by DTC Participants to Indirect Participants and Beneficial Owners of shares held through such DTC Participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in a "street name," and will be the responsibility of such DTC Participants. The Trust has no responsibility or liability for any aspects of the records relating to or notices to Beneficial Owners, or payments made on account of beneficial ownership interests in such shares, or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests or for any other aspect of the relationship between DTC and the DTC Participants or the relationship between such DTC Participants and the Indirect Participants and Beneficial Owners owning through such DTC Participants.
 
DTC may determine to discontinue providing its service with respect to shares of the Trust at any time by giving reasonable notice to the Trust and discharging its responsibilities with respect thereto under applicable law. Under such circumstances, the Trust shall take action either to find a replacement for DTC to perform its functions at a comparable cost or, if such a replacement is unavailable, to issue and deliver printed certificates representing ownership of shares, unless the Trust makes other arrangements with respect thereto satisfactory to the Exchange on which shares are listed.

PURCHASE AND REDEMPTION OF CREATION UNITS
 
TRANSACTIONS IN CREATION UNITS

70


The Fund may issue or redeem Creation Units in return for a “custom basket” or a “standard basket” of cash and/or securities that the Fund specifies any Business Day (defined below). A custom basket is defined as either (i) a basket that is composed of a non-representative selection of the exchange-traded fund’s portfolio holdings; or (ii) a representative basket that is different from the initial basket used in transactions on the same business day. A standard basket is a basket of securities, assets or other positions that is generally representative of the Fund’s portfolio in exchange for which an exchange-traded fund issues (or in return for which it redeems) creation units.

All standard and custom baskets will be governed by the Trust’s written policies and procedure for basket creation, including (with respect to custom baskets): (i) detailed parameters for the construction and acceptance of custom baskets that are in the best interest of the Fund and its shareholders, including the process for any revisions to, or deviations from, those parameters; and (ii) a specification of the titles or roles of the employees of the Adviser (and the Sub-Adviser) who are required to review each custom basket for compliance with those parameters.

CREATION UNIT AGGREGATIONS
 
The Trust issues and sells Shares of each Fund only in Creation Unit Aggregations. The Board reserves the right to declare a split or a consolidation in the number of shares outstanding of any fund of the Trust, and to make a corresponding change in the number of shares constituting a Creation Unit, in the event that the per share price in the secondary market rises (or declines) to an amount that falls outside the range deemed desirable by the Board.

PURCHASE AND ISSUANCE OF CREATION UNIT AGGREGATIONS
 
General. The Trust issues and sells Shares of each Fund only in Creation Units on a continuous basis through the Distributor, without a sales load, at the Fund's NAV next determined after receipt, on any Business Day (as defined herein), of an order in proper form.
 
A "Business Day" with respect to each Fund is any day on which the NYSE is open for business. As of the date of this SAI, the NYSE observes the following holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
 
Portfolio Deposit. The consideration for purchase of a Creation Unit of Shares of a Fund generally consists of the in-kind deposit of a designated portfolio of securities (the "Deposit Securities") constituting an optimized representation of the Fund's Underlying Index and an amount of cash in U.S. dollars computed as described below (the "Cash Component"). Together, the Deposit Securities and the Cash Component constitute the "Portfolio Deposit," which represents the minimum initial and subsequent investment amount for a Creation Unit of such Fund. The Cash Component is an amount equal to the Balancing Amount (as defined below). The "Balancing Amount" is an amount equal to the difference between (x) the net asset value (per Creation Unit) of a Fund and (y) the "Deposit Amount" which is the market value (per Creation Unit) of the Deposit Securities. The Balancing Amount serves the function of compensating for any differences between the net asset value per Creation Unit and the Deposit Amount. If the Balancing Amount is a positive number (i.e., the net asset value per Creation Unit is more than the Deposit Amount), the Authorized Participant will deliver the Balancing Amount. If the Balancing Amount is a negative number (i.e., the net asset value per Creation Unit is less than the Deposit Amount), the Authorized Participant will receive the Balancing Amount. Payment of any stamp duty or other similar fees and expenses payable upon transfer of beneficial ownership of the Deposit Securities shall be the sole responsibility of the Authorized Participant that purchased the Creation Unit. The Authorized Participant must ensure that all Deposit Securities properly denote change in beneficial ownership.
 
The Adviser makes available through the NSCC on each Business Day, prior to the opening of business on the relevant Exchange (currently 9:30 a.m., Eastern Time), the list of the names and the required number of shares of each Deposit Security to be included in the current Portfolio Deposit (based on information at the end of the previous Business Day) for each Fund. Such Portfolio Securities are applicable, subject to any adjustments as described below, to purchases of Creation Units of a given Fund until such time as the next-announced Deposit Securities composition is made available.
 
The identity and number of shares of the Deposit Securities required for a Portfolio Deposit for each Fund changes pursuant to changes in the composition of the Fund's portfolio and as rebalancing adjustments and corporate action events are reflected from time to time by the Adviser with a view to the investment objective of the Fund. The composition of the Deposit Securities may also change in response to adjustments to the weighting or composition of the securities constituting the Underlying Index.
 
In addition, the Trust reserves the right to permit or require the substitution of an amount of cash (that is a "cash in lieu" amount) to be added to the Cash Component to replace any Deposit Security which may not be available in sufficient quantity
71


for delivery or that may not be eligible for transfer through the systems of DTC or the clearing process or for other similar reasons. The Trust also reserves the right to permit or require a cash in lieu amount where the delivery of Deposit Securities by the Authorized Participant would be restricted under the securities laws or where delivery of Deposit Securities to the Authorized Participant would result in the disposition of Deposit Securities by the Authorized Participant becoming restricted under the securities laws, and in certain other situations. The adjustments described above will reflect changes, known to the Adviser on the date of announcement to be in effect by the time of delivery of the Portfolio Deposit, in the composition of the Underlying Index, or resulting from stock splits and other corporate actions.
 
In addition to the list of names and numbers of securities constituting the current Deposit Securities of a Portfolio Deposit, on each Business Day, the Cash Component effective through and including the previous Business Day, per outstanding Creation Unit of each Fund, will be made available.
 
Role of the Authorized Participant. Creation Units of shares may be purchased only by or through a DTC Participant that has entered into an Authorized Participant Agreement with the Distributor. Such Authorized Participant will agree pursuant to the terms of such Authorized Participant Agreement on behalf of itself or any investor on whose behalf it will act, as the case may be, to certain conditions, including that such Authorized Participant will make available in advance of each purchase of Creation Units an amount of cash sufficient to pay the Cash Component, once the NAV of a Creation Unit is next determined after receipt of the purchase order in proper form, together with the transaction fee described below. The Authorized Participant may require the investor to enter into an agreement with such Authorized Participant with respect to certain matters, including payment of the Cash Component. Investors who are not Authorized Participants must make appropriate arrangements with an Authorized Participant. Investors should be aware that their particular broker may not be a DTC Participant or may not have executed an Authorized Participant Agreement, and that therefore orders to purchase Creation Units may have to be placed by the investor's broker through an Authorized Participant. As a result, purchase orders placed through an Authorized Participant may result in additional charges to such investor. The Trust does not expect to enter into an Authorized Participant Agreement with more than a small number of DTC Participants that have international capabilities. A list of the current Authorized Participants may be obtained from the Distributor.
 
Purchase Order. To initiate an order for a Creation Unit of shares of a Fund, the Authorized Participant must submit to the Distributor an irrevocable order to purchase Shares of a Fund. With respect to a Fund, the Distributor will notify the Adviser and the Custodian of such order. The Custodian will then provide such information to the appropriate local sub-custodian(s). The Custodian shall cause the appropriate local sub-custodian(s) of a Fund to maintain an account into which the Authorized Participant shall deliver, on behalf of itself or the party on whose behalf it is acting, the securities included in the designated Portfolio Deposit (or the cash value of all or a part of such securities, in the case of a permitted or required cash purchase or cash in lieu amount), with any appropriate adjustments as advised by the Trust. Deposit Securities must be delivered to an account maintained at the applicable local sub-custodian. Those placing orders to purchase Creation Units through an Authorized Participant should allow sufficient time to permit proper submission of the purchase order to the Distributor by the cut-off time (as described below) on such Business Day.

The Authorized Participant must also make available on or before the contractual settlement date, by means satisfactory to the Trust, immediately available or same day funds in U.S. dollars estimated by the Trust to be sufficient to pay the Cash Component next determined after acceptance of the purchase order, together with the applicable purchase transaction fee. Any excess funds will be returned following settlement of the issue of the Creation Unit. Those placing orders should ascertain the applicable deadline for cash transfers by contacting the operations department of the broker or depositary institution effectuating the transfer of the Cash Component. This deadline is likely to be significantly earlier than the closing time of the regular trading session on the Exchange.
 
Investors should be aware that an Authorized Participant may require orders for purchases of shares placed with it to be in the particular form required by the individual Authorized Participant.
 
Timing of Submission of Purchase Orders. For the Global X S&P 500® Covered Call ETF, the Global X NASDAQ 100® Covered Call ETF, the Global X Russell 2000 Covered Call ETF, the Global X S&P 500® Covered Call & Growth ETF, the Global X NASDAQ 100® Covered Call & Growth ETF, the Global X S&P 500® Tail Risk ETF, the Global X S&P 500® Risk Managed Income ETF, the Global X S&P 500® Collar 95-110 ETF, the Global X NASDAQ 100® Tail Risk ETF, the Global X NASDAQ 100® Risk Managed Income ETF and the Global X NASDAQ 100® Collar 95-110 ETF, an Authorized Participant must submit an irrevocable purchase order no later than the earlier of (i) 2:00 p.m., Eastern Time or (ii) two hours before the closing time of the trading session on the relevant Fund's Exchange, on any Business Day in order to receive that Business Day's NAV. For all Funds other than the Global X S&P 500® Covered Call ETF, the Global X NASDAQ 100® Covered Call ETF, the Global X Russell 2000 Covered Call ETF, the Global X S&P 500® Covered Call & Growth ETF, the Global X NASDAQ 100® Covered Call & Growth ETF, the Global X S&P 500® Tail Risk ETF, the Global X S&P 500® Risk Managed
72


Income ETF, the Global X S&P 500® Collar 95-110 ETF, the Global X NASDAQ 100® Tail Risk ETF, the Global X NASDAQ 100® Risk Managed Income ETF and the Global X NASDAQ 100® Collar 95-110 ETF, an Authorized Participant must submit an irrevocable purchase order no later than the earlier of (i) 4:00 p.m., Eastern Time or (ii) the closing time of the trading session on the relevant Fund's Exchange, on any Business Day in order to receive that Business Day's NAV.
 
Acceptance of Purchase Order. Subject to the conditions that (i) an irrevocable purchase order has been submitted by the Authorized Participant (either on its own or another investor's behalf) and (ii) arrangements satisfactory to the Trust are in place for payment of the Cash Component and any other cash amounts which may be due, the Trust will accept the order, subject to its right (and the right of the Distributor and the Adviser) to reject any order until acceptance.
 
Once the Trust has accepted an order, upon next determination of the NAV of the shares, the Trust will confirm the issuance of a Creation Unit of the Fund, against receipt of payment, at such NAV. The Distributor will then transmit a confirmation of acceptance to the Authorized Participant that placed the order.

The SEC has expressed the view that a suspension of creations that impairs the arbitrage mechanism applicable to the trading of ETF shares in the secondary market is inconsistent with Rule 6c-11 under the 1940 Act. The SEC’s position does not prohibit the suspension or rejection of creations in all instances. The Trust reserves the right, to the extent consistent with the provisions of Rule 6c-11 under the 1940 Act and the SEC’s position, to reject or revoke acceptance of a purchase order transmitted to it by the Distributor in respect of any Fund including instances in which: (a) the order is not in proper form; (b) the investor(s), upon obtaining the shares ordered, would own 80% or more of the currently outstanding shares of any Fund; (c) the Deposit Securities delivered do not conform to the identify and number of shares disseminated through the facilities of the NSCC for that date by the Adviser, as described above; (d) the acceptance of the Portfolio Deposit would, in the opinion of counsel, be unlawful; or (e) in the event that circumstances outside the control of the Trust, the Distributor and the Adviser make it for all practical purposes impossible to process purchase orders. Examples of such circumstances include acts of God; public service or utility problems resulting in telephone, telecopy or computer failures; fires, floods or extreme weather conditions; market conditions or activities causing trading halts; systems failures involving computer or other informational systems affecting the Trust, the Distributor, DTC, NSCC, the Adviser, the Custodian, a sub-custodian or any other participant in the creation process; and similar extraordinary events. The Trust shall notify a prospective purchaser and/or the Authorized Participant acting on behalf of such person of its rejection of the order of such person. The Trust, the Custodian, any sub-custodian and the Distributor are under no duty, however, to give notification of any defects or irregularities in the delivery of Portfolio Deposits nor shall either of them incur any liability for the failure to give any such notification.
 
Issuance of a Creation Unit. Except as provided herein, a Creation Unit of shares of a Fund will not be issued until the transfer of good title to the Trust of the Deposit Securities and the payment of the Cash Component have been completed. When the applicable local sub-custodian(s) have confirmed to the Custodian that the required securities included in the Portfolio Deposit (or the cash value thereof) have been delivered to the account of the applicable local sub-custodian or sub-custodians, the Distributor and the Adviser shall be notified of such delivery, and the Trust will issue and cause the delivery of the Creation Unit. Creation Units typically are issued on a "T+2 basis" (that is, two Business Days after trade date). However, as discussed in this SAI, the Fund reserves the right to settle redemption transactions and deliver redemption proceeds related to “foreign investments” (i.e., any security, asset or other position of the Fund issued by a foreign issuer that is traded on a trading market outside of the United States) in excess of seven days with settlement as soon as practicable, but in no event later than 15 days after the tender of shares for redemption in order to accommodate local market holidays, or series of consecutive holidays, or the extended delivery cycles for transferring foreign investments.
 
To the extent contemplated by an Authorized Participant's agreement with the Distributor, the Trust will issue Creation Units to such Authorized Participant notwithstanding the fact that the corresponding Portfolio Deposits have not been received in part or in whole, in reliance on the undertaking of the Authorized Participant to deliver the missing Deposit Securities as soon as possible, which undertaking shall be secured by such Authorized Participant's delivery and maintenance of collateral having a value equal to 110%, which the Adviser may change from time to time, of the value of the missing Deposit Securities in accordance with the Trust's then-effective procedures. Such collateral must be delivered no later than 2:00 p.m., Eastern Time, on the contractual settlement date. The only collateral that is acceptable to the Trust is cash in U.S. Dollars or an irrevocable letter of credit in form, and drawn on a bank, that is satisfactory to the Trust. The cash collateral posted by the Authorized Participant may be invested at the risk of the Authorized Participant, and income, if any, on invested cash collateral will be paid to that Authorized Participant. Information concerning the Trust's current procedures for collateralization of missing Deposit Securities is available from the Distributor. The Authorized Participant Agreement will permit the Trust to buy the missing Deposit Securities at any time and will subject the Authorized Participant to liability for any shortfall between the cost to the Trust of purchasing such securities and the cash collateral or the amount that may be drawn under any letter of credit.

73


In certain cases, Authorized Participants will create and redeem Creation Units on the same trade date. In these instances, the Trust reserves the right to settle these transactions on a net basis. All questions as to the number of shares of each security in the Deposit Securities and the validity, form, eligibility and acceptance for deposit of any securities to be delivered shall be determined by the Trust, and the Trust's determination shall be final and binding.

Cash Purchase Method. When cash purchases of Creation Units are available or specified for a Fund, they will be effected in essentially the same manner as in-kind purchases thereof. In addition, the Trust may in its discretion make Creation Units of any of the other funds available for purchase and redemption in U.S. dollars. In the case of a cash purchase, the investor must pay the cash equivalent of the Deposit Securities it would otherwise be required to provide through an in-kind purchase, plus the same Cash Component required to be paid by an in-kind purchaser. In addition, to offset the Trust's brokerage and other transaction costs associated with using the cash to purchase the requisite Deposit Securities, the investor will be required to pay a fixed purchase transaction fee, plus an additional variable charge for cash purchases, which is expressed as a percentage of the value of the Deposit Securities. The transaction fees for in-kind and cash purchases of Creation Units are described below.

Purchase Transaction Fee. A standard creation transaction fee is imposed to offset the transfer, processing and other transaction costs associated with the issuance of Creation Units. The standard creation transaction fee is charged on each Creation Unit created by an Authorized Participant on the day of the transaction. The standard creation transaction fee is generally fixed at the amount shown in the table regardless of the number of Creation Units being purchased, but may be reduced by each Fund if transfer and processing expenses associated with the creation are anticipated to be lower than the stated fee. In the case of cash creations or where a Fund permits or requires an Authorized Participant to substitute cash in lieu of depositing a portion of the Deposit Securities, the Authorized Participant may be assessed an additional variable charge to compensate the Funds for the costs associated with purchasing the applicable securities. As a result, in order to seek to replicate the in-kind creation order process, the Funds expect to purchase, in the secondary market or to otherwise gain exposure to, the portfolio securities that could have been delivered as a result of an in-kind creation order pursuant to local law or market convention, or for other reasons ("Market Purchases"). In such cases where a Fund makes Market Purchases, the Authorized Participant will reimburse the Fund for, among other things, any difference between the market value at the which the securities and/or financial instruments were purchased by the Fund and the cash in lieu amount (which amount, at the Adviser's discretion, may be capped), applicable registration fees, brokerage commissions and certain taxes. The Adviser may adjust the transaction fee to the extent the composition of the creation securities changes or cash in lieu is added to the Cash Component to protect ongoing shareholders. Authorized Participants are also responsible for the costs of transferring the Deposit Securities to the Funds. Investors who use the services of a broker or other financial intermediary to acquire Fund shares may be charged a fee for such services. The following table sets forth each Fund's standard creation transaction fees. The fees may be waived for a Fund until it reaches a certain asset size.
 
 
Fund
 Standard Fee for
In-Kind and
Cash Purchases
Global X MSCI Colombia ETF $1,500
Global X MSCI China Consumer Discretionary ETF $3,500
Global X MSCI China Industrials ETF $2,100
Global X MSCI China Communication Services ETF $800
Global X MSCI China Financials ETF $4,500
Global X MSCI China Energy ETF $800
Global X MSCI China Materials ETF $1,500
Global X MSCI Norway ETF $1,200
Global X FTSE Southeast Asia ETF $2,100
Global X MSCI Argentina ETF $500
Global X MSCI Greece ETF $500
Global X MSCI Nigeria ETF $2,000
Global X MSCI Next Emerging & Frontier ETF $9,500
Global X MSCI Portugal ETF $700
Global X DAX Germany ETF $500
Global X MSCI Pakistan ETF $2,800
Global X MSCI China Consumer Staples ETF $1,300
Global X MSCI China Health Care ETF $1,400
Global X MSCI China Information Technology ETF $1,900
74


 
 
Fund
 Standard Fee for
In-Kind and
Cash Purchases
Global X MSCI China Real Estate ETF $1,200
Global X MSCI China Utilities ETF $1,000
Global X MSCI Vietnam ETF $1,000
Global X Copper Miners ETF $600
Global X Silver Miners ETF $500
Global X Gold Explorers ETF $1,000
Global X Uranium ETF $500
Global X Lithium & Battery Tech ETF $1,500
Global X SuperDividend® ETF
$2,000
Global X Social Media ETF $300
Global X Guru® Index ETF
$250
Global X SuperIncome™ Preferred ETF $300
Global X SuperDividend® U.S. ETF
$150
Global X S&P 500® Covered Call ETF
$2,000
Global X NASDAQ 100® Covered Call ETF
$500
Global X MSCI SuperDividend® Emerging Markets ETF
$1,600
Global X SuperDividend® REIT ETF
$250
Global X Renewable Energy Producers ETF $800
Global X S&P 500® Catholic Values ETF
$1,300
Global X MSCI SuperDividend® EAFE ETF
$1,000
Global X E-commerce ETF $500
Global X Russell 2000 Covered Call ETF $250
Global X S&P Catholic Values Developed ex-U.S. ETF $8,900
Global X Nasdaq 100® Covered Call & Growth ETF
$500
Global X S&P 500® Covered Call & Growth ETF
$1,500
Global X Emerging Markets Internet & E-commerce ETF $800
Global X S&P 500® Tail Risk ETF
$2,000
Global X S&P 500® Risk Managed Income ETF
$2,000
Global X S&P 500® Collar 95-110 ETF
$2,000
Global X NASDAQ 100® Tail Risk ETF
$500
Global X NASDAQ 100® Risk Managed Income ETF
$500
Global X NASDAQ 100® Collar 95-110 ETF
$500
Global X Disruptive Materials ETF $800
Global X S&P Catholic Values U.S. Aggregate Bond ETF $300


REDEMPTION OF CREATION UNITS
 
Shares of a Fund may be redeemed only in Creation Units at its NAV next determined after receipt of a redemption request in proper form by the Distributor. The Trust will not redeem shares in amounts less than Creation Units. Beneficial owners also may sell Shares in the secondary market, but must accumulate enough Shares to constitute a Creation Unit in order to have such Shares redeemed by the Trust. There can be no assurance, however, that there will be sufficient liquidity in the public trading market at any time to permit assembly of a Creation Unit. Investors should expect to incur brokerage and other costs in connection with assembling a sufficient number of Shares to constitute a redeemable Creation Unit.
 
With respect to each Fund the Adviser makes available through the NSCC prior to the opening of business on the Exchange (currently 9:30 a.m., Eastern Time) on each Business Day, the identity and number of shares that will be applicable (subject to possible amendment or correction) to redemption requests received in proper form (as defined below) on that day ("Portfolio Securities"). Portfolio Securities received on redemption may not be identical to Deposit Securities that are applicable to
75


creation of Creation Units. Unless cash redemptions are available or specified for a Fund, the redemption proceeds for a Creation Unit generally consist of Portfolio Securities on the Business Day of the request for redemption, plus cash in an amount equal to the difference between the NAV of the shares being redeemed, as next determined after a receipt of a request in proper form, and the value of the Portfolio Securities, less the redemption transaction fee described below. The redemption transaction fee described below is deducted from such redemption proceeds.

A fixed redemption transaction fee payable to the custodian is imposed on each redemption transaction. Redemptions of Creation Units for cash are required to pay an additional variable charge to compensate the relevant Fund for brokerage and market impact expenses relating to disposing of portfolio securities. The redemption transaction fee for redemptions in-kind and for cash and the additional variable charge for cash redemptions (when cash redemptions are available or specified) are listed in the table below. Investors will also bear the costs of transferring the Portfolio Deposit from the Trust to their account or on their order. Investors who use the services of a broker or other such intermediary may be charged a fee for such services.
 
 
Fund
 Standard Fee for
In-Kind and
Cash Redemptions
Maximum Additional Variable Charge
for Cash Redemptions*
Global X MSCI Colombia ETF $1,500 2%
Global X MSCI China Consumer Discretionary ETF $3,500 2%
Global X MSCI China Industrials ETF $2,100 2%
Global X MSCI China Communication Services ETF $800 2%
Global X MSCI China Financials ETF $4,500 2%
Global X MSCI China Energy ETF $800 2%
Global X MSCI China Materials ETF $1,500 2%
Global X MSCI Norway ETF $1,200 2%
Global X FTSE Southeast Asia ETF $2,100 2%
Global X MSCI Argentina ETF $500 2%
Global X MSCI Greece ETF $500 2%
Global X MSCI Nigeria ETF $2,000 2%
Global X MSCI Next Emerging & Frontier ETF $9,500 2%
Global X MSCI Portugal ETF $700 2%
Global X DAX Germany ETF $500 2%
Global X MSCI Pakistan ETF $2,800 2%
Global X MSCI China Consumer Staples ETF $1,300 2%
Global X MSCI China Health Care ETF $1,400 2%
Global X MSCI China Information Technology ETF $1,900 2%
Global X MSCI China Real Estate ETF $1,200 2%
Global X MSCI China Utilities ETF $1,000 2%
Global X MSCI Vietnam ETF $1,000 2%
Global X Copper Miners ETF $600 2%
Global X Silver Miners ETF $500 2%
Global X Gold Explorers ETF $1,000 2%
Global X Uranium ETF $500 2%
Global X Lithium & Battery Tech ETF $1,500 2%
Global X SuperDividend® ETF
$2,000 2%
Global X Social Media ETF $300 2%
Global X Guru® Index ETF
$250 2%
Global X SuperIncome™ Preferred ETF $300 2%
Global X SuperDividend® U.S. ETF
$150 2%
Global X S&P 500® Covered Call ETF
$2,000 2%
Global X NASDAQ 100® Covered Call ETF
$500 2%
Global X MSCI SuperDividend® Emerging Markets ETF
$1,600 2%
Global X SuperDividend® REIT ETF
$250 2%
76


 
 
Fund
 Standard Fee for
In-Kind and
Cash Redemptions
Maximum Additional Variable Charge
for Cash Redemptions*
Global X Renewable Energy Producers ETF $800 2%
Global X S&P 500® Catholic Values ETF
$1,300 2%
Global X MSCI SuperDividend® EAFE ETF
$1,000 2%
Global X E-commerce ETF $500 2%
Global X Russell 2000 Covered Call ETF $250 2%
Global X S&P Catholic Values Developed ex-U.S. ETF $8,900 2%
Global X Nasdaq 100® Covered Call & Growth ETF
$500 2%
Global X S&P 500® Covered Call & Growth ETF
$1,500 2%
Global X Emerging Markets Internet & E-commerce ETF $800 2%
Global X S&P 500® Tail Risk ETF
$2,000 2%
Global X S&P 500® Risk Managed Income ETF
$2,000 2%
Global X S&P 500® Collar 95-110 ETF
$2,000 2%
Global X NASDAQ 100® Tail Risk ETF
$500 2%
Global X NASDAQ 100® Risk Managed Income ETF
$500 2%
Global X NASDAQ 100® Collar 95-110 ETF
$500 2%
Global X Disruptive Materials ETF $800 2%
Global X S&P Catholic Values U.S. Aggregate Bond ETF $300 2%

*    As a percentage of the net asset value per Creation Unit, inclusive of the standard redemption transaction fee.
 
Redemption requests in respect of Creation Units must be submitted to the Distributor by or through an Authorized Participant. Investors other than Authorized Participants are responsible for making arrangements for a redemption request through an Authorized Participant. For the Global X S&P 500® Covered Call ETF, the Global X NASDAQ 100® Covered Call ETF, the Global X Russell 2000 Covered Call ETF, the Global X S&P 500® Covered Call & Growth ETF, the Global X NASDAQ 100® Covered Call & Growth ETF, the Global X S&P 500® Tail Risk ETF, the Global X S&P 500® Risk Managed Income ETF, the Global X S&P 500® Collar 95-110 ETF, the Global X NASDAQ 100® Tail Risk ETF, the Global X NASDAQ 100® Risk Managed Income ETF and the Global X NASDAQ 100® Collar 95-110 ETF, an Authorized Participant must submit an irrevocable redemption request no later than the earlier of (i) 2:00 p.m., Eastern Time or (ii) two hours prior to the closing time of the trading session on the relevant Fund's Exchange, on any Business Day in order to receive that Business Day's NAV. For all Funds other than the Global X S&P 500® Covered Call ETF, the Global X NASDAQ 100® Covered Call ETF, the Global X Russell 2000 Covered Call ETF, the Global X S&P 500® Covered Call & Growth ETF, the Global X NASDAQ 100® Covered Call & Growth ETF, the Global X S&P 500® Tail Risk ETF, the Global X S&P 500® Risk Managed Income ETF, the Global X S&P 500® Collar 95-110 ETF, the Global X NASDAQ 100® Tail Risk ETF, the Global X NASDAQ 100® Risk Managed Income ETF and the Global X NASDAQ 100® Collar 95-110 ETF, an Authorized Participant must submit an irrevocable redemption request no later than the earlier of (i) 4:00 p.m., Eastern Time or (ii) the closing time of the trading session on the relevant Fund's Exchange, on any Business Day in order to receive that Business Day's NAV.
 
The Distributor will provide a list of current Authorized Participants upon request. The Authorized Participant must transmit the request for redemption, in the form required by the Trust, to the Distributor in accordance with procedures set forth in the Authorized Participant Agreement. Investors should be aware that their particular broker may not have executed an Authorized Participant Agreement, and that, therefore, requests to redeem Creation Units may have to be placed by the investor's broker through an Authorized Participant who has executed an Authorized Participant Agreement. At any given time there will be only a limited number of broker-dealers that have executed an Authorized Participant Agreement. Investors making a redemption request should be aware that such request must be in the form specified by such Authorized Participant. Investors making a request to redeem Creation Units should allow sufficient time to permit proper submission of the request by an Authorized Participant and transfer of the shares to the Trust's Transfer Agent; such investors should allow for the additional time that may be required to effect redemptions through their banks, brokers or other financial intermediaries if such intermediaries are not Authorized Participants.
 
Orders to redeem Creation Unit Aggregations of Funds based on foreign indexes must be delivered through an Authorized Participant that has executed an Authorized Participant Agreement. Investors other than Authorized Participants are responsible for making arrangements for a redemption request to be made through an Authorized Participant. An order to redeem Creation Unit Aggregations of a Fund is deemed received by the Trust on the Business Day if: (i) such order is received by the Fund's
77


distributor not later than the closing time of the applicable Exchange on the applicable Business Day; (ii) such order is accompanied or followed by the requisite number of Shares of the Fund specified in such order, which delivery must be made through DTC to the Fund's custodian no later than 10:00 a.m., Eastern Time, on the next Business Day following the day the order was transmitted; and (iii) all other procedures set forth in the Authorized Participant Agreement are properly followed. Deliveries of Fund securities to redeeming investors generally will be made within two Business Days. Due to the schedule of holidays in certain countries, however, the delivery of in-kind redemption proceeds for a Fund may take longer than two Business Days after the day on which the redemption request is received in proper form. In such cases, settlement will occur as soon as practicable, but in any event no longer than fifteen days after the tender of Shares is received in proper form.

A redemption request is considered to be in "proper form" if (i) an Authorized Participant has transferred or caused to be transferred to the Trust's Transfer Agent the Creation Unit of Shares being redeemed through the book-entry system of DTC so as to be effective by the relevant Exchange closing time on any Business Day and (ii) a request in form satisfactory to the Trust is received by the Distributor from the Authorized Participant on behalf of itself or another redeeming investor within the time periods specified above. If the Transfer Agent does not receive the investor's shares through DTC's facilities by 10:00 a.m., Eastern Time, on the Business Day next following the day that the redemption request is received, the redemption request shall be rejected. Investors should be aware that the deadline for such transfers of Shares through the DTC system may be significantly earlier than the close of business on the relevant Exchange. Those making redemption requests should ascertain the deadline applicable to transfers of shares through the DTC system by contacting the operations department of the broker or depositary institution effecting the transfer of the shares.
 
Upon receiving a redemption request, the Distributor shall notify the Trust and the Trust's Transfer Agent of such redemption request. The tender of an investor's Shares for redemption and the distribution of the cash redemption payment in respect of Creation Units redeemed will be effected through DTC and the relevant Authorized Participant to the beneficial owner thereof as recorded on the book-entry system of DTC or the DTC Participant through which such investor holds, as the case may be, or by such other means specified by the Authorized Participant submitting the redemption request.
 
In connection with taking delivery of shares of Portfolio Securities upon redemption of shares of a Fund, a redeeming Beneficial Owner, or Authorized Participant acting on behalf of such Beneficial Owner, must maintain appropriate security arrangements with a qualified broker-dealer, bank or other custody providers in each jurisdiction in which any of the Portfolio Securities are customarily traded, to which account such Portfolio Securities will be delivered.
 
Deliveries of redemption proceeds by a Fund generally will be made within two Business Days (that is "T+2"). However, the Fund reserves the right, including under stressed market conditions, to take up to seven days after the receipt of a redemption request to pay an Authorized Participant, all as permitted by the 1940 Act. The Fund further reserves the right to settle redemption transactions and deliver redemption proceeds related to foreign investments in excess of seven days with settlement as soon as practicable, but in no event later than 15 days after the tender of shares for redemption in order to accommodate local market holidays, or series of consecutive holidays, or the extended delivery cycles for transferring foreign investments. The ability of the Trust to effect in-kind creations and redemptions within two business days of receipt of an order in good form is subject, among other things, to the condition that, within the time period from the date of the order to the date of delivery of the securities, there are no days that are holidays in the applicable foreign market. For every occurrence of one or more intervening holidays in the applicable foreign market that are not holidays observed in the U.S. equity market, the redemption settlement cycle will be extended by the number of such intervening holidays, subject to a maximum of 15 days as permitted by rule. In addition to holidays, other unforeseeable closings in a foreign market due to emergencies may also prevent the Trust from delivering securities within the normal settlement period. The securities delivery cycles currently practicable for transferring portfolio securities to redeeming investors, coupled with foreign market holiday schedules, will require a delivery process longer than seven calendar days in certain circumstances.

If neither the redeeming Beneficial Owner nor the Authorized Participant acting on behalf of such redeeming Beneficial Owner has appropriate arrangements to take delivery of the portfolio securities in the applicable jurisdiction and it is not possible to make other such arrangements, or if it is not possible to effect deliveries of the Portfolio Securities in such jurisdiction, the Trust may in its discretion redeem such shares in cash (i.e., U.S. dollars or non U.S. currency), and the redeeming Beneficial Owner will be required to receive its redemption proceeds in cash. In addition, an investor may request a redemption in cash that the Trust may, in its sole discretion, permit. In either case, the investor will receive a cash payment equal to the net asset value of its Shares based on the NAV of shares of the relevant Fund next determined after the redemption request is received in proper form (minus a redemption transaction fee and additional variable charge for cash redemptions specified above, to offset the Trust's brokerage and other transaction costs associated with the disposition of Portfolio Securities). The Trust may also, in its sole discretion, upon request of a shareholder, provide such redeemer a portfolio of securities that differ from the exact composition of the Portfolio Securities but does not differ in NAV. Redemptions of shares for Deposit Securities will be subject to compliance with applicable U.S. federal and state securities laws and each Fund (whether or not it otherwise permits cash
78


redemptions) reserves the right to redeem Creation Units for cash to the extent that the Fund could not lawfully deliver specific Deposit Securities upon redemptions or could not do so without first registering the Deposit Securities under such laws.

In the event that cash redemptions are permitted or required by the Trust, proceeds will be paid to the Authorized Participant redeeming shares on behalf of the redeeming investor as soon as practicable after the date of redemption (within seven calendar days thereafter, except for the instances involving foreign investments in which payment may be delayed in order to accommodate local market holidays, or series of consecutive holidays, or the extended delivery cycles for transferring foreign investments. In such instances, the Fund reserves the right to settle redemption transactions and deliver redemption proceeds as soon as practicable, but in no event later than 15 days after the tender of shares for redemption.

To the extent contemplated by an Authorized Participant's agreement with the Distributor, in the event the Authorized Participant that has submitted a redemption request in proper form is unable to transfer all or part of the Creation Units to be redeemed to the Trust, at or prior to 10:00 a.m., Eastern Time, on the Business Day after the date of submission of such redemption request, the Distributor will nonetheless accept the redemption request in reliance on the undertaking by the Authorized Participant to deliver the missing shares as soon as possible. Such undertaking shall be secured by the Authorized Participant's delivery and maintenance of collateral consisting of cash having a value equal to 110%, which the Adviser may change from time to time, of the value of the missing shares in accordance with the Trust's then-effective procedures. The only collateral that is acceptable to the Trust is cash in U.S. dollars or an irrevocable letter of credit in form, and drawn on a bank, that is satisfactory to the Trust. The Trust's current procedures for collateralization of missing shares require, among other things, that any cash collateral shall be held by the Trust's custodian, and that the fees of the custodian and any sub-custodians in respect of the delivery, maintenance and redelivery of the cash collateral shall be payable by the Authorized Participant. The cash collateral posted by the Authorized Participant may be invested at the risk of the Authorized Participant, and income, if any, on invested cash collateral will be paid to that Authorized Participant. The Authorized Participant Agreement permits the Trust to purchase the missing shares or acquire the portfolio securities and the Cash Component underlying such shares at any time and subjects the Authorized Participant to liability for any shortfall between the cost to the Trust of purchasing such shares, Portfolio Securities or Cash Component and the cash collateral or the amount that may be drawn under any letter of credit.

Because the portfolio securities of a Fund may trade on the relevant Exchange(s) on days that the Exchange is closed or are otherwise not Business Days for such Fund, shareholders may not be able to redeem their shares of such Fund, or to purchase or sell shares of such Fund on the Exchange, on days when the NAV of such Fund could be significantly affected by events in the relevant foreign markets.
 
The right of redemption may be suspended or the date of payment postponed with respect to any Fund (1) for any period during which the Exchange is closed (other than customary weekend and holiday closings); (2) for any period during which trading on the Exchange is suspended or restricted; (3) for any period during which an emergency exists as a result of which disposal of the shares of the Fund's portfolio securities or determination of its net asset value is not reasonably practicable; or (4) in such other circumstance as is permitted by the SEC.
 
TAXES
 
The following summarizes certain additional tax considerations generally affecting the Funds and their shareholders that are not described in the Prospectus. No attempt is made to present a detailed explanation of the tax treatment of the Funds or their shareholders, and the discussions here and in the Prospectus are not intended as a substitute for careful tax planning. Potential investors should consult their tax advisers with specific reference to their own tax situations.
 
The discussions of the federal tax consequences in the Prospectus and this SAI are based on the Code and the regulations, rulings and decisions under it, as in effect on the date of this SAI. Future legislative or administrative changes or court decisions may significantly change the statements included herein, and any such changes or decisions may have a retroactive effect with respect to the transactions contemplated herein. This discussion does not address all aspects of U.S. federal income taxation that may be relevant to shareholders in light of their particular circumstances or to shareholders subject to special treatment under U.S. federal income tax laws (e.g., certain financial institutions, insurance companies, dealers in stock or securities, tax-exempt organizations, persons who have entered into hedging transactions with respect to Shares of a Fund, persons who borrow in order to acquire Shares, and certain foreign taxpayers). Furthermore, this discussion does not reflect possible application of the alternative minimum tax ("AMT"). Unless otherwise noted, this discussion assumes Shares of each Fund are held by U.S. shareholders and that such Shares are held as capital assets. No representation is made as to the tax consequences of the operation of any Fund.

U.S. SHAREHOLDER
79


 
A U.S. shareholder is a beneficial owner of Shares of a Fund that is for U.S. federal income tax purposes:
 
a citizen or individual resident of the United States (including certain former citizens and former long-term residents);
 
a domestic corporation or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state thereof or the District of Columbia;
 
an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
 
a trust if a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of its substantial decisions or the trust has made a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.
 
A "Non-U.S. shareholder" is a beneficial owner of Shares of a Fund that is an individual, corporation, trust or estate and is not a U.S. shareholder. If a partnership (including any entity treated as a partnership for U.S. federal income tax purposes) holds Shares of a Fund, the tax treatment of a partner in the partnership generally depends upon the status of the partner and the activities of the partnership. A prospective shareholder who is a partner of a partnership holding Shares should consult its tax advisors with respect to the purchase, ownership and disposition of its Shares.

FUND TAXATION
 
Each Fund is treated as a separate corporation for federal income tax purposes. Losses in one fund do not offset gains in another fund and the requirements (other than certain organizational requirements) for qualifying for regulated investment company status as described below are determined at the Fund level rather than the Trust level.

Each Fund has elected and intends to qualify as a regulated investment company ("RIC") under Subchapter M of Subtitle A, Chapter 1, of the Code. As a RIC, each Fund generally will be exempt from federal income tax on its net investment income and realized capital gains that it distributes to shareholders, provided that it distributes an amount equal to at least the sum of 90% of its tax-exempt income and 90% of its investment company taxable income (net investment income and the excess of net short-term capital gain over net long-term capital loss), if any, for the year (the "Distribution Requirement") and satisfies certain other requirements of the Code that are described below. Each Fund intends to make sufficient distributions or deemed distributions each year to avoid liability for corporate income tax. If a Fund were to fail to make sufficient distributions, it could be liable for corporate income tax and for excise tax in respect of the shortfall or, if the shortfall is large enough, such Fund could be disqualified as a RIC.

In addition to satisfaction of the Distribution Requirement, a Fund must derive with respect to a taxable year at least 90% of its gross income from dividends, interest, certain payments with respect to securities loans and gains from the sale or other disposition of stock or securities or foreign currencies, or from other income derived with respect to its business of investing in such stock, securities, or currencies or net income derived from an interest in a qualified publicly traded partnership (the "Income Requirement"). A "qualified publicly traded partnership" ("QPTP") is generally defined as a publicly traded partnership under Section 7704 of the Code, which is generally a partnership the interests in which are "traded on an established securities market" or are "readily tradable on a secondary market (or the substantial equivalent thereof)". However, for these purposes, a QPTP does not include a publicly traded partnership if 90% or more of its income is as described above.
  
Also, at the close of each quarter of its taxable year, at least 50% of the value of a Fund's assets must consist of cash and cash items, U.S. government securities, securities of other regulated investment companies and securities of other issuers (as to which the Fund does not hold more than 5% of the value of its total assets in securities of such issuer and as to which the Fund does not hold more than 10% of the outstanding voting securities (including securities of a QPTP of such issuer), and no more than 25% of the value of the Fund's total assets may be invested in the securities of (i) any one issuer (other than U.S. government securities and securities of other regulated investment companies), (ii) two or more issuers which such Fund controls and which are engaged in the same or similar trades or businesses or (iii) one or more QPTPs (the "Asset Diversification Requirement"). Each Fund intends to comply with these requirements.

If a RIC fails this asset-diversification test, such RIC, in addition to other cure provisions previously permitted, has a 6-month period to correct any failure without incurring a penalty if such failure is "de minimis," meaning that the failure does not exceed the lesser of 1% of the RIC's assets, or $10 million.

80


If for any taxable year a Fund does not qualify as a RIC, all of its taxable income will be subject to tax at the corporate income tax rate without any deduction for distributions to shareholders. In such event, the shareholders would recognize dividend income on distributions to the extent of such Fund's current and accumulated earnings and profits. Failure to qualify as a regulated investment company would thus have a negative impact on the Fund's income and performance. Subject to savings provisions for certain failures to satisfy the Income Requirement or Asset Diversification Requirement, which, in general, are limited to those due to reasonable cause and not willful neglect, it is possible that the Fund will not qualify as a regulated investment company in any given tax year. Even if such savings provisions apply, the Fund may be subject to a monetary sanction of $50,000 or more.
 
The Code imposes a nondeductible 4% excise tax on regulated investment companies that fail to currently distribute an amount equal to specified percentages of their ordinary taxable income and capital gain net income (excess of capital gains over capital losses). Each Fund intends to make sufficient distributions or deemed distributions of its ordinary taxable income and capital gain net income each calendar year to avoid liability for this excise tax.
 
Each Fund intends to distribute annually to its shareholders all or substantially all of its investment company taxable income, and any net realized long-term capital gains in excess of net realized short-term capital losses (including any capital loss carryovers). However, if a Fund retains for investment an amount equal to all or a portion of its net long-term capital gains in excess of its net short-term capital losses (including any capital loss carryovers), it will be subject to a corporate tax on the amount retained. In that event, a Fund may designate such retained amounts as undistributed capital gains in a notice to its shareholders who (a) will be required to include in income for U.S. federal income tax purposes, as long-term capital gains, their proportionate shares of the undistributed amount, (b) will be entitled to credit their proportionate shares of the tax paid by the Fund on the undistributed amount against their U.S. federal income tax liabilities, if any, and to claim refunds to the extent their credits exceed their liabilities, if any, and (c) will be entitled to increase their tax basis, for U.S. federal income tax purposes, in their Shares by an amount equal to the difference between the amount of undistributed capital gains included in the shareholder's income and the tax deemed paid by the shareholder. Organizations or persons not subject to U.S. federal income tax on such capital gains will be entitled to a refund of their pro rata share of such taxes paid by such Fund upon filing appropriate returns or claims for refund with the Internal Revenue Service ("IRS").

Investors considering buying shares just prior to a dividend or capital gain distribution should be aware that, although the price of Shares just purchased at that time may reflect the amount of the forthcoming distribution, such dividend or distribution may nevertheless be taxable to them. If a Fund is the holder of record of any stock on the record date for any dividends payable with respect to such stock, such dividends will be included in such Fund's gross income not as of the date received but as of the later of (a) the date such stock became ex-dividend with respect to such dividends (that is, the date on which a buyer of the stock would not be entitled to receive the declared, but unpaid, dividends) or (b) the date such Fund acquired such stock. Accordingly, to satisfy its income distribution requirements, a Fund may be required to pay dividends based on anticipated earnings, and shareholders may receive dividends in an earlier year than would otherwise be the case.

For investors that hold their Fund Shares in a taxable account, a high portfolio turnover rate may result in higher taxes. This is because a Fund with a high turnover rate is likely to accelerate the recognition of capital gains and more of such gains are likely to be taxable as short-term rather than long-term capital gains in contrast to a comparable fund with a low turnover rate. Any such higher taxes would reduce the Fund’s after-tax performance.

A RIC is permitted to carry forward net capital losses to offset capital gains realized in later years, and the losses carried forward retain their original character as either long-term or short-term losses.

SECTIONS 351 AND 362
 
The Trust on behalf of each Fund has the right to reject an order for a purchase of Shares of a Fund if the purchaser (or group of purchasers) would, upon obtaining the Shares so ordered, own 80% or more of the outstanding Shares of the Fund and if, pursuant to Sections 351 and 362 of the Code, the Fund would have a basis in the securities different from the market value of such securities on the date of deposit. If a Fund's basis in such securities on the date of deposit was less than market value on such date, such Fund, upon disposition of the securities, would recognize more taxable gain or less taxable loss than if its basis in the securities had been equal to market value. It is not anticipated that the Trust will exercise the right of rejection except in a case where the Trust determines that accepting the order could result in material adverse tax consequences to a Fund or its shareholders. The Trust also has the right to require information necessary to determine deemed and beneficial share ownership for purposes of the 80% determination.

FOREIGN TAXES
 
81


It is expected that certain income of the Funds will be subject to foreign withholding taxes and other taxes imposed by countries in which the Funds invest. If a Fund is liable for foreign income taxes, including such withholding taxes and more than 50% of the value of a Fund's total assets at the close of the taxable year consists of stock or securities of foreign corporations, such Fund may file an election with the IRS to "pass through" to the Fund's shareholders the amount of foreign income taxes paid by the Fund. The Funds expect to be able to make this election, though no assurance can be given that they will be able to do so. Pursuant to this election, a shareholder (a) will include in gross income (in addition to taxable dividends actually received) the shareholder's pro rata share of the foreign income taxes paid by a Fund; (b) will treat the shareholder's pro rata share of such foreign income taxes as having been paid by the shareholder; and (c) may, subject to certain limitations, be entitled either to deduct the shareholder's pro rata share of such foreign income taxes in computing the shareholder's taxable income or to use it as a foreign tax credit against U.S. income taxes. Shortly after any year for which a Fund makes such a pass-through election, the Fund will report to its shareholders, in writing, the amount per Share of such foreign tax that must be included in each shareholder's gross income and the amount which will be available for deduction or credit.

If a Fund does not make the election, any foreign taxes paid or accrued will represent an expense to such Fund, which will reduce its net investment income. Absent this election, shareholders will not be able to claim either a credit or deduction for their pro rata shares of such taxes paid by the Fund, nor will shareholders be required to treat their pro rata shares of such taxes as amounts distributed to them.

The rules governing foreign tax credits are complex and, therefore, shareholders should consult their own tax advisors regarding the availability of foreign tax credits in their particular circumstances.

TAXATION OF FUND DISTRIBUTIONS

Distributions. Distributions by a Fund of its net short-term capital gains will be taxable as ordinary income. Distributions of net realized long-term capital gains, if any, that a Fund designates as capital gains dividends are taxable as long-term capital gains, whether paid in cash or in shares and regardless of how long a shareholder has held shares of such Fund. All other dividends of a Fund (including dividends from short-term capital gains) from its current and accumulated earnings and profits ("regular dividends") are generally subject to tax as ordinary income except as described below for qualified dividends.

Return of Capital. Distributions in excess of a Fund's current and accumulated earnings and profits will, as to each shareholder, be treated as a tax-free return of capital to the extent of a shareholder's basis in his shares of such Fund, and as a capital gain thereafter (if the shareholder holds his Shares of such Fund as capital assets). Shareholders receiving dividends or distributions in the form of additional Shares should be treated for U.S. federal income tax purposes as receiving a distribution in an amount equal to the amount of money that the shareholders receiving cash dividends or distributions will receive, and should have a cost basis in the Shares received equal to such amount. Dividends paid by a Fund that are attributable to dividends received by the Fund from domestic corporations may qualify for the federal dividends-received deduction for corporations.

Extraordinary Dividends. If an individual, trust or estate receives a regular dividend or qualified dividends qualifying for the long-term capital gains rates and such dividend constitutes an "extraordinary dividend," and the individual subsequently recognizes a loss on the sale or exchange of stock in respect of which the extraordinary dividend was paid, then the loss will be long-term capital loss to the extent of such extraordinary dividend. An extraordinary dividend on common stock for this purpose is generally a dividend (i) in an amount greater than or equal to 10% of the taxpayer's tax basis (or trading value) in a share of stock, aggregating dividends with ex-dividend dates within an 85-day period or (ii) in an amount greater than 20% of the taxpayer's tax basis (or trading value) in a share of stock, aggregating dividends with ex-dividend dates within a 365-day period.

Qualified Dividend Income. Distributions by a Fund of investment company taxable income (excluding any short-term capital gains) whether received in cash or shares will be taxable either as ordinary income or as qualified dividend income, eligible for the reduced maximum rate to individuals of 20% to the extent the Fund receives qualified dividend income on the securities it holds and the Fund designates the distribution as qualified dividend income. Qualified dividend income is, in general, dividend income from taxable domestic corporations and certain foreign corporations (e.g., foreign corporations incorporated in a possession of the United States or in certain countries with a comprehensive tax treaty with the United States, or the stock of which is readily tradable on an established securities market in the United States). A dividend will not be treated as qualified dividend income to the extent that (i) the shareholder has not held the shares on which the dividend was paid for more than 60 days during the 121-day period that begins on the date that is 60 days before the date on which the shares become ex dividend with respect to such dividend (and the Fund also satisfies those holding period requirements with respect to the securities it holds that paid the dividends distributed to the shareholder), (ii) the shareholder is under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to substantially similar or related property, or (iii) the shareholder elects to treat such dividend as investment income under section 163(d)(4)(B) of the Code.
82



Qualified REIT Dividends and Income from QPTPs. Under the 2017 Tax Cuts and Jobs Act, "qualified REIT dividends" (i.e., ordinary REIT dividends other than capital gain dividends and portions of REIT dividends designated as qualified dividend income) are treated as eligible for a 20% deduction by noncorporate taxpayers. This deduction, if allowed in full, equates to a maximum effective tax rate of 29.6% (37% top rate applied to income after 20% deduction). A Fund may choose to report the special character of "qualified REIT dividends". A noncorporate shareholder receiving such dividends would treat them as eligible for the 20% deduction, provided Fund shares were held by the shareholder for more than 45 days during the 91-day period beginning on the date that is 45 days before the date on which the shares become ex-dividend with respect to such dividend). The amount of a RIC's dividends eligible for the 20% deduction for a taxable year is limited to the excess of the RIC's qualified REIT dividends for the taxable year over allocable expenses. The IRS continues to study whether conduit treatment of income from QPTPs (income from MLPs) for purposes of the 20% deduction by noncorporate taxpayers is appropriate in the context of publicly traded partnerships.

Corporate Dividends-Received Deduction. A Fund's dividends that are paid to its corporate shareholders and are attributable to qualifying dividends it received from U.S. domestic corporations may be eligible, in the hands of such shareholders, for the corporate dividends-received deduction, subject to certain holding period requirements and debt financing limitations.

Medicare Tax. Certain U.S. shareholders, including individuals and estates and trusts, are subject to an additional 3.8% Medicare tax on all or a portion of their "net investment income," which includes dividends from a Fund and net gains from the disposition of shares of a Fund. U.S. shareholders are urged to consult their own tax advisors regarding the implications of the additional Medicare tax resulting from an investment in a Fund.

EXCESS INCLUSION INCOME
 
Certain types of income received by a Fund from REITs, real estate mortgage investment conduits ("REMICs"), taxable mortgage pools ("TMPs") or other investments may cause a Fund to designate some or all of its distributions as "excess inclusion income." Such excess inclusion income may (1) constitute taxable income, as "unrelated business taxable income" ("UBTI") for Fund shareholders who would otherwise be tax-exempt, such as individual retirement accounts, 401(k) accounts, Keogh plans, pension plans and certain charitable entities; (2) as UBTI, cause a charitable remainder trust to be subject to a 100% excise tax on its UBTI; (3) not be offset against net operating losses for tax purposes; (4) not be eligible for reduced U.S. withholding for non-U.S. shareholders even from tax treaty countries; and (5) cause a Fund to be subject to tax if certain "disqualified organizations" as defined by the Code are Fund shareholders.

TAXATION OF INCOME FROM CERTAIN FINANCIAL INSTRUMENTS AND PFICS
 
The tax principles applicable to transactions in financial instruments and futures contracts and options that may be engaged in by a Fund including the effect of fluctuations in the value of foreign currencies, and investments in passive foreign investment companies, are complex and, in some cases, uncertain. Such transactions and investments may cause a Fund to recognize taxable income prior to the receipt of cash, thereby requiring such Fund to liquidate other positions, or to borrow money, so as to make sufficient distributions to shareholders to avoid corporate-level tax. Moreover, some or all of the taxable income recognized may be ordinary income or short-term capital gain, so that the distributions may be taxable to shareholders as ordinary income.
 
Options, Futures, Forward Contracts, Swap Agreements, Hedges, Straddles and Other Transactions. In general, option premiums received by a Fund are not immediately included in the income of the Fund. Instead, the premiums are recognized (i) when the option contract expires, (ii) the option is exercised by the holder, or (iii) the Fund transfers or otherwise terminates the option (e.g., through a closing transaction). If a call option written by a Fund is exercised and the Fund sells or delivers the underlying stock, the Fund generally will recognize capital gain or loss equal to (a) sum of the strike price and the option premium received by the Fund minus (b) a Fund's basis in the stock. Such gain or loss generally will be short-term or long-term depending upon the holding period of the underlying stock. If securities are purchased by a Fund pursuant to the exercise of a put option written by it, the Fund generally will subtract the premium received for purposes of computing its cost basis in the securities purchased. The gain or loss that may arise in respect of any termination of a Fund's obligation under an option other than through the exercise of the option will be short-term gain or loss, depending on whether the premium income received by the Fund is greater or less than the amount paid by the Fund (if any) in terminating the transaction. Thus, for example, if an option written by a Fund expires unexercised, the Fund generally will recognize short-term gain equal to the premium received.
 
Certain covered call writing activities of a Fund may trigger the U.S. federal income tax straddle rules of section 1092 of the Code, requiring that losses be deferred and holding periods be tolled on offsetting positions in options and stocks deemed to constitute substantially similar or related property. Options on single stocks that are not "deep in the money" may constitute
83


qualified covered calls, which generally are not subject to the straddle rules; the holding period on stock underlying qualified covered calls that are "in the money" although not "deep in the money" will be suspended during the period that such calls are outstanding. Thus, the straddle rules and the rules governing qualified covered calls could cause gains that would otherwise constitute long-term capital gains to be treated as short-term capital gains, and distributions that would otherwise constitute "qualified dividend income" or qualify for the dividends-received deduction to fail to satisfy the holding period requirements and therefore to be taxed as ordinary income or fail to qualify for the 50% dividends-received deduction, as the case may be.

The tax treatment of certain futures contracts entered into by a Fund as well as listed non-equity options written or purchased by a Fund on U.S. exchanges (including options on futures contracts, equity indices and debt securities) will be governed by Section 1256 of the Code ("Section 1256 Contracts"). Gains or losses on Section 1256 Contracts generally are considered 60% long-term and 40% short-term capital gains or losses ("60/40"), although certain foreign currency gains and losses from such contracts may be treated as ordinary in character. Also, Section 1256 Contracts held by a Fund at the end of each taxable year (and, for purposes of the 4% excise tax, on certain other dates as prescribed under the Code) are "marked to market" with the result that unrealized gains or losses are treated as though they were realized and the resulting gain or loss is treated as ordinary or 60/40 gain or loss, as applicable.
 
In addition to the special rules described above in respect of futures and options transactions, a Fund's transactions in other derivative instruments (e.g., forward contracts and swap agreements) as well as any of its other hedging, short sale or similar transactions, may be subject to one or more special tax rules (e.g., notional principal contract, straddle, constructive sale, wash sale and short sale rules). These rules may affect whether gains and losses recognized by a Fund are treated as ordinary or capital or as short-term or long-term, accelerate the recognition of income or gains to the Fund, defer losses to the Fund, and cause adjustments in the holding periods of the Fund's securities. These rules could therefore affect the amount, timing and/or character of distributions to shareholders. Because these and other tax rules applicable to these types of transactions are in some cases uncertain under current law, an adverse determination or future guidance by the IRS with respect to these rules (which determination or guidance may be retroactive) may affect whether a Fund has made sufficient distributions, and otherwise satisfied the relevant requirements, to maintain its qualification as a RIC and avoid Fund-level tax. Each Fund will monitor its transactions, will make appropriate tax elections and will make appropriate entries in its books and records in order to mitigate the effect of these rules.

Certain of a Fund's investments in derivative instruments and foreign currency-denominated instruments, and any of a Fund's transactions in foreign currencies and hedging activities, are likely to produce a difference between a Fund's book income and the sum of its taxable income and net tax-exempt income (if any). If there is a difference between a Fund's book income and the sum of its taxable income and net tax-exempt income (if any), the Fund may be required to distribute amounts in excess of its book income or a portion of Fund distributions may be treated as a return of capital to shareholders. If a Fund's book income exceeds the sum of its taxable income (including realized capital gains) and net tax-exempt income (if any), the distribution (if any) of such excess generally will be treated as (i) a dividend to the extent of the Fund's remaining earnings and profits (including earnings and profits arising from tax-exempt income), (ii) thereafter, as a return of capital to the extent of the recipient's basis in the shares, and (iii) thereafter, as gain from the sale or exchange of a capital asset. If a Fund's book income is less than the sum of its taxable income and net tax-exempt income (if any), the Fund could be required to make distributions exceeding book income to qualify as a RIC that is accorded special tax treatment.
 
Commodities. Gains from the disposition of commodities, including precious metals, will neither be considered qualifying income for purposes of satisfying the Income Requirement nor qualifying assets for purposes of satisfying the Asset Diversification Requirement. Also, the IRS has issued a revenue ruling which holds that income derived from commodity- linked swaps is not qualifying income for purposes of the Income Requirement. In a subsequent revenue ruling, as well as in a number of follow on private letter rulings (upon which only the fund that received the private letter ruling may rely), the IRS provides that income from certain alternative investments which create commodity exposure, such as certain commodity-linked or structured notes or a corporate subsidiary that invests in commodities, may be considered qualifying income under the Code. However, the portion of such rulings relating to the treatment of a corporation as a RIC that require a determination of whether a financial instrument or position is a security under section 2(a)(36) of the 1940 Act was revoked because of changes in the IRS’s position. (A financial instrument or position that constitutes a security under section 2(a)(36) of the 1940 Act generates qualifying income for a corporation taxed as a regulated investment company). Accordingly, a Fund may decide to invest in certain commodity-linked notes only to the extent it obtains an opinion of counsel confirming that income from such investments should be qualifying income. In addition, a RIC may gain exposure to commodities through investment in a QPTP, such as an exchange- traded fund or ETF that is classified as a partnership and which invests in commodities. Accordingly, the extent to which a Fund invests in commodities or commodity-linked derivatives may be limited by the Income Requirement and the Asset Diversification Requirement, which the Fund must continue to satisfy to maintain its status as a RIC. A Fund also may be limited in its ability to sell its investments in commodities, commodity-linked derivatives, and certain ETFs or be forced to sell other investments to generate income due to the Income Requirement. If a Fund does not appropriately limit such
84


investments or if such investments (or the income earned on such investments) were to be recharacterized for U.S. tax purposes, the Fund could fail to qualify as a RIC. In lieu of potential disqualification, a Fund is permitted to pay a tax for certain failures to satisfy the Asset Diversification Test or Income Requirement, which, in general, are limited to those due to reasonable cause and not willful neglect.
 
Original Issue Discount, Pay-In-Kind Securities, Market Discount and Commodity-Linked Notes. Some debt obligations with a fixed maturity date of more than one year from the date of issuance (and zero-coupon debt obligations with a fixed maturity date of more than one year from the date of issuance) that may be acquired by a Fund may be treated as debt obligations that are issued originally at a discount. Generally, the amount of the original issue discount ("OID") is treated as interest income and is included in a Fund's taxable income (and required to be distributed by the Fund) over the term of the debt obligation, even though payment of that amount is not received until a later time, upon partial or full repayment or disposition of the debt security.
 
Some debt obligations (with a fixed maturity date of more than one year from the date of issuance) that may be acquired by a Fund in the secondary market may be treated as having "market discount." Very generally, market discount is the excess of the stated redemption price of a debt obligation (or in the case of an obligations issued with OID, its "revised issue price") over the purchase price of such obligation. Generally, any gain recognized on the disposition of, and any partial payment of principal on, a debt obligation having market discount is treated as ordinary income to the extent the gain, or principal payment, does not exceed the "accrued market discount" on such debt obligation. Alternatively, a Fund may elect to accrue market discount currently, in which case the Fund will be required to include the accrued market discount in the Fund's income (as ordinary income) and thus distribute it over the term of the debt security, even though payment of that amount is not received until a later time, upon partial or full repayment or disposition of the debt security. The rate at which the market discount accrues, and thus is included in a Fund's income, will depend upon which of the permitted accrual methods the Fund elects. In the case of higher-risk securities, the amount of market discount may be unclear. See "Higher-Risk Securities."

Some debt obligations (with a fixed maturity date of one year or less from the date of issuance) that may be acquired by a Fund may be treated as having "acquisition discount" (very generally, the excess of the stated redemption price over the purchase price), or OID in the case of certain types of debt obligations. A Fund will be required to include the acquisition discount, or OID, in income (as ordinary income) over the term of the debt obligation, even though payment of that amount is not received until a later time, upon partial or full repayment or disposition of the debt security. A Fund may make one or more of the elections applicable to debt obligations having acquisition discount, or OID, which could affect the character and timing of recognition of income.
In addition, payment-in-kind securities will, and commodity-linked notes may, give rise to income that is required to be distributed and is taxable even though the Fund holding the security receives no interest payment in cash on the security during the year.
 
If a Fund holds the foregoing kinds of securities, it may be required to pay out as an income distribution each year an amount that is greater than the total amount of cash interest the Fund actually received. Such distributions may be made from the cash assets of a Fund or by liquidation of portfolio securities, if necessary (including when it is not advantageous to do so). A Fund may realize gains or losses from such liquidations. In the event a Fund realizes net capital gains from such transactions, its shareholders may receive a larger capital gain distribution than they would in the absence of such transactions.
 
Higher-Risk Securities. To the extent such investments are permissible for a Fund, a Fund may invest in debt obligations that are in the lowest rating categories or are unrated, including debt obligations of issuers not currently paying interest or who are in default. Investments in debt obligations that are at risk of or in default present special tax issues for a Fund. Tax rules are not entirely clear about issues such as when a Fund may cease to accrue interest, OID or market discount, when and to what extent deductions may be taken for bad debts or worthless securities and how payments received on obligations in default should be allocated between principal and income. In limited circumstances, it may also not be clear whether a Fund should recognize market discount on a debt obligation, and if so, what amount of market discount the Fund should recognize. These and other related issues will be addressed by a Fund when, as and if it invests in such securities, in order to seek to ensure that it distributes sufficient income to preserve its status as a RIC and does not become subject to U.S. federal income or excise tax.
 
Issuer Deductibility of Interest. A portion of the interest paid or accrued on certain high yield discount obligations owned by a Fund may not be deductible to (and thus, may affect the cash flow of) the issuer. If a portion of the interest paid or accrued on certain high yield discount obligations is not deductible, that portion will be treated as a dividend for purposes of the corporate dividends-received deduction. In such cases, if the issuer of the high yield discount obligations is a domestic corporation, dividend payments by a Fund may be eligible for the dividends-received deduction to the extent of the deemed dividend portion of such accrued interest.
 
85


Interest paid on debt obligations owned by a Fund, if any, that are considered for U.S. tax purposes to be payable in the equity of the issuer or a related party will not be deductible to the issuer, possibly affecting the cash flow of the issuer.
 
Securities Lending. While securities are loaned out by a Fund, the Fund generally will receive from the borrower amounts equal to any dividends or interest paid on the borrowed securities. For federal income tax purposes, payments made “in lieu of” dividends are not considered dividend income. These distributions will neither qualify for the reduced rate of federal income taxation for individuals on qualified dividends income, if otherwise available, nor the 50% dividends-received deduction for corporations. Also, any foreign tax withheld on payments made “in lieu of” dividends or interest may not qualify for the passthrough of foreign tax credits to shareholders.

Tax-Exempt Shareholders. A tax-exempt shareholder could recognize UBTI by virtue of its investment in a Fund if Shares in the Fund constitute debt-financed property in the hands of the tax-exempt shareholder within the meaning of section 514(b) of the Code. Furthermore, a tax-exempt shareholder may recognize UBTI if a Fund recognizes "excess inclusion income" derived from direct or indirect investments in residual interests in REMICs or equity interests in TMPs if the amount of such income recognized by the Fund exceeds the Fund's investment company taxable income (after taking into account deductions for dividends paid by the Fund).
 
In addition, special tax consequences apply to charitable remainder trusts ("CRTs") that invest in RICs that invest directly or indirectly in residual interests in REMICs or equity interests in TMPs. Under legislation enacted in December 2006, a CRT (as defined in Section 664 of the Code) that realizes any UBTI for a taxable year must pay an excise tax annually of an amount equal to such UBTI. Under IRS guidance issued in October 2006, a CRT will not recognize UBTI solely as a result of investing in a regulated investment company that recognizes "excess inclusion income." Rather, if at any time during any taxable year a CRT (or one of certain other tax-exempt shareholders, such as the United States, a state or political subdivision, or an agency or instrumentality thereof, and certain energy cooperatives) is a record holder of a share in the regulated investment company that recognizes "excess inclusion income," then the RIC will be subject to a tax on that portion of its "excess inclusion income" for the taxable year that is allocable to such shareholders, at the corporate income tax rate. The extent to which this IRS guidance remains applicable in light of the December 2006 legislation is unclear. To the extent permitted under the 1940 Act, a Fund may elect to specially allocate any such tax to the applicable CRT, or other shareholder, and thus reduce such shareholder's distributions for the year by the amount of the tax that relates to such shareholder's interest in the Fund. Each Fund has not yet determined whether such an election will be made. CRTs and other tax-exempt investors are urged to consult their tax advisers concerning the consequences of investing in a Fund.
 
Passive Foreign Investment Companies. A passive foreign investment company ("PFIC") is any foreign corporation: (i) 75% or more of the gross income of which for the taxable year is passive income, or (ii) the average percentage of the assets of which (generally by value, but by adjusted tax basis in certain cases) that produce or are held for the production of passive income is at least 50%. Generally, passive income for this purpose means dividends, interest (including income equivalent to interest), royalties, rents, annuities, the excess of gains over losses from certain property transactions and commodities transactions, and foreign currency gains. Passive income for this purpose does not include rents and royalties received by the foreign corporation from an active business and certain income received from related persons.
 
Equity investments by a Fund in certain PFICs could potentially subject the Fund to a U.S. federal income tax or other charge (including interest charges) on the distributions received from the PFIC or on proceeds received from the disposition of shares in the PFIC. This tax cannot be eliminated by making distributions to Fund shareholders. However, a Fund may elect to avoid the imposition of that tax. For example, if a Fund is in a position to and elects to treat a PFIC as a "qualified electing fund" (i.e., make a "QEF election"), the Fund will be required to include its share of the PFIC's income and net capital gains annually, regardless of whether it receives any distribution from the PFIC. Alternatively, a Fund may make an election to mark the gains (and to a limited extent losses) in its PFIC holdings "to the market" as though it had sold and repurchased its holdings in those PFICs on the last day of the Fund's taxable year. Such gains and losses are treated as ordinary income and loss. The QEF and mark-to-market elections may accelerate the recognition of income (without the receipt of cash) and increase the amount required to be distributed by a Fund to avoid taxation. Making either of these elections therefore may require a Fund to liquidate other investments (including when it is not advantageous to do so) to meet its distribution requirement, which also may accelerate the recognition of gain and affect the Fund's total return. Dividends paid by PFICs will not be eligible to be treated as "qualified dividend income."

Because it is not always possible to identify a foreign corporation as a PFIC, a Fund may be liable for corporate-level tax on any ultimate gain or distributions on the shares if such Fund fails to make an election to recognize income annually during the period of its ownership of the shares.
 
86


Foreign Currency Transactions. A Fund's transactions in foreign currencies, foreign currency-denominated debt obligations and certain foreign currency options, futures contracts and forward contracts (and similar instruments) may give rise to ordinary income or loss to the extent such income or loss results from fluctuations in the value of the foreign currency concerned. Any such net gains could require a larger dividend toward the end of the calendar year. Any such net losses will generally reduce and potentially require the re-characterization of prior ordinary income distributions. Such ordinary income treatment may accelerate a Fund's distributions to shareholders and increase the distributions taxed to shareholders as ordinary income. Any net ordinary losses so created cannot be carried forward by a Fund to offset income or gains earned in subsequent taxable years.
 
Investments in partnerships and QPTPs. For purposes of the Income Requirement, income derived by a Fund from a partnership that is not a QPTP will be treated as qualifying income only to the extent such income is attributable to items of income of the partnership that would be qualifying income if realized directly by such Fund. While the rules are not entirely clear with respect to a Fund investing in a partnership outside a master feeder structure, for purposes of testing whether a Fund satisfies the Asset Diversification Requirement, the Fund generally is treated as owning a pro rata share of the underlying assets of a partnership. In contrast, different rules apply to a partnership that is a QPTP. All of the net income derived by a Fund from an interest in a QPTP will be treated as qualifying income but the Fund may not invest more than 25% of its total assets in one or more QPTPs. However, there can be no assurance that a partnership classified as a QPTP in one year will qualify as a QPTP in the next year. Any such failure to annually qualify as a QPTP might, in turn, cause a Fund to fail to qualify as a RIC. Although, in general, the passive loss rules of the Code do not apply to RICs, such rules do apply to a Fund with respect to items attributable to an interest in a QPTP. Fund investments in partnerships, including in QPTPs, may result in the fund being subject to state, local or foreign income, franchise, or withholding tax liabilities.

If an MLP is treated as a partnership for U.S. federal income tax purposes (whether or not a QPTP), all or portion of the dividends received by a Fund from the MLP likely will be treated as a return of capital for U.S. federal income tax purposes because of accelerated deductions available with respect to the activities of such MLPs. Further, because of these accelerated deductions, on the disposition of interests in such an MLP, a Fund likely will realize taxable income in excess of economic gain with respect to those MLP interests (or if the Fund does not dispose of the MLP, the Fund could realize taxable income in excess of cash flow with respect to the MLP in a later period), and the Fund must take such income into account in determining whether the Fund has satisfied its Distribution Requirement. A Fund may have to borrow or liquidate securities to satisfy its Distribution Requirement and to meet its redemption requests, even though investment considerations might otherwise make it undesirable for the Fund to sell securities or borrow money at such time. In addition, any gain recognized, either upon the sale of a Fund's MLP interest or sale by the MLP of property held by it, including in excess of economic gain thereon, treated as so-called "recapture income," will be treated as ordinary income. Therefore, to the extent a Fund invests in MLPs, Fund shareholders might receive greater amounts of distributions from the Fund taxable as ordinary income than they otherwise would in the absence of such MLP investments.

Although MLPs are generally expected to be treated as partnerships for U.S. federal income tax purposes, some MLPs may be treated as PFICs or "regular" corporations for U.S. federal income tax purposes. The treatment of particular MLPs for U.S. federal income tax purposes will affect the extent to which a Fund can invest in MLPs and will impact the amount, character, and timing of income recognized by the Fund.

SALES OF SHARES
 
Sales, exchanges and redemptions (including redemptions in-kind) of Fund Shares are taxable transactions for federal and state income tax purposes. A redemption of Shares by a Fund will be treated as a sale. An Authorized Participant who exchanges securities for Creation Units generally will recognize a gain or a loss. The gain or loss will be equal to the difference between the market value of the Creation Units at the time of purchase (plus any cash received by the Authorized Participant as part of the issue) and the Authorized Participant's aggregate basis in the securities surrendered (plus any cash paid by the Authorized Participant as part of the issue). An Authorized Participant who exchanges Creation Units for securities generally will recognize a gain or loss equal to the difference between the Authorized Participant's basis in the Creation Units (plus any cash paid by the Authorized Participant as part of the redemption) and the aggregate market value of the securities received (plus any cash received by the Authorized Participant as part of the redemption). The IRS, however, may assert that a loss realized upon an exchange of securities for Creation Units cannot be deducted currently under the rules governing "wash sales," or on the basis that there has been no significant change in economic position. Persons exchanging securities should consult their own tax advisor with respect to whether the wash sale rules apply and when a loss might be deductible.

Under current federal tax laws, any capital gain or loss realized upon redemption of Creation Units is generally treated as long-term capital gain or loss if the Shares have been held for more than one year and as a short-term capital gain or loss if the Shares have been held for one year or less assuming that such Creation Units are held as a capital asset.

87


If a Fund redeems Creation Units in cash, it may recognize more capital gains than it will if it redeems Creation Units in-kind.

Any loss realized on a sale or exchange will be disallowed to the extent the shares disposed of are replaced, including replacement through the reinvesting of dividends and capital gains distributions in a Fund, within a 61-day period beginning 30 days before and ending 30 days after the disposition of the shares. In such a case, the basis of the shares acquired will be increased to reflect the disallowed loss. Any loss realized by a shareholder on the sale of the Fund Shares held by the shareholder for six months or less will be treated for U.S. federal income tax purposes as a long-term capital loss to the extent of any distributions or deemed distributions of long-term capital gains received by the shareholder with respect to such Shares.

COST BASIS REPORTING
 
Federal law requires that mutual fund companies or intermediaries report their shareholders' cost basis, gain/loss, and holding period to the IRS on the shareholders' Consolidated Form 1099s when "covered" securities are sold. Covered securities are any RIC and/or dividend reinvestment plan shares acquired on or after January 1, 2012.
 
Each Fund or intermediaries (broker) will choose or has chosen a standing (default) tax lot identification method for all shareholders. A tax lot identification method is the way the broker will determine which specific shares are deemed to be sold when there are multiple purchases on different dates at differing net asset values, and the entire position is not sold at one time. A broker's standing tax lot identification method is the method covered Shares will be reported on your Consolidated Form 1099 if you do not select a specific tax lot identification method. You may choose a method different than the standing method and will be able to do so at the time of your purchase or upon the sale of covered Shares. Please refer to the appropriate IRS regulations or consult your tax advisor with regard to your personal circumstances. Shareholders will be notified as to which default tax lot identification method their broker will use.

For those securities defined as "covered" under current IRS cost basis tax reporting regulations, a Fund is responsible for maintaining accurate cost basis and tax lot information for tax reporting purposes. A broker is not responsible for the reliability or accuracy of the information for those securities that are not "covered." A Fund and its service providers do not provide tax advice. You should consult independent sources, which may include a tax professional, with respect to any decisions you may make with respect to choosing a tax lot identification method.

REPORTING
 
If a shareholder recognizes a loss with respect to a Fund's Shares of $2 million or more for an individual shareholder or $10 million or more for a corporate shareholder, the shareholder may be required to file with the IRS a disclosure statement on Form 8886. Direct shareholders of portfolio securities are in many cases exempted from this reporting requirement, but under current guidance, shareholders of a RIC are not exempted. The fact that a loss is reportable under these regulations does not affect the legal determination of whether the taxpayer's treatment of the loss is proper. Shareholders should consult their tax advisors to determine the applicability of these regulations in light of their individual circumstances. Under recently enacted legislation, certain tax-exempt entities and their managers may be subject to excise tax if they are parties to certain reportable transactions.
 
The foregoing discussion is a summary only and is not intended as a substitute for careful tax planning. Purchasers of Shares should consult their own tax advisers as to the tax consequences of investing in such shares, including under state, local and foreign tax laws. Finally, the foregoing discussion is based on applicable provisions of the Code, regulations, judicial authority and administrative interpretations in effect on the date of this SAI. Changes in applicable authority could materially affect the conclusions discussed above, and such changes often occur.

BACKUP WITHHOLDING

Withholding is required on dividends and gross sales proceeds paid to any shareholder who: (1) has failed to provide a correct taxpayer identification number; (2) is subject to backup withholding by the IRS; (3) has failed to certify to a Fund that such shareholder is not subject to backup withholding; or (4) has not certified that such shareholder is a U.S. person (including a U.S. resident alien)." When withholding is required, the amount will be 24% of any distributions or proceeds paid.

OTHER TAXES

Dividends, distributions and redemption proceeds may also be subject to additional state, local and foreign taxes depending on each shareholder's particular situation.

88


TAXATION OF NON-U.S. SHAREHOLDERS

Dividends paid to non-U.S. shareholders are generally subject to withholding tax at a 30% rate or a reduced rate specified by an applicable income tax treaty to the extent derived from investment income and short-term capital gains. In order to obtain a reduced rate of withholding, a non-U.S. shareholder will be required to provide an IRS Form W-8BEN or W-8BEN-E certifying its entitlement to benefits under a treaty. The withholding tax does not apply to regular dividends paid to a non-U.S. shareholder who provides a Form W-8ECI, certifying that the dividends are effectively connected with the non-U.S. shareholder's conduct of a trade or business within the United States. Instead, the effectively connected dividends will be subject to regular U.S. income tax as if the non-U.S. shareholder were a U.S. shareholder. A non-U.S. corporation receiving effectively connected dividends may also be subject to additional "branch profits tax" imposed at a rate of 30% (or lower treaty rate). A non-U.S. shareholder who fails to provide an IRS Form W-8BEN or other applicable form may be subject to backup withholding at the appropriate rate.

In general, capital gain dividends reported shareholders as paid from its net long-term capital gains, other than long-term capital gains realized on disposition of U.S. real property interests (see the discussion below), are not subject to U.S. withholding tax unless you are a nonresident alien individual present in the U.S. for a period or periods aggregating 183 days or more during the calendar year. Generally, dividends reported to shareholders as interest-related dividends paid from the Fund's qualified net interest income from U.S. sources and short-term capital gain dividends reported to shareholders as paid from its net short-term capital gains, other than short-term capital gains realized on disposition of U.S. real property interests (see the discussion below), are not subject to U.S. withholding tax unless you were a nonresident alien individual present in the U.S. for a period or periods aggregating 183 days or more during the calendar year. The Fund reserves the right to not report interest-related dividends or short-term capital gain dividends. Additionally, the Fund's reporting of interest-related dividends or short-term capital gain dividends may not be passed through to shareholders by intermediaries who have assumed tax reporting responsibilities for this income in managed or omnibus accounts due to systems limitations or operational constraints.

For foreign shareholders of a Fund, a distribution attributable to such Fund's sale of a REIT or other U.S. real property holding company will be treated as real property gain subject to withholding tax at the corporate income tax rate if 50% or more of the value of such Fund's assets are invested in REITs and other U.S. real property holding corporations and if the foreign shareholder has held more than 5% of a class of stock at any time during the one-year period ending on the date of the distribution. A distribution from a Fund will be treated as attributable to a U.S. real property interest only if such distribution is attributable to a distribution received by such Fund from a REIT. Restrictions apply regarding wash sales and substitute payment transactions. Because each Fund expects to invest less than 50% of its assets at all times, directly or indirectly, in U.S. real property interests, each Fund expects that neither gain on the sale or redemption of Fund shares nor Fund dividends and distributions would be subject to FIRPTA reporting and tax withholding.

Under the Foreign Account Tax Compliance Act ("FATCA"), a 30% withholding tax is imposed on income dividends paid by the Fund to certain foreign entities, referred to as foreign financial institutions or nonfinancial foreign entities, that fail to comply (or be deemed compliant) with extensive reporting and withholding requirements designed to inform the U.S. department of the Treasury of U.S.-owned foreign investment accounts. After December 31, 2018, FATCA withholding also would have applied to certain capital gain distributions, return of capital distributions and the proceeds arising from the sale of Fund Shares, however based on proposed regulations issued by the IRS, which can be relied upon currently, such withholding is no longer required unless final regulations provide otherwise (which is not expected). Information about a shareholder in a Fund may be disclosed to the IRS, non-U.S. taxing authorities or other parties as necessary to comply with FATCA. Withholding also may be required if a foreign entity that is a shareholder of a Fund fails to provide the appropriate certifications or other documentation concerning its status under FATCA.

Each prospective shareholder is urged to consult its tax adviser regarding the applicability of FATCA and any other reporting requirements with respect to the prospective shareholder's own situation, including investments through an intermediary.

NET ASSET VALUE
 
The NAV for each Fund is calculated by deducting all of the Fund's liabilities (including accrued expenses) from the total value of its assets (including the securities held by the Fund plus any cash or other assets, including interest and dividends accrued but not yet received) and dividing the result by the number of shares outstanding, and generally rounded to the nearest cent, although each Fund reserves the right to calculate its NAV to more than two decimal places. The NAV for each Fund will generally be determined by SEIGFS once daily Monday through Friday generally as of the regularly scheduled close of business of the Exchange (normally 4:00 p.m. Eastern Time) on each day that the Exchange is open for trading, based on prices at the time of closing, provided that (a) any assets or liabilities denominated in currencies other than the U.S. dollar shall be translated into U.S. dollars at the prevailing market rates on the date of valuation as quoted by one or more major banks or
89


dealers that makes a two-way market in such currencies (or a data service provider based on quotations received from such banks or dealers); and (b) U.S. fixed-income assets may be valued as of the announced closing time for trading in fixed-income instruments on any day that the Bond Market Association announces an early closing time.
 
In calculating a Fund's NAV, the Fund's investments are generally valued using market valuations. In the event that current market valuations are not readily available or such valuations do not reflect current market values, the affected investments will be valued using fair value pricing pursuant to the pricing policy and procedures approved by the Board. A market valuation generally means a valuation (i) obtained from an exchange, or a major market maker (or dealer), (ii) based on a price quotation or other equivalent indication of value supplied by an exchange, a pricing service, or a major market maker (or dealer) or (iii) based on amortized cost. In the case of shares of funds that are not traded on an exchange, a market valuation means such fund's published NAV per share. SEIGFS may use various pricing services or discontinue the use of any pricing service.
 
In the event that current market valuations are not readily available or such valuations do not reflect current market values, the affected investments will be valued using fair value pricing pursuant to the pricing policy and procedures approved by a Fund's Board of Trustees. A price obtained from a pricing service based on such pricing service's valuation matrix may be used to fair value a security. The frequency with which a Fund's investments are valued using fair value pricing is primarily a function of the types of securities and other assets in which the Fund invests pursuant to its investment objective, strategies and limitations.
Investments that may be valued using fair value pricing include, but are not limited to: (i) an unlisted security related to corporate actions; (ii) a restricted security (i.e., one that may not be publicly sold without registration under the Securities Act of 1933, as amended (the "Securities Act")); (iii) a security whose trading has been suspended or which has been de-listed from its primary trading exchange; (iv) a security that is thinly traded; (v) a security in default or bankruptcy proceedings for which there is no current market quotation; (vi) a security affected by currency controls or restrictions; and (vii) a security affected by a significant event (i.e., an event that occurs after the close of the markets on which the security is traded but before the time as of which the Fund's NAV is computed and that may materially affect the value of the Fund's investments). Examples of events that may be "significant events" are government actions, natural disasters, armed conflict, acts of terrorism, and significant market fluctuations.
Valuing a Fund's investments using fair value pricing will result in using prices for those investments that may differ from current market valuations. Use of fair value prices and certain current market valuations could result in a difference between the prices used to calculate a Fund's net asset value and the prices used by the Fund's Underlying Index, which, in turn, could result in a difference between the Fund's performance and the performance of the Fund's Underlying Index.
The value of assets denominated in foreign currencies is converted into U.S. dollars using exchange rates deemed appropriate by the Adviser as investment adviser. Any use of fair value prices, current market valuations or exchange rates different from the prices and rates used by the Index Providers may adversely affect a Fund's ability to track its Underlying Index.

Each Fund will publish the following information on the Fund’s website for each portfolio holding that will form the basis of the next calculation of current net asset value per share: (A) the ticker symbol (if available); (B) CUSIP or other identifier; (C) a description of the holding; (D) quantity of each security or other asset held; and (E) the percentage weight of the holding in the portfolio.

In December 2020, the SEC adopted Rule 2a-5 under the 1940 Act (“Rule 2a-5”), which is intended to address valuation practices and the role of a registered investment company’s board of trustees with respect to the fair value of the investments of the registered investment company or business development company. Among other things, Rule 2a-5 will permit a fund’s board to designate the fund’s primary investment adviser to perform the fund’s fair value determinations, which will be subject to board oversight and certain reporting and other requirements intended to ensure that the registered investment company’s board receives the information it needs to oversee the investment adviser’s fair value determinations. The Funds and the Adviser must comply with Rule 2a-5 by September 8, 2022. The Adviser continues to review Rule 2a-5 and its impact on the Adviser’s and the Funds’ valuation policies and related practices.
 
DISTRIBUTION AND SERVICE PLAN
The Board of Trustees of the Trust has adopted a distribution and services plan ("Plan") pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, each Fund is authorized to pay distribution fees in connection with the sale and distribution of its Shares and pay service fees in connection with the provision of ongoing services to shareholders of each class and the maintenance of shareholder accounts in an amount up to 0.25% of its average daily net assets each year.
90


No Rule 12b-1 fees are currently paid by the Funds, and there are no current plans to impose these fees. However, in the event Rule 12b-1 fees are charged in the future, because these fees are paid out of each Fund's assets on an ongoing basis, these fees will increase the cost of your investment in the Funds. By purchasing Shares subject to distribution fees and service fees, you may pay more over time than you would by purchasing Shares with other types of sales charge arrangements. Long-term shareholders may pay more than the economic equivalent of the maximum front-end sales charge permitted by the rules of FINRA. The net income attributable to Shares will be reduced by the amount of distribution fees and service fees and other expenses.

DIVIDENDS AND DISTRIBUTIONS
 
GENERAL POLICIES
 
Dividends from net investment income, including any net foreign currency gains, are declared and paid at least annually and any net realized securities gains are distributed at least annually. To improve tracking error or comply with the distribution requirements of the Code, dividends may be declared and paid more frequently than annually for certain funds. Dividends and securities gains distributions are distributed in U.S. dollars and cannot be automatically reinvested in additional Shares of the Funds. The Trust reserves the right to declare special distributions if, in its reasonable discretion, such action is necessary or advisable to preserve the status of each Fund as a RIC or to avoid imposition of income or excise taxes on undistributed income.

Dividends and other distributions of shares are distributed on a pro rata basis to Beneficial Owners of such shares. Dividend payments are made through DTC Participants and Indirect Participants to Beneficial Owners then of record with proceeds received from the Funds.

DIVIDEND REINVESTMENT SERVICE

No dividend reinvestment service is provided by the Trust. Broker-dealers may make available the DTC book-entry Dividend Reinvestment Service for use by Beneficial Owners of the Funds for reinvestment of their dividend distributions. Beneficial Owners should contact their broker to determine the availability and costs of the service and the details of participation therein. Brokers may require Beneficial Owners to adhere to specific procedures and timetables. If this service is available and used, dividend distributions of both income and realized gains will be automatically reinvested in additional whole shares of the same Fund purchased in the secondary market.

FINANCIAL STATEMENTS
 
Audited financial statements and financial highlights for the Trust as of October 31, 2021, including the notes thereto, and the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, are incorporated herein by reference from the Trust's October 31, 2021 Annual Report to shareholders
(https://www.sec.gov/Archives/edgar/data/1432353/000113542822000013/globalxintl103121.htm)
(https://www.sec.gov/Archives/edgar/data/1432353/000113542822000012/globalxcomm_ar103121.htm)
(https://www.sec.gov/Archives/edgar/data/1432353/000113542822000014/globalxspecopps103121.htm). The Annual Report will be delivered upon request.

OTHER INFORMATION
 
91


CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Although the Trust does not have information concerning the beneficial ownership of shares held in the names of Authorized Participants, as of February 1, 2022, the following persons owned, of record or beneficially, 5% or more of the following Funds.

Global X MSCI Colombia ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
The Bank of New York Mellon
One Wall Street, 5th Floor, New York, NY 10286-0001
17.39%
State Street Bank & Trust Company
1776 Heritage Drive, North Quincy, MA 02171
14.47%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
14.02%
J.P. Morgan Securities LLC/JPMC                                                              
383 Madison Ave, New York, NY 10179
11.70%
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
6.07%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
5.66%

Global X MSCI China Consumer Discretionary ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
24.68%
Euroclear Bank SA/NV
1 Boulevard du Roi Albert II, Brussels, BE 01210
21.18%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
8.81%
Brown Brothers Harriman & Co.
525 Washington Blvd., Jersey City, NJ 07310
5.98%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
5.77%

Global X MSCI China Industrials ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
The Bank of New York Mellon
One Wall Street, 5th Floor, New York, NY 10286-0001
76.03%

Global X MSCI China Communication Services ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
17.48%
J.P. Morgan Securities LLC/JPMC                                                              
383 Madison Ave, New York, NY 10179
14.85%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
9.38%
Morgan Stanley Smith Barney LLC
1 Harborside Financial Center, Plaza II, Jersey City, NJ 07311
8.20%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
7.32%
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
6.95%


92


Global X MSCI China Financials ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
The Bank of New York Mellon
One Wall Street, 5th Floor, New York, NY 10286-0001
50.40%
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
5.89%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
5.16%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
5.08%

Global X MSCI China Energy ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
18.49%
RBC Capital Markets, LLC
3 World Financial Center, 200 Vesey St., New York, NY 10281-8098
10.26%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
10.10%
Goldman, Sachs & Co. LLC
180 Maiden Lane, New York, NY 10038
7.34%
The Bank of New York Mellon
One Wall Street, 5th Floor, New York, NY 10286-0001
6.30%
Morgan Stanley Smith Barney LLC
1 Harborside Financial Center, Plaza II, Jersey City, NJ 07311
5.64%

Global X MSCI China Materials ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
16.84%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
10.23%
RBC Capital Markets, LLC
3 World Financial Center, 200 Vesey St., New York, NY 10281-8098
8.76%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
7.43%
J.P. Morgan Securities LLC/JPMC                                                              
383 Madison Ave, New York, NY 10179
7.08%
The Bank of New York Mellon
One Wall Street, 5th Floor, New York, NY 10286-0001
5.37%
Morgan Stanley Smith Barney LLC
1 Harborside Financial Center, Plaza II, Jersey City, NJ 07311
5.15%
BofA Securities, Inc.
1 Bryant Park, New York, NY 10036
5.13%

93



Global X MSCI Norway ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
20.28%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
15.40%
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
9.79%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
8.07%
Vanguard Marketing Corporation
100 Vanguard Boulevard, Malvern, PA 19355
5.47%

Global X FTSE Southeast Asia ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
24.13%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
9.98%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
9.33%
Interactive Brokers, LLC/Retail Clearance
Two Pickwick Plaza, 2nd Floor, Greenwich, CT 06830
6.56%
Pershing LLC
One Pershing Plaza, Jersey City, NJ 07399
6.39%

Global X MSCI Argentina ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Pershing LLC
One Pershing Plaza, Jersey City, NJ 07399
13.67%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
13.38%
The Bank of New York Mellon
One Wall Street, 5th Floor, New York, NY 10286-0001
11.79%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
10.51%
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
7.58%
















Global X MSCI Greece ETF
94


Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
15.95%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
14.77%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
14.07%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
7.22%
Interactive Brokers, LLC/Retail Clearance
Two Pickwick Plaza, 2nd Floor, Greenwich, CT 06830
6.20%
Brown Brothers Harriman & Co.
525 Washington Blvd., Jersey City, NJ 07310
5.54%
Vanguard Marketing Corporation
100 Vanguard Boulevard, Malvern, PA 19355
5.37%

Global X MSCI Nigeria ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
13.26%
Interactive Brokers, LLC/Retail Clearance
Two Pickwick Plaza, 2nd Floor, Greenwich, CT 06830
13.23%
Vanguard Marketing Corporation
100 Vanguard Boulevard, Malvern, PA 19355
10.68%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
10.53%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
9.33%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
9.14%

Global X MSCI Next Emerging & Frontier ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
LPL Financial LLC
LPL Financial, 4707 Executive Dr., San Diego, CA 92121-3091
47.54%
Morgan Stanley Smith Barney LLC
1 Harborside Financial Center, Plaza II, Jersey City, NJ 07311
12.10%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
8.42%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
7.46%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
5.90%

95


Global X MSCI Portugal ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Vanguard Marketing Corporation
100 Vanguard Boulevard, Malvern, PA 19355
14.02%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
11.90%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
11.34%
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
7.40%
Interactive Brokers, LLC/Retail Clearance
Two Pickwick Plaza, 2nd Floor, Greenwich, CT 06830
7.33%
Brown Brothers Harriman & Co.
525 Washington Blvd., Jersey City, NJ 07310
6.90%
J.P. Morgan Securities LLC/JPMC                                                              
383 Madison Ave, New York, NY 10179
5.68%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
5.35%
BofA Securities, Inc.
1 Bryant Park, New York, NY 10036
5.13%

Global X DAX Germany ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
National Financial Services LLC
200 Liberty Street, New York, NY 10281
18.01%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
16.01%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
7.14%
J.P. Morgan Securities LLC/JPMC                                                              
383 Madison Ave, New York, NY 10179
6.62%
BofA Securities, Inc.
1 Bryant Park, New York, NY 10036
6.24%
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
6.04%

Global X MSCI Pakistan ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
National Financial Services LLC
200 Liberty Street, New York, NY 10281
13.63%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
11.13%
Interactive Brokers, LLC/Retail Clearance
Two Pickwick Plaza, 2nd Floor, Greenwich, CT 06830
9.44%
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
8.53%
J.P. Morgan Securities LLC/JPMC                                                              
383 Madison Ave, New York, NY 10179
7.88%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
7.72%
Brown Brothers Harriman & Co.
525 Washington Blvd., Jersey City, NJ 07310
6.53%

96


Global X MSCI China Consumer Staples ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
18.87%
J.P. Morgan Securities LLC/JPMC                                                              
383 Madison Ave, New York, NY 10179
15.52%
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
13.94%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
9.98%
Interactive Brokers, LLC/Retail Clearance
Two Pickwick Plaza, 2nd Floor, Greenwich, CT 06830
7.71%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
6.23%

Global X MSCI China Health Care ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
15.77%
J.P. Morgan Securities LLC/JPMC                                                              
383 Madison Ave, New York, NY 10179
12.15%
The Bank of New York Mellon
One Wall Street, 5th Floor, New York, NY 10286-0001
8.99%
Goldman, Sachs & Co. LLC
180 Maiden Lane, New York, NY 10038
7.63%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
7.06%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
7.03%
BofA Securities, Inc.
1 Bryant Park, New York, NY 10036
6.53%
Interactive Brokers, LLC/Retail Clearance
Two Pickwick Plaza, 2nd Floor, Greenwich, CT 06830
5.69%
Brown Brothers Harriman & Co.
525 Washington Blvd., Jersey City, NJ 07310
5.16%

Global X MSCI China Information Technology ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Goldman, Sachs & Co. LLC
180 Maiden Lane, New York, NY 10038
16.89%
Brown Brothers Harriman & Co.
525 Washington Blvd., Jersey City, NJ 07310
13.29%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
12.88%
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
12.10%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
8.93%
J.P. Morgan Securities LLC/JPMC                                                              
383 Madison Ave, New York, NY 10179
5.93%
Pershing LLC
One Pershing Plaza, Jersey City, NJ 07399
5.31%

97


Global X MSCI China Real Estate ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Interactive Brokers, LLC/Retail Clearance
Two Pickwick Plaza, 2nd Floor, Greenwich, CT 06830
13.91%
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
10.34%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
10.31%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
9.67%
Brown Brothers Harriman & Co.
525 Washington Blvd., Jersey City, NJ 07310
7.82%
E*Trade Securities LLC
1271 Avenue of the Americas, 14th Floor, New York, NY 10020
7.66%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
7.55%
Apex Clearing Corporation
1155 Long Island Ave, Edgewood, NY 11717
6.15%

Global X MSCI China Utilities ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
J.P. Morgan Securities LLC/JPMC                                                              
383 Madison Ave, New York, NY 10179
21.02%
Citigroup Global Markets Inc.
580 Crosspoint Parkway, Getzville, NY 14068
21.00%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
20.91%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
12.38%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
5.83%

Global X MSCI Vietnam ETF

Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
83.05%

Global X Copper Miners ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
58.25%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
6.01%

98


Global X Silver Miners ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
11.87%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
11.43%
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
8.62%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
6.99%
Morgan Stanley Smith Barney LLC
1 Harborside Financial Center, Plaza II, Jersey City, NJ 07311
5.79%

Global X Gold Explorers ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
13.97%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
13.78%
J.P. Morgan Securities LLC/JPMC                                                              
383 Madison Ave, New York, NY 10179
10.66%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
9.85%
BofA Securities, Inc.
1 Bryant Park, New York, NY 10036
7.79%
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
6.85%
Vanguard Marketing Corporation
100 Vanguard Boulevard, Malvern, PA 19355
6.34%

Global X Uranium ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
14.99%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
8.57%
The Bank of New York Mellon
One Wall Street, 5th Floor, New York, NY 10286-0001
7.20%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
6.70%
Brown Brothers Harriman & Co.
525 Washington Blvd., Jersey City, NJ 07310
5.93%
Morgan Stanley Smith Barney LLC
1 Harborside Financial Center, Plaza II, Jersey City, NJ 07311
5.92%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
5.15%

99


Global X Lithium & Battery Tech ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
15.68%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
14.15%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
9.91%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
6.62%

Global X SuperDividend® ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
National Financial Services LLC
200 Liberty Street, New York, NY 10281
15.62%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
12.61%
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
11.98%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
8.06%
Merrill Lynch, Pierce, Fenner & Smith Incorporated
One Bryant Park, New York, NY 10036
5.69%

Global X Social Media ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
JPMorgan Chase Bank, National Association
14201 Dallas Parkway, Chase International Plaza, Dallas, TX 75254-2916
28.32%
PNC Bank, N.A.
8800 Tinicum Boulevard, Philadelphia, PA 19153-3198
7.95%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
7.67%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
7.26%
Merrill Lynch, Pierce, Fenner & Smith Incorporated
One Bryant Park, New York, NY 10036
5.40%

Global X Guru® Index ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Apex Clearing Corporation
1155 Long Island Ave, Edgewood, NY 11717
28.20%
JPMorgan Chase Bank, National Association
14201 Dallas Parkway, Chase International Plaza, Dallas, TX 75254-2916
10.86%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
6.79%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
6.78%


100


Global X SuperIncome™ Preferred ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
National Financial Services LLC
200 Liberty Street, New York, NY 10281
17.90%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
10.67%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
9.76%
LPL Financial LLC
LPL Financial, 4707 Executive Dr., San Diego, CA 92121-3091
9.73%
Wells Fargo Clearing Services, LLC
1 North Jefferson Ave, St. Louis, MO 63103
6.83%
Merrill Lynch, Pierce, Fenner & Smith Incorporated
One Bryant Park, New York, NY 10036
6.83%

Global X SuperDividend® U.S. ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
National Financial Services LLC
200 Liberty Street, New York, NY 10281
18.82%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
11.70%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
10.43%
Merrill Lynch, Pierce, Fenner & Smith Incorporated
One Bryant Park, New York, NY 10036
7.14%
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
5.92%
Wells Fargo Clearing Services, LLC
1 North Jefferson Ave, St. Louis, MO 63103
5.69%

Global X S&P 500® Covered Call ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
National Financial Services LLC
200 Liberty Street, New York, NY 10281
14.15%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
13.96%
Morgan Stanley Smith Barney LLC
1 Harborside Financial Center, Plaza II, Jersey City, NJ 07311
12.91%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
10.59%
UBS Financial Services Inc.
1000 Harbor Boulevard, Weehawken, NJ 07086-6790
5.86%

Global X NASDAQ 100® Covered Call ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
15.03%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
14.88%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
14.24%
Interactive Brokers, LLC/Retail Clearance
Two Pickwick Plaza, 2nd Floor, Greenwich, CT 06830
5.29%
E*Trade Securities LLC
1271 Avenue of the Americas, 14th Floor, New York, NY 10020
5.14%

101


Global X MSCI SuperDividend® Emerging Markets ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Goldman Sachs International
133 Peterborough Court, 4th Floor, London, UK ECY A2BB
40.59%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
9.57%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
7.98%
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
5.02%

Global X SuperDividend® REIT ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
24.08%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
11.19%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
10.78%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
7.32%
Interactive Brokers, LLC/Retail Clearance
Two Pickwick Plaza, 2nd Floor, Greenwich, CT 06830
6.26%

Global X Renewable Energy Producers ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
17.97%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
15.58%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
10.28%
Brown Brothers Harriman and Company/ETF
525 Washington Blvd, Newport Towers, Jersey City, NJ 07310
7.53%
Pershing LLC
One Pershing Plaza, Jersey City, NJ 07399
6.36%

Global X S&P 500® Catholic Values ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Morgan Stanley Smith Barney LLC
1 Harborside Financial Center, Plaza II, Jersey City, NJ 07311
17.96%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
12.27%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
8.92%
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
8.48%
Merrill Lynch, Pierce, Fenner & Smith Incorporated
One Bryant Park, New York, NY 10036
6.98%
Vanguard Marketing Corporation
100 Vanguard Boulevard, Malvern, PA 19355
6.22%

Global X MSCI SuperDividend® EAFE ETF
102


Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
18.09%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
16.53%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
11.88%
Cetera Investment Services LLC
400 First Street South, Suite 300, St. Cloud, MN 56301
8.24%
Pershing LLC
One Pershing Plaza, Jersey City, NJ 07399
7.88%
J.P. Morgan Securities LLC/JPMC                                                              
383 Madison Ave, New York, NY 10179
5.97%
LPL Financial LLC
LPL Financial, 4707 Executive Dr., San Diego, CA 92121-3091
5.76%

Global X E-commerce ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
JPMorgan Chase Bank, National Association
14201 Dallas Parkway, Chase International Plaza, Dallas, TX 75254-2916
50.06%
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
6.75%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
5.77%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
5.10%

Global X Russell 2000 Covered Call ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
National Financial Services LLC
200 Liberty Street, New York, NY 10281
20.16%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
16.45%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
15.42%
E*Trade Securities LLC
1271 Avenue of the Americas, 14th Floor, New York, NY 10020
5.79%

103


Global X S&P Catholic Values Developed ex-U.S. ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
22.97%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
22.45%
Pershing LLC
One Pershing Plaza, Jersey City, NJ 07399
21.83%
Goldman, Sachs & Co. LLC
180 Maiden Lane, New York, NY 10038
13.60%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
10.11%

Global X Nasdaq 100® Covered Call & Growth ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
National Financial Services LLC
200 Liberty Street, New York, NY 10281
22.38%
Interactive Brokers, LLC/Retail Clearance
Two Pickwick Plaza, 2nd Floor, Greenwich, CT 06830
14.10%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
12.38%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
11.83%
Pershing LLC
One Pershing Plaza, Jersey City, NJ 07399
8.93%

Global X S&P 500® Covered Call & Growth ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Interactive Brokers, LLC/Retail Clearance
Two Pickwick Plaza, 2nd Floor, Greenwich, CT 06830
68.35%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
6.35%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
5.74%

Global X Emerging Markets Internet & E-commerce ETF
Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
National Financial Services LLC
200 Liberty Street, New York, NY 10281
18.22%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
16.71%
BofA Securities, Inc.
1 Bryant Park, New York, NY 10036
10.88%
J.P. Morgan Securities LLC/JPMC                                                              
383 Madison Ave, New York, NY 10179
10.73%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
8.69%
Citibank, N.A.
3800 Citigroup Center, Tampa, FL 33610-9122
5.49%

Global X S&P 500® Tail Risk ETF

104


Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
BofA Securities, Inc.
1 Bryant Park, New York, NY 10036
58.68%
Hilltop Securities Inc.
1201 Elm Street, Suite 3500, Dallas, TX 75270
18.76%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
6.57%

Global X S&P 500® Risk Managed Income ETF

Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
National Financial Services LLC
200 Liberty Street, New York, NY 10281
32.91%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
20.74%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
12.28%
Vanguard Marketing Corporation
100 Vanguard Boulevard, Malvern, PA 19355
6.36%
Interactive Brokers, LLC/Retail Clearance
Two Pickwick Plaza, 2nd Floor, Greenwich, CT 06830
6.01%

Global X S&P 500® Collar 95-110 ETF

Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
BofA Securities, Inc.
1 Bryant Park, New York, NY 10036
52.01%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
18.38%
National Financial Services LLC
200 Liberty Street, New York, NY 10281
16.90%

Global X NASDAQ 100® Tail Risk ETF

Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
BofA Securities, Inc.
1 Bryant Park, New York, NY 10036
57.96%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
14.48%
Goldman, Sachs & Co. LLC
180 Maiden Lane, New York, NY 10038
5.44%

Global X NASDAQ 100® Risk Managed Income ETF

Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
National Financial Services LLC
200 Liberty Street, New York, NY 10281
27.00%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
21.94%
Charles Schwab & Co., Inc.
101 Montgomery Street, San Francisco, CA 94104
12.95%
Interactive Brokers, LLC/Retail Clearance
Two Pickwick Plaza, 2nd Floor, Greenwich, CT 06830
10.39%
E*Trade Securities LLC
1271 Avenue of the Americas, 14th Floor, New York, NY 10020
5.35%
105



Global X NASDAQ 100® Collar 95-110 ETF

Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
BofA Securities, Inc.
1 Bryant Park, New York, NY 10036
57.96%
TD Ameritrade Clearing, Inc.
200 S 108th Ave, Omaha, NE 68154
14.48%
Goldman, Sachs & Co. LLC
180 Maiden Lane, New York, NY 10038
5.44%

Global X Disruptive Materials

Name and Address of Beneficial Owner Percentage of Outstanding Shares of Fund Owned
Goldman, Sachs & Co. LLC
180 Maiden Lane, New York, NY 10038
100.00%

106


INDEPENDENT TRUSTEE COUNSEL
 
Stradley Ronon Stevens & Young, LLP, with offices at 2000 K Street N.W. Suite 700, Washington, DC 20006, is Fund Counsel and Counsel to the Independent Trustees of the Trust.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
PricewaterhouseCoopers LLP serves as the Funds' independent registered public accounting firm.

SECURITIES LENDING AGENT
 
BBH serves as the securities lending agent for the Trust and each of its series, including the Funds.

ADDITIONAL INFORMATION
 
The Prospectus and this SAI do not contain all the information included in the registration statement filed with the SEC under the Securities Act with respect to the securities offered by the Trust's Prospectus. Certain portions of the registration statement have been omitted from the Prospectus and this SAI pursuant to the rules and regulations of the SEC. The registration statement, including the exhibits filed therewith, may be examined at the office of the SEC in Washington, D.C.
 
Statements contained in the Prospectus or in this SAI as to the contents of any contract or other documents referred to are not necessarily complete, and in each instance reference is made to the copy of such contract or other document filed as an exhibit to the registration statement of which the Prospectus and this SAI form a part, each such statement being qualified in all respects by such reference.

107


APPENDIX A
DESCRIPTION OF CORPORATE BOND RATINGS


Following are expanded explanations of the ratings shown in the Prospectus and this SAI.

Description of Moody's Investors Service, Inc. - Global Long-Term Obligation Ratings

Ratings assigned on Moody's global long-term rating scale are forward-looking opinions of the relative credit risks of financial obligations issued by non-financial corporates, financial institutions, structured finance vehicles, project finance vehicles, and public sector entities. Long-term ratings are assigned to issuers or obligations with an original maturity of one year or more and reflect both on the likelihood of a default on contractually promised payments and the expected financial loss suffered in the event of default. Such ratings have been published by Moody's Investors Service, Inc. and Moody's Analytics Inc.

Aaa: Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk.

Aa: Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.

A: Obligations rated A are judged to be upper-medium grade and are subject to low credit risk.

Baa: Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.

Ba: Obligations rated Ba are judged to be speculative and are subject to substantial credit risk.

B: Obligations rated B are considered speculative and are subject to high credit risk.

Caa: Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk.

Ca: Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.

C: Obligations rated C are the lowest rated and are typically in default, with little prospect for recovery of principal or interest.

Note: Moody's appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category. Additionally, a "(hyb)" indicator is appended to all ratings of hybrid securities issued by banks, insurers, finance companies, and securities firms.*

* By their terms, hybrid securities allow for the omission of scheduled dividends, interest, or principal payments, which can potentially result in impairment if such an omission occurs. Hybrid securities may also be subject to contractually allowable write-downs of principal that could result in impairment. Together with the hybrid indicator, the long-term obligation rating assigned to a hybrid security is an expression of the relative credit risk associated with that security.

Description of Moody's Investors Service, Inc. - National Long-Term Scale Ratings

Moody's long-term National Scale Ratings (NSRs) are opinions of the relative creditworthiness of issuers and financial obligations within a particular country. NSRs are not designed to be compared among countries; rather, they address relative credit risk within a given country. Moody's assigns national scale ratings in certain local capital markets in which investors have found the global rating scale provides inadequate differentiation among credits or is inconsistent with a rating scale already in common use in the country. In each specific country, the last two characters of the rating indicate the country in which the issuer is located (e.g., Aaa.br for Brazil).

Aaa.n: Issuers or issues rated Aaa.n demonstrate the strongest creditworthiness relative to other domestic issuers.
Aa.n: Issuers or issues rated Aa.n demonstrate very strong creditworthiness relative to other domestic issuers.

A.n: Issuers or issues rated A.n present above-average creditworthiness relative to other domestic issuers.

Baa.n: Issuers or issues rated Baa.n represent average creditworthiness relative to other domestic issuers.
108


Ba.n: Issuers or issues rated Ba.n demonstrate below-average creditworthiness relative to other domestic issuers.

B.n: Issuers or issues rated B.n demonstrate weak creditworthiness relative to other domestic issuers.

Caa.n: Issuers or issues rated Caa.n demonstrate very weak creditworthiness relative to other domestic issuers.

Ca.n: Issuers or issues rated Ca.n demonstrate extremely weak creditworthiness relative to other domestic issuers.

C.n: Issuers or issues rated C.n demonstrate the weakest creditworthiness relative to other domestic issuers.

Note: Moody's appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category. National scale long-term ratings of D.ar and E.ar may also be applied to Argentine obligations.

Description of S&P Global Ratings' - Long-Term Issue Credit Ratings*

Issue credit ratings are based, in varying degrees, on S&P Global Ratings' analysis of the following considerations:

Likelihood of payment—capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation;

Nature and provisions of the obligation, and the promise S&P Global Ratings imputes.

Protection afforded by, and relative position of, the financial obligation in the event of a bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors' rights.

Issue ratings are an assessment of default risk, but may incorporate an assessment of relative seniority or ultimate recovery in the event of default. Junior obligations are typically rated lower than senior obligations, to reflect the lower priority in bankruptcy, as noted above. (Such differentiation may apply when an entity has both senior and subordinated obligations, secured and unsecured obligations, or operating company and holding company obligations.)

AAA: An obligation rated 'AAA' has the highest rating assigned by S&P Global Ratings. The obligor's capacity to meet its financial commitment on the obligation is extremely strong.

AA: An obligation rated 'AA' differs from the highest-rated obligations only to a small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong.

A: An obligation rated 'A' is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still strong.

BBB: An obligation rated 'BBB' exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

BB; B; CCC; CC; and C: Obligations rated 'BB', 'B', 'CCC', 'CC', and 'C' are regarded as having significant speculative characteristics. 'BB' indicates the least degree of speculation and 'C' the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.

BB: An obligation rated 'BB' is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.

B: An obligation rated 'B' is more vulnerable to nonpayment than obligations rated 'BB', but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation.

CCC: An obligation rated 'CCC' is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business,
109


financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.

CC: An obligation rated 'CC' is currently highly vulnerable to nonpayment. The 'CC' rating is used when a default has not yet occurred, but S&P Global Ratings expects default to be a virtual certainty, regardless of the anticipated time to default.

C: An obligation rated 'C' is currently highly vulnerable to nonpayment, and the obligation is expected to have lower relative seniority or lower ultimate recovery compared to obligations that are rated higher.

D: An obligation rated 'D' is in default or in breach of an imputed promise. For non-hybrid capital instruments, the 'D' rating category is used when payments on an obligation are not made on the date due, unless S&P Global Ratings believes that such payments will be made within five business days in the absence of a stated grace period or within the earlier of the stated grace period or 30 calendar days. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. A rating on an obligation is lowered to 'D' if it is subject to a distressed exchange offer.

*The ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.

Description of DBRS - Long Term Obligation Ratings:

The DBRS® long-term rating scale provides an opinion on the risk of default. That is, the risk that an issuer will fail to satisfy its financial obligations in accordance with the terms under which an obligation has been issued. Ratings are based on quantitative and qualitative considerations relevant to the issuer, and the relative ranking of claims. All rating categories other than AAA and D also contain subcategories "(high)" and "(low)". The absence of either a "(high)" or "(low)" designation indicates the rating is in the middle of the category.

AAA: Highest credit quality. The capacity for the payment of financial obligations is exceptionally high and unlikely to be adversely affected by future events.

AA: Superior credit quality. The capacity for the payment of financial obligations is considered high. Credit quality differs from AAA only to a small degree. Unlikely to be significantly vulnerable to future events.

A: Good credit quality. The capacity for the payment of financial obligations is substantial, but of lesser credit quality than AA. May be vulnerable to future events, but qualifying negative factors are considered manageable.

BBB: Adequate credit quality. The capacity for the payment of financial obligations is considered acceptable. May be vulnerable to future events.

BB: Speculative, non-investment grade credit quality. The capacity for the payment of financial obligations is uncertain. Vulnerable to future events.

B: Highly speculative credit quality. There is a high level of uncertainty as to the capacity to meet financial obligations.

CCC, CC, C: Very highly speculative credit quality. In danger of defaulting on financial obligations. There is little difference between these three categories, although CC and C ratings are normally applied to obligations that are seen as highly likely to default, or subordinated to obligations rated in the CCC to B range. Obligations in respect of which default has not technically taken place but is considered inevitable may be rated in the C category.

D: When the issuer has filed under any applicable bankruptcy, insolvency or winding up statute or there is a failure to satisfy an obligation after the exhaustion of grace periods, a downgrade to D may occur. DBRS may also use SD (Selective Default) in cases where only some securities are impacted, such as the case of a "distressed exchange."



GLX-SX-010-1100
110