ck0001432353-20231031
Global
X Copper Miners ETF
NYSE
Arca: COPX
Global
X Silver Miners ETF
NYSE
Arca: SIL
Global
X Gold Explorers ETF
NYSE
Arca: GOEX
Global
X Uranium ETF
NYSE
Arca: URA
Prospectus
March 1,
2024
The
Securities and Exchange Commission ("SEC") has not approved or disapproved these
securities or passed upon the adequacy of this Prospectus. Any representation to
the contrary is a criminal offense.
Shares
in a Fund (defined below) are not guaranteed or insured by the Federal Deposit
Insurance Corporation or any other agency of the U.S. Government, nor are shares
deposits or obligations of any bank. Such shares in a Fund involve investment
risks, including the loss of principal.
TABLE
OF CONTENTS
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FUND
SUMMARIES |
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ADDITIONAL
INFORMATION ABOUT THE FUNDS |
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A
FURTHER DISCUSSION OF PRINCIPAL RISKS |
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A
FURTHER DISCUSSION OF OTHER RISKS |
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PORTFOLIO
HOLDINGS INFORMATION |
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FUND
MANAGEMENT |
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DISTRIBUTOR |
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BUYING
AND SELLING FUND SHARES |
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FREQUENT
TRADING |
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DISTRIBUTION
AND SERVICE PLAN |
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DIVIDENDS
AND DISTRIBUTIONS |
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TAXES |
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DETERMINATION
OF NET ASSET VALUE |
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PREMIUM/DISCOUNT
AND SHARE INFORMATION |
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TOTAL
RETURN INFORMATION |
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INFORMATION
REGARDING THE INDICES AND THE INDEX PROVIDERS |
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OTHER
SERVICE PROVIDERS |
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ADDITIONAL
INFORMATION |
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FINANCIAL
HIGHLIGHTS |
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OTHER
INFORMATION |
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FUND
SUMMARIES
Global X Copper Miners
ETF
Ticker:
COPX Exchange: NYSE Arca
INVESTMENT
OBJECTIVE
The
Global X Copper Miners ETF ("Fund") seeks to provide investment results that
correspond generally to the price and yield performance, before fees and
expenses, of the Solactive Global Copper Miners Total Return Index ("Underlying
Index").
FEES AND
EXPENSES
This table describes the fees and expenses that you may pay if you
buy, hold, and sell shares (“Shares”) of the Fund. You may pay other fees, such
as brokerage commissions and other fees to financial intermediaries, which are
not reflected in the table and examples below.
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment):
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Management
Fees: |
0.65% |
Distribution
and Service (12b-1) Fees: |
None |
Other
Expenses: |
0.00% |
Total
Annual Fund Operating Expenses: |
0.65% |
Example:
The following example
is intended to help you compare the cost of investing in the Fund with the cost
of investing in other funds. This example does not take into account customary
brokerage commissions that you pay when purchasing or selling Shares of the Fund
in the secondary market. The example assumes
that you invest $10,000 in the Fund for the time periods indicated and then sell
all of your Shares at the end of those periods. The example also assumes that
your investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:
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One
Year |
Three
Years |
Five
Years |
Ten
Years |
$66 |
$208 |
$362 |
$810 |
Portfolio
Turnover:
The Fund pays transaction costs, such as commissions, when it buys
and sells securities (or "turns over" its portfolio). A higher portfolio
turnover rate may indicate higher transaction costs and may result in higher
taxes when Shares are held in a taxable account. These costs, which are not
reflected in annual fund operating expenses or in the example, affect the Fund's
performance. During the most recent fiscal year, the Fund's portfolio turnover
rate was 23.73% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund invests at least 80% of its total assets in the securities of the Solactive
Global Copper Miners Total Return Index ("Underlying Index") and in American
Depositary Receipts ("ADRs") and Global Depositary Receipts ("GDRs") based on
the securities in the Underlying Index. The Fund also invests at least 80% of
its total assets in securities of companies that are economically tied to the
copper mining industry. Companies economically tied to the copper mining
industry include those engaged in copper mining and/or closely related
activities such as exploration and refining. The Fund's 80% investment policies
are non-fundamental and require 60 days prior written notice to shareholders
before they can be changed. The Fund may lend securities representing up to
one-third of the value of the Fund’s total assets (including the value of the
collateral received).
The
Underlying Index is designed to measure broad-based equity market performance of
global companies involved in the copper mining industry, as defined by Solactive
AG, the provider of the Underlying Index ("Index Provider"). As of
December 31, 2023, the Underlying Index had 37 constituents, 34 of which
are foreign companies. The Fund's investment objective and Underlying Index may
be changed without shareholder approval.
The
Underlying Index is sponsored by 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.
The
Adviser uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try to
outperform the Underlying Index and does not seek temporary defensive positions
when markets decline or appear overvalued.
The
Fund generally will use a replication strategy. A replication strategy is an
indexing strategy that involves investing in the securities of the Underlying
Index in approximately the same proportions as in the Underlying Index. However,
the Fund may utilize a representative sampling strategy with respect to the
Underlying Index when a replication strategy might be detrimental or
disadvantageous to shareholders, such as when there are practical difficulties
or substantial costs involved in compiling a portfolio of equity securities to
replicate the Underlying Index, in instances in which a security in the
Underlying Index becomes temporarily illiquid, unavailable or less liquid, or as
a result of legal restrictions or limitations (such as tax diversification
requirements) that apply to the Fund but not the Underlying Index.
The
Adviser expects that, over time, the correlation between the Fund's performance
and that of the Underlying Index, before fees and expenses, will exceed 95%. A
correlation percentage of 100% would indicate perfect correlation. If the Fund
uses a replication strategy, it can be expected to have greater correlation to
the Underlying Index than if it uses a representative sampling
strategy.
The Fund
concentrates its investments (i.e., holds 25% or more of its total assets) in a
particular industry or group of industries to approximately the same extent that
the Underlying Index is concentrated. As of December 31, 2023, the
Underlying Index was concentrated in the metals and mining industry and had
significant exposure to the materials
sector.
SUMMARY OF PRINCIPAL
RISKS
As with any
investment, you could lose all or part of your investment in the Fund, and the
Fund’s performance could trail that of other investments. There
is no guarantee that the Fund will achieve its investment objective.
An investment in the Fund is not a bank deposit and it is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency, the Adviser or any of its affiliates. The
Fund is subject to the principal risks noted below, any of which may adversely
affect the Fund’s net asset value (“NAV”), trading price, yield, total return
and ability to meet its investment objective, as well as other risks that are
described in greater detail in the Additional
Information About the Funds
section of this Prospectus and in the Statement of Additional Information
(“SAI”). The order of the below risk factors does not indicate the significance
of any particular risk factor.
Asset
Class Risk:
Securities and other assets in the Underlying Index or otherwise held in the
Fund's portfolio may underperform in comparison to the general securities
markets, a particular securities market or other asset classes.
Equity
Securities Risk: Equity securities are subject to
changes in value, and their values may be more volatile than other asset
classes, as a result of such factors as a company’s business performance,
investor perceptions, stock market trends and general economic
conditions.
Capitalization
Risk:
Investing in issuers within the same market capitalization category carries the
risk that the category may be out of favor due to current market conditions or
investor sentiment.
Large-Capitalization
Companies Risk: Large-capitalization
companies may trail the returns of the overall stock market.
Large-capitalization stocks tend to go through cycles of doing better - or worse
- than the stock market in general. These periods have, in the past, lasted for
as long as several years.
Mid-Capitalization
Companies Risk: Mid-capitalization
companies may have greater price volatility, lower trading volume and less
liquidity than large-capitalization companies. In addition, mid-capitalization
companies may have smaller revenues, narrower product lines, less management
depth and experience, smaller shares of their product or service markets, fewer
financial resources and less competitive strength than large-capitalization
companies.
Small-Capitalization
Companies Risk: Compared to mid- and
large-capitalization companies, small-capitalization companies may be less
stable and more susceptible to adverse developments, and their securities may be
more volatile and less liquid.
Commodity
Exposure Risk: The Fund invests in companies engaged in the copper mining industry,
which may be susceptible to fluctuations in the underlying commodities market.
Commodity prices may be influenced or characterized by unpredictable factors,
including, where applicable, high volatility, changes in supply and demand
relationships, weather, agriculture, trade, changes in interest rates and
monetary and other governmental policies, action and inaction. Securities of
companies held by the Fund that are dependent on a single commodity, or are
concentrated on a single commodity sector, may typically exhibit even higher
volatility attributable to commodity prices.
Commodity
Price Relationship Risk:
The Underlying Index measures the performance of companies involved in the
copper mining industry and not the performance of the price of copper itself.
The securities of companies involved in the copper mining industry may under- or
over-perform the price of copper over the short-term or the
long-term.
Currency
Risk: The Fund may invest in securities denominated in foreign
currencies. Because the Fund's NAV is determined in U.S. dollars, the Fund's NAV
could decline if currencies of the underlying securities depreciate against the
U.S. dollar or if there are delays or limits on repatriation of such currencies.
Currency exchange rates can be very volatile and can change quickly and
unpredictably. As a result, the Fund's NAV may change quickly and without
warning, which could have a significant negative impact on the
Fund.
Custody
Risk: The Fund may hold foreign securities and cash with foreign banks,
agents, and securities depositories appointed by the Fund's custodian.
Investments in emerging markets may be subject to even greater custody risks
than investments in more developed markets. Less developed markets are more
likely to experience problems with the clearing and settling of trades and the
holding of securities by local banks, agents and depositories.
Focus
Risk:
To the extent that the Underlying Index focuses in investments related to a
particular industry or group of industries, the Fund will also focus its
investments to approximately the same extent. Similarly, if the Underlying Index
has significant exposure to one or more sectors, the Fund’s investments will
likely have significant exposure to such sectors. In such event, the Fund’s
performance will be particularly susceptible to adverse events impacting such
industry or sector, which may include, but are not limited to, the following:
general economic conditions or cyclical market patterns that could negatively
affect supply and demand; competition for resources; adverse labor relations;
political or world events; obsolescence of technologies; and increased
competition or new product introductions that may affect the profitability or
viability of companies in a particular industry or sector. As a result, the
value of the Fund’s investments may rise and fall more than the value of shares
of a fund that invests in securities of companies in a broader range of
industries or sectors.
Risks
Related to Investing in the Exploration Industry:
The exploration and development of mineral deposits involve significant
financial risks over a significant period of time, which even a combination of
careful evaluation, experience and knowledge may not eliminate. Few properties
which are explored are ultimately developed into producing mines. Major
expenditures may be required to establish reserves by drilling and to construct
mining and processing facilities at a site. In addition, mineral exploration
companies typically operate at a loss and are dependent on securing equity
and/or debt financing, which might be more difficult to secure for an
exploration company than for a more established
counterpart.
Risks
Related to Investing in the Materials Sector:
Companies in the materials sector are affected by commodity price volatility,
exchange rates, import controls and worldwide competition. At times, worldwide
production of industrial materials has exceeded demand, leading to poor
investment returns or outright losses. Issuers in the materials sector are at
risk of depletion of resources, technological progress, labor relations,
governmental regulations and environmental damage and product liability
claims.
Risks
Related to Investing in the Metals and Mining Industry:
Securities in the Fund's portfolio may be significantly subject to the effects
of competitive pressures in the copper mining industry and the price of copper.
The price of copper may be affected by changes in inflation rates, interest
rates, monetary policy, economic conditions, and political stability. Commodity
prices may fluctuate substantially over short periods of time; therefore, the
Fund’s Share price may be more volatile than other types of investments. In
addition, metals and mining companies may also be significantly affected by
import controls, worldwide competition, liability for environmental damage,
depletion of resources, and mandated expenditures for safety and pollution
control devices. Metals and mining companies may have significant operations in
areas at risk for social and political unrest, security concerns and
environmental damage. These companies may also be at risk for increased
government regulation and intervention. Such risks may adversely affect the
issuers to which the Fund has
exposure.
Foreign
Securities Risk: The Fund may invest, within U.S. regulations, in foreign
securities. The Fund's investments in foreign securities can be riskier than
U.S. securities investments. Investments in the securities of foreign issuers
(including investments in American Depositary Receipts (“ADRs”) and Global
Depositary Receipts (“GDRs”)) are subject to the risks associated with investing
in those foreign markets, such as heightened risks of inflation or
nationalization. The prices of foreign securities and the prices of U.S.
securities have, at times, moved in opposite directions. In addition, securities
of foreign issuers may lose value due to political, economic and geographic
events affecting a foreign issuer or market. During periods of social, political
or economic instability in a country or region, the value of a foreign security
traded on U.S. exchanges could be affected by, among other factors, increasing
price volatility, illiquidity, or the closure of the primary market on which the
security (or the security underlying the ADR or GDR) is traded. The Fund may
lose money due to political, economic and geographic events affecting a foreign
issuer or market. Where all or a portion of the Fund's underlying securities
trade in a market that is closed when the market in which the Fund's Shares are
listed and trading is open, there may be differences between the last quote from
the security’s closed foreign market and the value of the security during the
Fund’s domestic trading day. This, in turn, could lead to differences between
the market price of the Fund’s Shares and the underlying value of those
shares.
Geographic
Risk: A
natural, biological or other disaster could occur in a geographic region in
which the Fund invests, which could affect the economy or particular business
operations of companies in the specific geographic region, causing an adverse
impact on the Fund’s investments in the affected region or in a region
economically tied to the affected region. The securities in which the Fund
invests and, consequently, the Fund are also subject to specific risks as a
result of their business operations, including, but not limited to:
Risk
of Investing in Australia: Investments
in Australian issuers may subject the Fund to regulatory, political, currency,
security, and economic risk specific to Australia. The Australian economy is
heavily dependent on exports from the energy, agricultural and mining sectors.
This makes the Australian economy susceptible to fluctuations in the commodity
markets. Australia is also dependent on trading with key trading
partners.
Risk
of Investing in Canada: The Canadian economy is highly dependent on the demand for and
price of natural resources. As a result, the Canadian market is relatively
concentrated in issuers involved in the production and distribution of natural
resources and any changes in these sectors could have an adverse impact on the
Canadian economy. The Canadian economy is heavily dependent on relationships
with certain key trading partners, including the United States and China.
Developments in the United States, including renegotiation of the North American
Free Trade Agreement (“NAFTA”) and ratification of the successor United
States-Mexico-Canada Agreement (“USMCA”), which went into effect on July 1,
2020, as well as the imposition of additional tariffs by the United States, may
have implications for the trade arrangements between the United States and
Canada, which could negatively affect the value of securities held by the
Fund.
Risk
of Investing in Chile:
Investments
in Chilean issuers involve risks that are specific to Chile, including legal,
regulatory, political, currency, environmental and economic risks. Among other
things, the Chilean economy is heavily dependent on the export of certain
commodities.
Risk
of Investing in China:
Investment exposure to China subjects the Fund to risks specific to China.
Economic,
Political and Social Risk
China
may be subject to considerable degrees of economic, political and social
instability. Concerns about the rising government and household debt levels
could impact the stability of the Chinese economy. China is an emerging market
and demonstrates significantly higher volatility from time to time in comparison
to developed markets. Over the last few decades, the Chinese government has
undertaken reform of economic and market practices, including recent reforms to
liberalize its capital markets and expand the sphere for private ownership of
property in China. However, Chinese markets generally continue to experience
inefficiency, volatility and pricing anomalies resulting from governmental
influence, a lack of publicly available information and/or political and social
instability. Chinese companies are also subject to the risk that Chinese
authorities can intervene in their operations and structure. Internal social
unrest or confrontations with other neighboring countries, including military
conflicts in response to such events, may also disrupt economic development in
China and result in a greater risk of currency fluctuations, currency
convertibility, interest rate fluctuations and higher rates of inflation.
China
has experienced major health crises. These health crises include, but are not
limited to, the rapid and pandemic spread of novel viruses commonly known as
SARS, MERS, and COVID-19 (Coronavirus). Such health crises could exacerbate
political, social, and economic risks previously mentioned.
Export
growth continues to be a major driver of China’s rapid economic growth. Elevated
trade tensions between China and its trading partners, including the imposition
of U.S. tariffs on certain Chinese goods and increased
international
pressure related to Chinese trade policy and forced technology transfers and
intellectual property protections, may have a substantial impact on the Chinese
economy. Reduction in spending on Chinese products and services, institution of
additional tariffs or other trade barriers (including as a result of heightened
trade tensions between China and the U.S. or in response to actual or alleged
Chinese cyber activity), or a downturn in any of the economies of China’s key
trading partners may have an adverse impact on the Chinese economy. The
continuation or worsening of the current political climate between China and the
U.S. could result in additional regulatory restrictions being contemplated or
imposed in the U.S. or in China that could impact the Fund’s ability to invest
in certain companies.
Security
Risk
China
has experienced security concerns, such as terrorism and strained international
relations. Additionally, China is alleged to have participated in
state-sponsored cyberattacks against foreign companies and foreign governments.
Actual and threatened responses to such activity, including purchasing
restrictions, sanctions, tariffs or cyberattacks on the Chinese government or
Chinese companies, may impact China’s economy and Chinese issuers of securities
in which the Fund invests. Incidents involving China’s or the region’s security,
including the contagion of infectious viruses or diseases, may cause uncertainty
in Chinese markets and may adversely affect the Chinese economy and the Fund’s
investments.
Heavy
Government Control and Regulation
Chinese
companies, including Chinese companies that are listed on U.S. exchanges, are
not subject to the same degree of regulatory requirements, accounting standards
or auditor oversight as companies in more developed countries, and as a result,
information about the Chinese securities in which the Fund invests may be less
reliable or complete. There may be significant obstacles to obtaining
information necessary for investigations into or litigation against Chinese
companies and shareholders may have limited legal remedies. Investments in China
may be subject to loss due to expropriation or nationalization of assets and
property or the imposition of restrictions on foreign investments and
repatriation of capital. Furthermore, government actions against leaders or
other key figures within companies, or speculation about such actions, may lead
to sudden and unpredictable falls in the value of securities within the
Fund.
Tax
Risk
China
has implemented a number of tax reforms in recent years and may amend or revise
its existing tax laws and/or procedures in the future, possibly with retroactive
effect. Changes in applicable Chinese tax law could reduce the after-tax profits
of the Fund, directly or indirectly, including by reducing the after-tax profits
of companies in China in which the Fund invests. Uncertainties in Chinese tax
rules could result in unexpected tax liabilities for the Fund. Should
legislation limit U.S. investors’ ability to invest in specific Chinese
companies through A-shares or other share class listings that are part of the
underlying holdings, these shares may be excluded from Fund
holdings.
Special
Risk Considerations of Investing in China – Variable Interest Entity
Investments
For
purposes of raising capital offshore on exchanges outside of China, including on
U.S. exchanges, many Chinese-based operating companies are structured as
Variable Interest Entities (“VIEs”). In this structure, the Chinese-based
operating company is the VIE and establishes a shell company in a foreign
jurisdiction, such as the Cayman Islands. The shell company lists on a foreign
exchange and enters into contractual arrangements with the VIE. This structure
allows Chinese companies in which the Chinese government restricts foreign
ownership to raise capital from foreign investors. While the shell company has
no equity ownership of the VIE, these contractual arrangements permit the shell
company to consolidate the VIE’s financial statements with its own for
accounting purposes and provide for economic exposure to the performance of the
underlying Chinese operating company.
Therefore,
an investor in the listed shell company, such as the Fund, will have exposure to
the Chinese-based operating company only through contractual arrangements and
has no ownership in the Chinese-based operating company. Furthermore, because
the shell company only has specific rights provided for in these service
agreements with the VIE, its abilities to control the activities at the
Chinese-based operating company are limited and the operating company may engage
in activities that negatively impact investment value.
While
the VIE structure has been widely adopted, it is not formally recognized under
Chinese law and therefore there is a risk that the Chinese government could
prohibit the existence of such structures or negatively impact the VIE’s
contractual arrangements with the listed shell company by making them invalid.
If these contracts were found to be unenforceable under Chinese law, investors
in the listed shell company, such as the Fund, may suffer significant losses
with little or no recourse available. If the Chinese government determines that
the agreements establishing the VIE structures do not comply with Chinese law
and regulations, including those related to restrictions on foreign ownership,
it could subject a Chinese-based issuer to penalties, revocation of business and
operating licenses, or forfeiture of ownership interest. In addition, the listed
shell company’s control over a VIE may also be jeopardized if a natural person
who holds the equity interest in the VIE breaches the terms of the agreement, is
subject to legal proceedings or if any physical instruments for authenticating
documentation, such as chops and seals, are used without the Chinese-based
issuer’s authorization to enter into contractual arrangements in China. Chops
and seals, which are carved stamps used to sign documents, represent a legally
binding commitment by the company. Moreover, any future
regulatory
action may prohibit the ability of the shell company to receive the economic
benefits of the Chinese-based operating company, which may cause the value of
the Fund’s investment in the listed shell company to suffer a significant loss.
For example, in 2021, the Chinese government prohibited use of the VIE structure
for investment in after-school tutoring companies. There is no guarantee that
the Chinese government will not place similar restrictions on other
industries.
Chinese
equities that utilize the VIE structure to list in the U.S. as ADRs face the
risk of regulatory action from U.S. authorities, including the risk of
delisting. This will depend in part on whether U.S. regulatory authorities are
satisfied with their access to mainland China and Hong Kong for the purpose of
conducting inspections on the quality of audits for these companies. Although
the U.S. and China reached an agreement in September 2022 to grant the U.S.
access for such inspections, there is no guarantee that the agreement will be
enforced or that U.S. regulatory authorities will continue to feel satisfied
with their access.
Risk
of Investing in Developed Markets: The
Fund’s investment in a developed country issuer may subject the Fund to
regulatory, political, currency, security, economic and other risks associated
with developed countries. Developed countries tend to represent a significant
portion of the global economy and have generally experienced slower economic
growth than some less developed countries. Certain developed countries have
experienced security concerns, such as terrorism and strained international
relations. Incidents involving a country’s or region’s security may cause
uncertainty in its markets and may adversely affect its economy and the Fund’s
investments. In addition, developed countries may be impacted by changes to the
economic conditions of certain key trading partners, regulatory burdens, debt
burdens and the price or availability of certain
commodities.
Risk
of Investing in Emerging Markets:
The Fund targets copper mining companies globally and is expected to invest in
securities in emerging market countries. Investments in emerging markets may be
subject to a greater risk of loss than investments in developed markets.
Securities markets of emerging market countries are less liquid, subject to
greater price volatility, have smaller market capitalizations, have less
government regulation, and are not subject to as extensive and frequent
accounting, financial, and other reporting requirements as the securities
markets of more developed countries, and there may be greater risk associated
with the custody of securities in emerging markets. It may be difficult or
impossible for the Fund to pursue claims against an emerging market issuer in
the courts of an emerging market country.
There may be significant obstacles to obtaining information
necessary for investigations into or litigation against emerging market
companies and shareholders may have limited legal rights and remedies. Emerging
markets may be more likely to experience inflation, political turmoil and rapid
changes in economic conditions than more developed markets. Emerging market
economies’ exposure to specific industries, such as tourism, and lack of
efficient or sufficient health care systems, could make these economies
especially vulnerable to global crises, including but not limited to, pandemics
such as the global COVID-19 pandemic. Certain emerging market countries may have
privatized, or have begun the process of privatizing, certain entities and
industries. Privatized entities may lose money or be
re-nationalized.
Risk
of Investing in Frontier and Standalone Markets: The Fund targets copper mining companies globally and is expected to
invest in securities in frontier market countries. Standalone markets are those
that do not meet the criteria for classification as frontier markets or emerging
markets. Because standalone markets often face highly unique circumstances that
range from war to liquidity issues, investors should carefully assess each
market and determine the reason for standalone classification prior to making
any investment. In some cases, standalone markets may be subject to significant
sanctions by the international community and may abruptly lose foreign investors
as a result. Investments in frontier markets may be subject to a greater risk of
loss than investments in more developed and traditional emerging market.
Frontier markets often have less uniformity in accounting and reporting
requirements, unreliable securities valuations and greater risk associated with
custody of securities. Economic, political, liquidity and currency risks may be
more pronounced with respect to investments in frontier markets than in emerging
markets and developed markets. Frontier market countries generally have smaller
economies or less developed capital markets than traditional emerging markets,
and, as a result, the risks of investing in emerging markets countries are
magnified in frontier countries. The economies of frontier countries are less
correlated to global economic cycles than those of their more developed
counterparts and their markets have low trading volumes and the potential for
extreme price volatility and illiquidity. These factors make investing in
standalone and frontier markets significantly riskier than in other countries
and any one of them could cause the price of the Fund's Shares to
decline.
Risk
of Investing in Mexico: Investments
in Mexican issuers involve risks that are specific to Mexico, including legal,
regulatory, political, currency, security and economic risks. In the past,
Mexico has experienced high interest rates, economic volatility and high
unemployment rates. Political developments in the U.S. have potential
implications for the trade arrangements between the U.S. and Mexico, which could
negatively affect the value of securities held by the
Fund.
Risk
of Investing in Poland: Poland’s economy is still relatively
underdeveloped and is heavily dependent on relationships with certain key
trading partners, including Germany and other European Union countries. As a
result, Poland’s continued growth is dependent on the growth of these
economies.
International
Closed Market Trading Risk: To
the extent that the underlying investments held by the Fund trade on foreign
exchanges that may be closed when the securities exchange on which the Fund’s
Shares trade is open, there are likely to be deviations between the current
price of such an underlying security and the last quoted price for the
underlying security (i.e., the Fund’s quote from the closed foreign market).
These deviations could result in premiums or discounts to the Fund’s NAV that
may be greater than those experienced by other exchange-traded funds
("ETFs").
Investable
Universe of Companies Risk: The investable universe of companies in which the Fund may invest
may be limited. If a company no longer meets the Index Provider’s criteria for
inclusion in the Underlying Index, the Fund may need to reduce or eliminate its
holdings in that company. The reduction or elimination of the Fund’s holdings in
the company may have an adverse impact on the liquidity of the Fund’s overall
portfolio holdings and on Fund performance.
Issuer
Risk: Fund performance depends on the performance of individual companies
in which the Fund invests. Changes to the financial condition of any of those
companies may cause the value of such company's securities to
decline.
Market
Risk: Turbulence in the financial markets and reduced liquidity may
negatively affect issuers, which could have an adverse effect on the Fund. If
the securities held by the Fund experience poor liquidity, the Fund may be
unable to transact at advantageous times or prices, which may decrease the
Fund’s returns. In addition, there is a risk that policy changes by central
governments and governmental agencies, including the U.S. Federal Reserve or the
European Central Bank, which could include increasing interest rates, could
cause increased volatility in financial markets and lead to higher levels of
Fund redemptions from Authorized Participants, which could have a negative
impact on the Fund. Furthermore, local, regional or global events such as war,
acts of terrorism, the spread of infectious illness or other public health
issues, recessions, raising of interest rates, or other events could have a
significant impact on the Fund and its investments and trading of its Shares.
This increases the risk that monetary policy may provide less support should
economic growth slow. Additionally, China’s shift away from a zero-COVID policy
creates both opportunities and risks, causing uncertainty for global economic
growth. Market risk factors may result in increased volatility and/or decreased
liquidity in the securities markets. The Fund’s NAV could decline over short
periods due to short-term market movements and over longer periods during market
downturns.
Non-Diversification
Risk:
The Fund is classified as a “non-diversified” investment company under the
Investment Company Act of 1940 ("1940 Act"). As a result, the Fund is subject to
the risk that it may be more volatile than a diversified fund because the Fund
may invest its assets in a smaller number of issuers or may invest a larger
proportion of its assets in a single issuer. As a result, the gains and losses
on a single investment may have a greater impact on the Fund’s NAV and may make
the Fund more volatile than more diversified funds.
Operational
Risk: The Fund is exposed to operational risk arising from a number of
factors, including but not limited to human error, processing and communication
errors, errors of the Fund's service providers, counterparties or other
third-parties, failed or inadequate processes and technology or systems
failures. Additionally, cyber security failures or breaches of the electronic
systems of the Fund, the Adviser, and the Fund's other service providers, market
makers, Authorized Participants or the issuers of securities in which the Fund
invests have the ability to cause disruptions and negatively impact the Fund's
business operations, potentially resulting in financial losses to the Fund and
its shareholders. The Fund and the Adviser seek to reduce these operational
risks through controls and procedures. However, these measures do not address
every possible risk and may be inadequate for those risks that they are intended
to address.
Passive
Investment Risk:
The Fund is not actively managed, and the Adviser does not attempt to take
defensive positions in declining markets. Unlike many investment companies, the
Fund does not seek to outperform its Underlying Index. Therefore, it would not
necessarily buy or sell a security unless that security is added or removed,
respectively, from the Underlying Index, even if that security generally is
underperforming. Additionally, if a constituent of the Underlying Index were
removed, even outside of a regular rebalance of the Underlying Index, the
Adviser anticipates that the Fund would sell such security. Maintaining
investments in securities regardless of market conditions or the performance of
individual securities could cause the Fund’s return to be lower than if the Fund
employed an active strategy.
Index-Related
Risk:
There is no guarantee that the Fund will achieve a high degree of correlation to
the Underlying Index and therefore achieve its investment objective. Market
disruptions and regulatory restrictions could have an adverse effect on the
Fund’s ability to adjust its exposure to the required levels in order to track
the Underlying Index. Errors in index data, index computations and/or the
construction of the Underlying Index in accordance with its
methodology may occur from time to time and may not be identified
and corrected by the Index Provider for a period of time or at all, which may
have an adverse impact on the Fund and its shareholders.
Management
Risk: The Fund may not fully replicate its Underlying Index and may hold
securities not included in its Underlying Index. The Adviser’s investment
strategy, the implementation of which is subject to a number of constraints, may
cause the Fund to underperform the market or its relevant benchmark or adversely
affect the ability of the Fund to achieve its investment
objective.
Tracking
Error Risk: Tracking error may occur because of
differences between the instruments held in the Fund's portfolio and those
included in the Underlying Index, pricing differences, transaction costs
incurred by the Fund, the Fund's holding of uninvested cash, size of the Fund,
differences in timing of the accrual of or the valuation of dividends or
interest, tax gains or losses, changes to the Underlying Index or the costs to
the Fund of complying with various new or existing regulatory requirements. This
risk may be heightened during times of increased market volatility or other
unusual market conditions. Tracking error also may result because the Fund
incurs fees and expenses, while the Underlying Index does not. ETFs that track
indices with significant weight in emerging markets issuers may experience
higher tracking error than other ETFs that do not track such
indices.
Risks
Associated with Exchange-Traded Funds:
As an ETF, the Fund is subject to the following risks:
Authorized
Participants Concentration Risk: The Fund has a limited number of financial institutions that may
act as Authorized Participants and engage in creation or redemption transactions
directly with the Fund, and none of those Authorized Participants is obligated
to engage in creation and/or redemption transactions. To the extent that those
Authorized Participants exit the business or are unable to process creation
and/or redemption orders, such as in times of market stress, Shares may be more
likely to trade at a premium or discount to NAV and/or at wider intraday bid-ask
spreads, and possibly face trading halts and/or delisting from an exchange.
Authorized Participants Concentration Risk may be heightened because the Fund
invests in non-U.S. securities.
Large
Shareholder Risk: Redemptions
by large shareholders could have a significant negative impact on the Fund. If a
large shareholder were to redeem all, or a large portion, of its Shares, there
is no guarantee that the Fund will be able to maintain sufficient assets to
continue operations in which case the Board of Trustees may determine to
liquidate the Fund. In addition, transactions by large shareholders may account
for a large percentage of the trading volume on a national securities exchange
and may, therefore, have a material upward or downward effect on the market
price of the Shares.
Listing
Standards Risk: The
Fund is required to comply with listing requirements adopted by the listing
exchange. Non-compliance with such requirements may result in the Fund's shares
being delisted by the listing exchange. Any resulting liquidation of the Fund
could cause the Fund to incur elevated transaction costs and could result in
negative tax consequences for its shareholders.
Market
Trading Risks and Premium/Discount
Risks: Shares of the Fund are publicly traded
on a national securities exchange, which may subject shareholders to numerous
market trading risks. In stressed market conditions, the market for the Shares
may become less liquid in response to the deteriorating liquidity of the Fund’s
portfolio. This adverse effect on the liquidity of the Shares, as well as
disruptions to creations and redemptions, the existence of extreme market
volatility or potential lack of assets in the Fund or an active trading market
for Shares may result in Shares trading at a significant premium or discount to
NAV. If a shareholder purchases Shares at a time when the market price is at a
premium to the NAV or sells Shares at a time when the market price is at a
discount to the NAV, the shareholder may sustain losses. The NAV of the Fund is
calculated at the end of each business day and fluctuates with changes in the
market value of the Fund’s holdings. The trading price of the Fund’s Shares
fluctuates, in some cases materially, throughout trading hours in response to
changes in the Fund’s NAV.
Securities
Lending Risk: Securities lending involves a risk of loss because the borrower may
fail to return the securities in a timely manner or at all. If the Fund is not
able to recover the securities loaned, it may sell the collateral and purchase a
replacement security in the market. Lending securities entails a risk of loss to
the Fund if and to the extent that the market value of the loaned securities
increases and the collateral is not increased accordingly. Additionally, the
Fund will bear any loss on the investment of cash collateral it receives. These
events could also trigger adverse tax consequences for the Fund. As securities
on loan may not be voted by the Fund, there is a risk that the Fund may not be
able to recall the securities in sufficient time to vote on material proxy
matters.
Tax
Status Risk: The
Fund intends to pay dividends each taxable year to enable it to continue to
satisfy the distribution requirements necessary to qualify for treatment as a
regulated investment company ("RIC"). If the Fund were to distribute to its
shareholders less than the minimum amount required for any year, the Fund would
become subject to federal income tax for that year on all of its taxable income
and recognized gains, even those distributed to its shareholders. In addition,
under the Internal Revenue Code of 1986, as amended (the "Code"), the Fund may
not earn more than 10% of its annual gross income from gains resulting from the
sale of commodities and precious metals. This could make it more difficult for
the Fund to pursue its investment strategy and maintain qualification as a RIC.
In lieu of potential disqualification as a RIC, the Fund is permitted to pay a
tax for certain failures to satisfy this income requirement, which, in general,
are limited to those due to reasonable cause and not willful
neglect.
Trading
Halt Risk:
An exchange or market may close or issue trading halts on specific securities,
or the ability to buy or sell certain securities or financial instruments may be
restricted, which may result in the Fund being unable to buy or sell certain
securities or financial instruments. In such circumstances, the Fund may be
unable to rebalance its portfolio, may be unable to accurately price its
investments and/or may incur substantial trading
losses.
Valuation
Risk: The sales price the Fund could receive for a security may differ
from the Fund’s valuation of the security and may differ from the value used by
the Underlying Index, particularly for securities that trade in low value or
volatile markets or that are valued using a fair value methodology (such as
during trading halts). The value of the securities in the Fund's portfolio
may change on days when shareholders will not be able to purchase or sell the
Fund's Shares.
PERFORMANCE
INFORMATION
The bar chart
and table that follow show how the Fund performed on a calendar year basis and
provide an indication of the risks of investing in the Fund by showing changes
in the Fund's performance from year to year and by showing how the Fund's
average annual returns for the indicated periods compare with the Fund's
benchmark index and a broad measure of market performance.
The Fund's past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.globalxetfs.com.
Annual Total Returns
(Years Ended December 31)
|
|
|
|
|
|
|
| |
Best
Quarter: |
12/31/2020 |
47.85% |
Worst
Quarter: |
3/31/2020 |
-41.22% |
Average Annual
Total Returns (for the Periods Ended December 31,
2023)
|
|
|
|
|
|
|
|
|
|
| |
|
One
Year Ended December 31, 2023 |
Five
Years Ended December 31, 2023 |
Ten
Years Ended December 31. 2023 |
Global
X Copper Miners ETF: |
|
| |
·Return
before taxes |
9.30% |
17.81% |
4.99% |
·Return
after taxes on distributions1 |
8.74% |
17.24% |
4.52% |
·Return
after taxes on distributions and sale of Fund Shares1 |
5.98% |
14.39% |
3.84% |
Solactive
Global Copper Miners Total Return Index (net)
(Index returns reflect
invested dividends net of withholding taxes, but reflect no deduction for
fees, expenses, or other
taxes) |
9.80% |
18.44% |
5.57% |
MSCI
EAFE Index (net)
(Index returns reflect
invested dividends net of withholding taxes, but reflect no deduction for
fees, expenses, or other
taxes) |
18.24% |
8.16% |
4.28% |
1
After-tax returns are
calculated using the historical highest individual U.S. federal marginal income
tax rates and do not reflect the impact of state and local
taxes. Your actual after-tax returns
will depend on your specific tax situation and may differ from those shown
above. After-tax returns are not relevant to investors who hold Shares of the
Fund through tax-advantaged arrangements, such as 401(k) plans or individual
retirement accounts (IRAs).
FUND
MANAGEMENT
Investment
Adviser:
Global X Management Company LLC.
Portfolio
Managers:
The professionals primarily responsible for the day-to-day management of the
Fund are Nam To, CFA; Wayne Xie; Vanessa Yang; and Sandy Lu, CFA (“Portfolio
Managers”). Mr. To has been a Portfolio Manager of the Fund since March 1, 2018.
Mr. Xie has been a Portfolio Manager of the Fund since March 1, 2019. Ms. Yang
has been a Portfolio Manager of the Fund since December 2020. Mr. Lu has been a
Portfolio Manager of the Fund since March 2022.
PURCHASE
AND SALE OF FUND SHARES
Shares
of the Fund are or will be listed and traded at market prices on a national
securities exchange. Shares may only be purchased and sold on the exchange
through a broker-dealer. The price of Shares is based on market price, and
because ETF shares trade at market prices rather than at NAV, Shares may trade
at a price greater than NAV (a premium) or less than NAV (a discount). Only
“Authorized Participants” (as defined in the SAI) who have entered into
agreements with the Fund’s distributor, SEI Investments Distribution Co.
(“Distributor”), may engage in creation or redemption transactions directly with
the Fund. The Fund will only issue or redeem Shares that have been aggregated
into blocks called Creation Units. The Fund will issue or redeem Creation Units
in return for a basket of cash and/or securities that the Fund specifies any day
that the national securities exchanges are open for business (“Business Day”).
An investor may incur costs attributable to the difference between the highest
price a buyer is willing to pay to purchase shares of the Fund (bid) and the
lowest price a seller is willing to accept for shares of the Fund (ask) when
buying or selling shares in the secondary market (the “bid-ask spread”). To
access information regarding the Fund’s net asset value, market price, premiums
and discounts, and bid-ask spreads, please go to https://www.globalxetfs.com.
TAX
INFORMATION
The
Fund intends to make distributions that may be taxable to you as ordinary income
or capital gains, unless you are investing through a tax-advantaged arrangement,
such as a 401(k) plan or an individual retirement account ("IRA"), in which case
distributions from such tax-advantaged arrangement may be taxable to you.
PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
The
Adviser and its related companies may pay broker-dealers or other financial
intermediaries (such as a bank) for the sale of Fund Shares and related
services. These payments may create a conflict of interest by influencing your
broker-dealer, sales persons or other intermediary or its employees or
associated persons to recommend the Fund over another investment. Ask your
financial adviser or visit your financial intermediary’s website for more
information.
Global X Silver Miners
ETF
Ticker:
SIL Exchange: NYSE Arca
INVESTMENT
OBJECTIVE
The
Global X Silver Miners ETF ("Fund") seeks to provide investment results that
correspond generally to the price and yield performance, before fees and
expenses, of the Solactive Global Silver Miners Total Return Index ("Underlying
Index").
FEES AND
EXPENSES
This table describes the fees and expenses that you may pay if you
buy, hold, and sell shares (“Shares”) of the Fund. You may pay other fees, such
as brokerage commissions and other fees to financial intermediaries, which are
not reflected in the table and examples below.
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment):
|
|
|
|
| |
Management
Fees: |
0.65% |
Distribution
and Service (12b-1) Fees: |
None |
Other
Expenses: |
0.00% |
Total
Annual Fund Operating Expenses: |
0.65% |
Example:
The following example
is intended to help you compare the cost of investing in the Fund with the cost
of investing in other funds. This example does not take into account customary
brokerage commissions that you pay when purchasing or selling Shares of the Fund
in the secondary market. The example assumes
that you invest $10,000 in the Fund for the time periods indicated and then sell
all of your Shares at the end of those periods. The example also assumes that
your investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:
|
|
|
|
|
|
|
|
|
|
| |
One
Year |
Three
Years |
Five
Years |
Ten
Years |
$66 |
$208 |
$362 |
$810 |
Portfolio
Turnover:
The Fund pays transaction costs, such as commissions, when it buys
and sells securities (or "turns over" its portfolio). A higher portfolio
turnover rate may indicate higher transaction costs and may result in higher
taxes when Shares are held in a taxable account. These costs, which are not
reflected in annual fund operating expenses or in the example, affect the Fund's
performance. During the most recent fiscal year, the Fund's portfolio turnover
rate was 19.72% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund invests at least 80% of its total assets in the securities of the Solactive
Global Silver Miners Total Return Index ("Underlying Index") and in American
Depositary Receipts ("ADRs") and Global Depositary Receipts ("GDRs") based on
the securities in the Underlying Index. The Fund also invests at least 80% of
its total assets in securities of companies that are economically tied to the
silver mining industry. Companies economically tied to the silver mining
industry include those engaged in silver mining and/or closely related
activities such as exploration and refining. The Fund's 80% investment policies
are non-fundamental and require 60 days prior written notice to shareholders
before they can be changed. The Fund may lend securities representing up to
one-third of the value of the Fund’s total assets (including the value of the
collateral received).
The
Underlying Index is designed to measure broad-based equity market performance of
global companies involved in the silver mining industry, as defined by Solactive
AG, the provider of the Underlying Index ("Index Provider"). As of
December 31, 2023, the Underlying Index had 32 constituents, 22 of which
are foreign companies. The Fund's investment objective and Underlying Index may
be changed without shareholder approval.
The
Underlying Index is sponsored by 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.
The
Adviser uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try to
outperform the Underlying Index and does not seek temporary defensive positions
when markets decline or appear overvalued.
The
Fund generally will use a replication strategy. A replication strategy is an
indexing strategy that involves investing in the securities of the Underlying
Index in approximately the same proportions as in the Underlying Index. However,
the Fund may utilize a representative sampling strategy with respect to the
Underlying Index when a replication strategy might be detrimental or
disadvantageous to shareholders, such as when there are practical difficulties
or substantial costs involved in compiling a portfolio of equity securities to
replicate the Underlying Index, in instances in which a security in the
Underlying Index becomes temporarily illiquid, unavailable or less liquid, or as
a result of legal restrictions or limitations (such as tax diversification
requirements) that apply to the Fund but not the Underlying Index.
The
Adviser expects that, over time, the correlation between the Fund's performance
and that of the Underlying Index, before fees and expenses, will exceed 95%. A
correlation percentage of 100% would indicate perfect correlation. If the Fund
uses a replication strategy, it can be expected to have greater correlation to
the Underlying Index than if it uses a representative sampling
strategy.
The Fund
concentrates its investments (i.e., holds 25% or more of its total assets) in a
particular industry or group of industries to approximately the same extent that
the Underlying Index is concentrated. As of December 31, 2023, the
Underlying Index was concentrated in the metals and mining industry and had
significant exposure to the materials
sector.
SUMMARY OF PRINCIPAL
RISKS
As with any
investment, you could lose all or part of your investment in the Fund, and the
Fund’s performance could trail that of other investments. There
is no guarantee that the Fund will achieve its investment objective.
An investment in the Fund is not a bank deposit and it is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency, the Adviser or any of its affiliates. The
Fund is subject to the principal risks noted below, any of which may adversely
affect the Fund’s net asset value (“NAV”), trading price, yield, total return
and ability to meet its investment objective, as well as other risks that are
described in greater detail in the Additional
Information About the Funds
section of this Prospectus and in the Statement of Additional Information
(“SAI”). The order of the below risk factors does not indicate the significance
of any particular risk factor.
Asset
Class Risk:
Securities and other assets in the Underlying Index or otherwise held in the
Fund's portfolio may underperform in comparison to the general securities
markets, a particular securities market or other asset classes.
Equity
Securities Risk: Equity securities are subject to
changes in value, and their values may be more volatile than other asset
classes, as a result of such factors as a company’s business performance,
investor perceptions, stock market trends and general economic
conditions.
Capitalization
Risk:
Investing in issuers within the same market capitalization category carries the
risk that the category may be out of favor due to current market conditions or
investor sentiment.
Mid-Capitalization
Companies Risk: Mid-capitalization
companies may have greater price volatility, lower trading volume and less
liquidity than large-capitalization companies. In addition, mid-capitalization
companies may have smaller revenues, narrower product lines, less management
depth and experience, smaller shares of their product or service markets, fewer
financial resources and less competitive strength than large-capitalization
companies.
Small-Capitalization
Companies Risk: Compared to mid- and large-capitalization companies,
small-capitalization companies may be less stable and more susceptible to
adverse developments, and their securities may be more volatile and less
liquid.
Micro-Capitalization
Companies Risk: Stock
prices of micro-cap companies are significantly more volatile, and more
vulnerable to adverse business and economic developments, than those of larger
companies, and their earnings and revenues tend to be less predictable (and some
companies may experience significant losses). Microcap stocks may also be thinly
traded, making it difficult for the Fund to buy and sell
them.
Commodity
Exposure Risk: The Fund invests in companies engaged in the silver mining industry,
which may be susceptible to fluctuations in the underlying commodities market.
Commodity prices may be influenced or characterized by unpredictable factors,
including, where applicable, high volatility, changes in supply and demand
relationships, weather, agriculture, trade, changes in interest rates and
monetary and other governmental policies, action and inaction. Securities of
companies held by the Fund that are dependent on a single commodity, or are
concentrated on a single commodity sector, may typically exhibit even higher
volatility attributable to commodity prices.
Commodity
Price Relationship Risk:
The Underlying Index measures the performance of companies involved in the
silver mining industry and not the performance of the price of silver bullion
itself. The securities of companies involved in the silver mining industry may
under- or over-perform the price of silver bullion over the short-term or the
long-term.
Currency
Risk: The Fund may invest in securities denominated in foreign
currencies. Because the Fund's NAV is determined in U.S. dollars, the Fund's NAV
could decline if currencies of the underlying securities depreciate against the
U.S. dollar or if there are delays or limits on repatriation of such currencies.
Currency exchange rates can be very volatile and can change quickly and
unpredictably. As a result, the Fund's NAV may change quickly and without
warning, which could have a significant negative impact on the
Fund.
Custody
Risk: The Fund may hold foreign securities and cash with foreign banks,
agents, and securities depositories appointed by the Fund's custodian.
Investments in emerging markets may be subject to even greater custody risks
than investments in more developed markets. Less developed markets are more
likely to experience problems with the clearing and settling of trades and the
holding of securities by local banks, agents and depositories.
Focus
Risk:
To the extent that the Underlying Index focuses in investments related to a
particular industry or group of industries, the Fund will also focus its
investments to approximately the same extent. Similarly, if the Underlying Index
has significant exposure to one or more sectors, the Fund’s investments will
likely have significant exposure to such sectors. In such event, the Fund’s
performance will be particularly susceptible to adverse events impacting such
industry or sector, which may include, but are not limited to, the following:
general economic conditions or cyclical market patterns that could negatively
affect supply and demand; competition for resources; adverse labor relations;
political or world events; obsolescence of technologies; and increased
competition or new product introductions that may affect the profitability or
viability of companies in a particular industry or sector. As a result, the
value of the Fund’s investments may rise and fall more than the value of shares
of a fund that invests in securities of companies in a broader range of
industries or sectors.
Risks
Related to Investing in the Exploration Industry:
The exploration and development of mineral deposits involve significant
financial risks over a significant period of time, which even a combination of
careful evaluation, experience and knowledge may not eliminate. Few properties
which are explored are ultimately developed into producing mines. Major
expenditures may be required to establish reserves by drilling and to construct
mining and processing facilities at a site. In addition, mineral exploration
companies typically operate at a loss and are dependent on securing equity
and/or debt financing, which might be more difficult to secure for an
exploration company than for a more established
counterpart.
Risks
Related to Investing in the Materials Sector:
Companies in the materials sector are affected by commodity price volatility,
exchange rates, import controls and worldwide competition. At times, worldwide
production of industrial materials has exceeded demand, leading to poor
investment returns or outright losses. Issuers in the materials sector are at
risk of depletion of resources, technological progress, labor relations,
governmental regulations and environmental damage and product liability
claims.
Risks
Related to Investing in the Metals and Mining Industry:
Securities in the Fund's portfolio may be significantly subject to the effects
of competitive pressures in the silver mining industry and the price of silver
bullion. The price of silver may be affected by changes in inflation rates,
interest rates, monetary policy, economic conditions, and political stability.
Commodity prices may fluctuate substantially over short periods of time;
therefore, the Fund’s Share price may be more volatile than other types of
investments. In addition, metals and mining companies may also be significantly
affected by import controls, worldwide competition, liability for environmental
damage, depletion of resources, and mandated expenditures for safety and
pollution control devices. Metals and mining companies may have significant
operations in areas at risk for social and political unrest, security concerns
and environmental damage. These companies may also be at risk for increased
government regulation and intervention. Such risks may adversely affect the
issuers to which the Fund has
exposure.
Foreign
Securities Risk:
The Fund may invest, within U.S. regulations, in foreign securities. The Fund's
investments in foreign securities can be riskier than U.S. securities
investments. Investments in the securities of foreign issuers (including
investments
in American Depositary Receipts (“ADRs”) and Global Depositary
Receipts (“GDRs”)) are subject to the risks associated with investing in those
foreign markets, such as heightened risks of inflation or nationalization. The
prices of foreign securities and the prices of U.S. securities have, at times,
moved in opposite directions. In addition, securities of foreign issuers may
lose value due to political, economic and geographic events affecting a foreign
issuer or market. During periods of social, political or economic instability in
a country or region, the value of a foreign security traded on U.S. exchanges
could be affected by, among other factors, increasing price volatility,
illiquidity, or the closure of the primary market on which the security (or the
security underlying the ADR or GDR) is traded. The Fund may lose money due to
political, economic and geographic events affecting a foreign issuer or market.
Where all or a portion of the Fund's underlying securities trade in a market
that is closed when the market in which the Fund's Shares are listed and trading
is open, there may be differences between the last quote from the security’s
closed foreign market and the value of the security during the Fund’s domestic
trading day. This, in turn, could lead to differences between the market price
of the Fund’s Shares and the underlying value of those shares.
Geographic
Risk: A
natural, biological or other disaster could occur in a geographic region in
which the Fund invests, which could affect the economy or particular business
operations of companies in the specific geographic region, causing an adverse
impact on the Fund’s investments in the affected region or in a region
economically tied to the affected region. The securities in which the Fund
invests and, consequently, the Fund are also subject to specific risks as a
result of their business operations, including, but not limited to:
Risk
of Investing in Brazil: Investment
in Brazilian issuers involves risks that are specific to Brazil, including
legal, regulatory, political and economic risks. The Brazilian economy has
historically been exposed to high rates of inflation, debt, corruption, and
violence, each of which may reduce and/or prevent economic
growth.
Risk
of Investing in Canada: The Canadian economy is highly dependent on the demand for and
price of natural resources. As a result, the Canadian market is relatively
concentrated in issuers involved in the production and distribution of natural
resources and any changes in these sectors could have an adverse impact on the
Canadian economy. The Canadian economy is heavily dependent on relationships
with certain key trading partners, including the United States and China.
Developments in the United States, including renegotiation of the North American
Free Trade Agreement (“NAFTA”) and ratification of the successor United
States-Mexico-Canada Agreement (“USMCA”), which went into effect on July 1,
2020, as well as the imposition of additional tariffs by the United States, may
have implications for the trade arrangements between the United States and
Canada, which could negatively affect the value of securities held by the
Fund.
Risk
of Investing in Developed Markets:
The Fund’s investment in a developed country issuer may subject the Fund to
regulatory, political, currency, security, economic and other risks associated
with developed countries. Developed countries tend to represent a significant
portion of the global economy and have generally experienced slower economic
growth than some less developed countries. Certain developed countries have
experienced security concerns, such as terrorism and strained international
relations. Incidents involving a country’s or region’s security may cause
uncertainty in its markets and may adversely affect its economy and the Fund’s
investments. In addition, developed countries may be impacted by changes to the
economic conditions of certain key trading partners, regulatory burdens, debt
burdens and the price or availability of certain
commodities.
Risk
of Investing in Emerging Markets:
The Fund targets silver mining companies globally and is expected to invest in
securities in emerging market countries. Investments in emerging markets may be
subject to a greater risk of loss than investments in developed markets.
Securities markets of emerging market countries are less liquid, subject to
greater price volatility, have smaller market capitalizations, have less
government regulation, and are not subject to as extensive and frequent
accounting, financial, and other reporting requirements as the securities
markets of more developed countries, and there may be greater risk associated
with the custody of securities in emerging markets. It may be difficult or
impossible for the Fund to pursue claims against an emerging market issuer in
the courts of an emerging market country.
There may be significant obstacles to obtaining information
necessary for investigations into or litigation against emerging market
companies and shareholders may have limited legal rights and remedies. Emerging
markets may be more likely to experience inflation, political turmoil and rapid
changes in economic conditions than more developed markets. Emerging market
economies’ exposure to specific industries, such as tourism, and lack of
efficient or sufficient health care systems, could make these economies
especially vulnerable to global crises, including but not limited to, pandemics
such as the global COVID-19 pandemic. Certain emerging market countries may have
privatized, or have begun the process of privatizing, certain entities and
industries. Privatized entities may lose money or be
re-nationalized.
Risk
of Investing in Mexico: Investments
in Mexican issuers involve risks that are specific to Mexico, including legal,
regulatory, political, currency, security and economic risks. In the past,
Mexico has experienced high interest rates, economic volatility and high
unemployment rates. Political developments in the U.S. have potential
implications for the trade arrangements between the U.S. and Mexico, which could
negatively affect the value of securities held by the
Fund.
Risk
of Investing in Peru: The Peruvian economy is dependent on commodity prices and the
economies of its trading partners in Central and South America, Europe, Asia and
the United States. Peru has historically experienced high rates of inflation and
may continue to do so in the future.
Risk
of Investing in South Korea: Investments
in South Korean issuers may subject the Fund to legal, regulatory, political,
currency, security, and economic risks that are specific to South Korea. In
addition, economic and political developments of South Korea’s neighbors,
including escalated tensions involving North Korea and any outbreak of
hostilities involving North Korea, or even the threat of an outbreak of
hostilities, may have a severe adverse effect on the South Korean
economy.
International
Closed Market Trading Risk: To
the extent that the underlying investments held by the Fund trade on foreign
exchanges that may be closed when the securities exchange on which the Fund’s
Shares trade is open, there are likely to be deviations between the current
price of such an underlying security and the last quoted price for the
underlying security (i.e., the Fund’s quote from the closed foreign market).
These deviations could result in premiums or discounts to the Fund’s NAV that
may be greater than those experienced by other exchange-traded funds
("ETFs").
Investable
Universe of Companies Risk: The investable universe of companies in which the Fund may invest
may be limited. If a company no longer meets the Index Provider’s criteria for
inclusion in the Underlying Index, the Fund may need to reduce or eliminate its
holdings in that company. The reduction or elimination of the Fund’s holdings in
the company may have an adverse impact on the liquidity of the Fund’s overall
portfolio holdings and on Fund performance.
Issuer
Risk: Fund performance depends on the performance of individual companies
in which the Fund invests. Changes to the financial condition of any of those
companies may cause the value of such company's securities to
decline.
Market
Risk: Turbulence in the financial markets and reduced liquidity may
negatively affect issuers, which could have an adverse effect on the Fund. If
the securities held by the Fund experience poor liquidity, the Fund may be
unable to transact at advantageous times or prices, which may decrease the
Fund’s returns. In addition, there is a risk that policy changes by central
governments and governmental agencies, including the U.S. Federal Reserve or the
European Central Bank, which could include increasing interest rates, could
cause increased volatility in financial markets and lead to higher levels of
Fund redemptions from Authorized Participants, which could have a negative
impact on the Fund. Furthermore, local, regional or global events such as war,
acts of terrorism, the spread of infectious illness or other public health
issues, recessions, raising of interest rates, or other events could have a
significant impact on the Fund and its investments and trading of its Shares.
This increases the risk that monetary policy may provide less support should
economic growth slow. Additionally, China’s shift away from a zero-COVID policy
creates both opportunities and risks, causing uncertainty for global economic
growth. Market risk factors may result in increased volatility and/or decreased
liquidity in the securities markets. The Fund’s NAV could decline over short
periods due to short-term market movements and over longer periods during market
downturns.
Non-Diversification
Risk:
The Fund is classified as a “non-diversified” investment company under the
Investment Company Act of 1940 ("1940 Act"). As a result, the Fund is subject to
the risk that it may be more volatile than a diversified fund because the Fund
may invest its assets in a smaller number of issuers or may invest a larger
proportion of its assets in a single issuer. As a result, the gains and losses
on a single investment may have a greater impact on the Fund’s NAV and may make
the Fund more volatile than more diversified funds.
Operational
Risk: The Fund is exposed to operational risk arising from a number of
factors, including but not limited to human error, processing and communication
errors, errors of the Fund's service providers, counterparties or other
third-parties, failed or inadequate processes and technology or systems
failures. Additionally, cyber security failures or breaches of the electronic
systems of the Fund, the Adviser, and the Fund's other service providers, market
makers, Authorized Participants or the issuers of securities in which the Fund
invests have the ability to cause disruptions and negatively impact the Fund's
business operations, potentially resulting in financial losses to the Fund and
its shareholders. The Fund and the Adviser seek to reduce these operational
risks through controls and procedures. However, these measures do not address
every possible risk and may be inadequate for those risks that they are intended
to address.
Passive
Investment Risk:
The Fund is not actively managed, and the Adviser does not attempt to take
defensive positions in declining markets. Unlike many investment companies, the
Fund does not seek to outperform its Underlying Index. Therefore, it would not
necessarily buy or sell a security unless that security is added or removed,
respectively, from the Underlying Index, even if that security generally is
underperforming. Additionally, if a constituent of the Underlying Index were
removed, even outside of a regular rebalance of the Underlying Index, the
Adviser anticipates that the Fund would sell such security. Maintaining
investments in securities regardless of market conditions or the performance of
individual securities could cause the Fund’s return to be lower than if the Fund
employed an active strategy.
Index-Related
Risk: There is no guarantee that the Fund will achieve a high degree of
correlation to the Underlying Index and therefore achieve its investment
objective. Market disruptions and regulatory restrictions could have an adverse
effect on the Fund’s ability to adjust its exposure to the required levels in
order to track the Underlying Index. Errors in index data, index computations
and/or the construction of the Underlying Index in accordance with its
methodology may occur from time to time and may not be identified and corrected
by the Index Provider for a period of time or at all, which may have an adverse
impact on the Fund and its shareholders.
Management
Risk: The Fund may not fully replicate its Underlying Index and may hold
securities not included in its Underlying Index. The Adviser’s investment
strategy, the implementation of which is subject to a number of constraints, may
cause the Fund to underperform the market or its relevant benchmark or adversely
affect the ability of the Fund to achieve its investment
objective.
Tracking
Error Risk: Tracking error may occur because of
differences between the instruments held in the Fund's portfolio and those
included in the Underlying Index, pricing differences, transaction costs
incurred by the Fund, the Fund's holding of uninvested cash, size of the Fund,
differences in timing of the accrual of or the valuation of dividends or
interest, tax gains or losses, changes to the Underlying Index or the costs to
the Fund of complying with various new or existing regulatory requirements. This
risk may be heightened during times of increased market volatility or other
unusual market conditions. Tracking error also may result because the Fund
incurs fees and expenses, while the Underlying Index does not. ETFs that track
indices with significant weight in emerging markets issuers may experience
higher tracking error than other ETFs that do not track such
indices.
Risks
Associated with Exchange-Traded Funds:
As an ETF, the Fund is subject to the following risks:
Authorized
Participants Concentration Risk: The Fund has a limited number of financial institutions that may
act as Authorized Participants and engage in creation or redemption transactions
directly with the Fund, and none of those Authorized Participants is obligated
to engage in creation and/or redemption transactions. To the extent that those
Authorized Participants exit the business or are unable to process creation
and/or redemption orders, such as in times of market stress, Shares may be more
likely to trade at a premium or discount to NAV and/or at wider intraday bid-ask
spreads, and possibly face trading halts and/or delisting from an exchange.
Authorized Participants Concentration Risk may be heightened because the Fund
invests in non-U.S. securities.
Large
Shareholder Risk: Redemptions
by large shareholders could have a significant negative impact on the Fund. If a
large shareholder were to redeem all, or a large portion, of its Shares, there
is no guarantee that the Fund will be able to maintain sufficient assets to
continue operations in which case the Board of Trustees may determine to
liquidate the Fund. In addition, transactions by large shareholders may account
for a large percentage of the trading volume on a national securities exchange
and may, therefore, have a material upward or downward effect on the market
price of the Shares.
Listing
Standards Risk: The
Fund is required to comply with listing requirements adopted by the listing
exchange. Non-compliance with such requirements may result in the Fund's shares
being delisted by the listing exchange. Any resulting liquidation of the Fund
could cause the Fund to incur elevated transaction costs and could result in
negative tax consequences for its shareholders.
Market
Trading Risks and Premium/Discount Risks:
Shares of the Fund are publicly traded on a national securities exchange, which
may subject shareholders to numerous market trading risks. In stressed market
conditions, the market for the Shares may become less liquid in response to the
deteriorating liquidity of the Fund’s portfolio. This adverse effect on the
liquidity of the Shares, as well as disruptions to creations and redemptions,
the existence of extreme market volatility or potential lack of assets in the
Fund or an active trading market for Shares may result in Shares trading at a
significant premium or discount to NAV. If a shareholder purchases Shares at a
time when the market price is at a premium to the NAV or sells Shares at a time
when the market price is at a discount to the NAV, the shareholder may sustain
losses. The NAV of the Fund is calculated at the end of each business day and
fluctuates with
changes in the market value of the
Fund’s holdings. The trading price of the Fund’s Shares fluctuates, in some
cases materially, throughout trading hours in response to changes in the Fund’s
NAV.
Securities
Lending Risk: Securities lending involves a risk of loss because the borrower may
fail to return the securities in a timely manner or at all. If the Fund is not
able to recover the securities loaned, it may sell the collateral and purchase a
replacement security in the market. Lending securities entails a risk of loss to
the Fund if and to the extent that the market value of the loaned securities
increases and the collateral is not increased accordingly. Additionally, the
Fund will bear any loss on the investment of cash collateral it receives. These
events could also trigger adverse tax consequences for the Fund. As securities
on loan may not be voted by the Fund, there is a risk that the Fund may not be
able to recall the securities in sufficient time to vote on material proxy
matters.
Tax
Status Risk: The
Fund intends to pay dividends each taxable year to enable it to continue to
satisfy the distribution requirements necessary to qualify for treatment as a
regulated investment company ("RIC"). If the Fund were to distribute to its
shareholders less than the minimum amount required for any year, the Fund would
become subject to federal income tax for that year on all of its taxable income
and recognized gains, even those distributed to its shareholders. In addition,
under the Internal Revenue Code of 1986, as amended (the "Code"), the Fund may
not earn more than 10% of its annual gross income from gains resulting from the
sale of commodities and precious metals. This could make it more difficult for
the Fund to pursue its investment strategy and maintain qualification as a RIC.
In lieu of potential disqualification as a RIC, the Fund is permitted to pay a
tax for certain failures to satisfy this income requirement, which, in general,
are limited to those due to reasonable cause and not willful
neglect.
Trading
Halt Risk:
An exchange or market may close or issue trading halts on specific securities,
or the ability to buy or sell certain securities or financial instruments may be
restricted, which may result in the Fund being unable to buy or sell certain
securities or financial instruments. In such circumstances, the Fund may be
unable to rebalance its portfolio, may be unable to accurately price its
investments and/or may incur substantial trading
losses.
Valuation
Risk:
The sales price the Fund could receive for a security may differ from the Fund’s
valuation of the security and may differ from the value used by the Underlying
Index, particularly for securities that trade in low value or volatile markets
or that are valued using a fair value methodology (such as during trading
halts). The value of the securities in the Fund's portfolio may change on
days when shareholders will not be able to purchase or sell the Fund's
Shares.
PERFORMANCE
INFORMATION
The bar chart
and table that follow show how the Fund performed on a calendar year basis and
provide an indication of the risks of investing in the Fund by showing changes
in the Fund's performance from year to year and by showing how the Fund's
average annual returns for the indicated periods compare with the Fund's
benchmark index and a broad measure of market performance.
The Fund's past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.globalxetfs.com.
Annual Total Returns
(Years Ended December 31)
|
|
|
|
|
|
|
| |
Best
Quarter: |
6/30/2016 |
63.00% |
Worst
Quarter: |
6/30/2022 |
-28.71% |
Average Annual
Total Returns (for the Periods Ended December 31,
2023)
|
|
|
|
|
|
|
|
|
|
| |
|
One
Year Ended December 31, 2023 |
Five
Years Ended December 31, 2023 |
Ten
Years Ended December 31, 2023 |
Global
X Silver Miners ETF: |
|
| |
·Return
before taxes |
1.92% |
3.96% |
-0.50% |
·Return
after taxes on distributions1 |
1.78% |
3.55% |
-0.85% |
·Return
after taxes on distributions and sale of Fund Shares1 |
1.24% |
3.00% |
-0.46% |
Solactive
Global Silver Miners Total Return Index (net)
(Index returns reflect
invested dividends net of withholding taxes, but reflect no deduction for
fees, expenses, or other
taxes) |
2.41% |
4.02% |
-0.27% |
MSCI
ACWI Index (net)
(Index returns reflect
invested dividends net of withholding taxes, but reflect no deduction for
fees, expenses, or other
taxes) |
22.20% |
11.72% |
7.93% |
1 After-tax returns are
calculated using the historical highest individual U.S. federal marginal income
tax rates and do not reflect the impact of state and local
taxes. Your actual after-tax returns
will depend on your specific tax situation and may differ from those shown
above. After-tax returns are not relevant to investors who hold Shares of the
Fund through tax-advantaged arrangements, such as 401(k) plans or individual
retirement accounts (IRAs).
FUND
MANAGEMENT
Investment
Adviser:
Global X Management Company LLC.
Portfolio
Managers:
The professionals primarily responsible for the day-to-day management of the
Fund are Nam To, CFA; Wayne Xie; Vanessa Yang; and Sandy Lu, CFA (“Portfolio
Managers”). Mr. To has been a Portfolio Manager of the Fund since March 1, 2018.
Mr. Xie has been a Portfolio Manager of the Fund since March 1, 2019. Ms. Yang
has been a Portfolio Manager of the Fund since December 2020. Mr. Lu has been a
Portfolio Manager of the Fund since March 2022.
PURCHASE
AND SALE OF FUND SHARES
Shares
of the Fund are or will be listed and traded at market prices on a national
securities exchange. Shares may only be purchased and sold on the exchange
through a broker-dealer. The price of Shares is based on market price, and
because ETF shares trade at market prices rather than at NAV, Shares may trade
at a price greater than NAV (a premium) or less than NAV (a discount). Only
“Authorized Participants” (as defined in the SAI) who have entered into
agreements with the Fund’s distributor, SEI Investments Distribution Co.
(“Distributor”), may engage in creation or redemption transactions directly with
the Fund. The Fund will only issue or redeem Shares that have been aggregated
into blocks called Creation Units. The Fund will issue or redeem Creation Units
in return for a basket of cash and/or securities that the Fund specifies any day
that the national securities exchanges are open for business (“Business Day”).
An investor may incur costs attributable to the difference between the highest
price a buyer is willing to pay to purchase shares of the Fund (bid) and the
lowest price a seller is willing to accept for shares of the Fund (ask) when
buying or selling shares in the secondary market (the “bid-ask spread”). To
access information regarding the Fund’s net asset value, market price, premiums
and discounts, and bid-ask spreads, please go to https://www.globalxetfs.com.
TAX
INFORMATION
The
Fund intends to make distributions that may be taxable to you as ordinary income
or capital gains, unless you are investing through a tax-advantaged arrangement,
such as a 401(k) plan or an individual retirement account ("IRA"), in which case
distributions from such tax-advantaged arrangement may be taxable to you.
PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
The
Adviser and its related companies may pay broker-dealers or other financial
intermediaries (such as a bank) for the sale of Fund Shares and related
services. These payments may create a conflict of interest by influencing your
broker-dealer, sales persons or other intermediary or its employees or
associated persons to recommend the Fund over another investment. Ask your
financial adviser or visit your financial intermediary’s website for more
information.
Global X Gold Explorers
ETF
Ticker:
GOEX Exchange: NYSE Arca
INVESTMENT
OBJECTIVE
The Global X Gold Explorers ETF ("Fund") seeks to provide
investment results that correspond generally to the price and yield performance,
before fees and expenses, of the Solactive Global Gold Explorers &
Developers Total Return Index ("Underlying Index").
FEES AND
EXPENSES
This table describes the fees and expenses that you may pay if you
buy, hold, and sell shares (“Shares”) of the Fund. You may pay other fees, such
as brokerage commissions and other fees to financial intermediaries, which are
not reflected in the table and examples below.
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment):
|
|
|
|
| |
Management
Fees: |
0.65% |
Distribution
and Service (12b-1) Fees: |
None |
Other
Expenses: |
0.00% |
Total
Annual Fund Operating Expenses: |
0.65% |
Example:
The following example
is intended to help you compare the cost of investing in the Fund with the cost
of investing in other funds. This example does not take into account customary
brokerage commissions that you pay when purchasing or selling Shares of the Fund
in the secondary market. The example assumes
that you invest $10,000 in the Fund for the time periods indicated and then sell
all of your Shares at the end of those periods. The example also assumes that
your investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:
|
|
|
|
|
|
|
|
|
|
| |
One
Year |
Three
Years |
Five
Years |
Ten
Years |
$66 |
$208 |
$362 |
$810 |
Portfolio
Turnover:
The Fund pays transaction costs, such as commissions, when it buys
and sells securities (or "turns over" its portfolio). A higher portfolio
turnover rate may indicate higher transaction costs and may result in higher
taxes when Shares are held in a taxable account. These costs, which are not
reflected in annual fund operating expenses or in the example, affect the Fund's
performance. During the most recent fiscal year, the Fund's portfolio turnover
rate was 19.87% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund invests at least 80% of its total assets in the securities of the Solactive
Global Gold Explorers & Developers Total Return Index ("Underlying Index")
and in American Depositary Receipts ("ADRs") and Global Depositary Receipts
("GDRs") based on the securities in the Underlying Index. The Fund also invests
at least 80% of its total assets in securities of companies that are
economically tied to the gold exploration industry. Companies economically tied
to the gold exploration industry include those engaged in the exploration of
gold mining projects. The Fund's 80% investment policies are non-fundamental and
require 60 days prior written notice to shareholders before they can be changed.
The Fund may lend securities representing up to one-third of the value of the
Fund’s total assets (including the value of the collateral received).
The
Underlying Index is a free float-adjusted, liquidity-tested and market
capitalization-weighted index that is designed to measure broad-based equity
market performance of global companies involved in gold exploration, as defined
by Solactive AG, the provider of the Underlying Index ("Index Provider"). As of
December 31, 2023, the Underlying Index had 50 constituents, 45 of which
are foreign companies. The Fund's investment objective and Underlying Index may
be changed without shareholder approval.
The
Underlying Index is sponsored by 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.
The
Adviser uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try to
outperform the Underlying Index and does not seek temporary defensive positions
when markets decline or appear overvalued.
The
Fund generally will use a replication strategy. A replication strategy is an
indexing strategy that involves investing in the securities of the Underlying
Index in approximately the same proportions as in the Underlying Index. However,
the Fund may utilize a representative sampling strategy with respect to the
Underlying Index when a replication strategy might be detrimental or
disadvantageous to shareholders, such as when there are practical difficulties
or substantial costs involved in compiling a portfolio of equity securities to
replicate the Underlying Index, in instances in which a security in the
Underlying Index becomes temporarily illiquid, unavailable or less liquid, or as
a result of legal restrictions or limitations (such as tax diversification
requirements) that apply to the Fund but not the Underlying Index.
The
Adviser expects that, over time, the correlation between the Fund's performance
and that of the Underlying Index, before fees and expenses, will exceed 95%. A
correlation percentage of 100% would indicate perfect correlation. If the Fund
uses a replication strategy, it can be expected to have greater correlation to
the Underlying Index than if it uses a representative sampling
strategy.
The Fund
concentrates its investments (i.e., holds 25% or more of its total assets) in a
particular industry or group of industries to approximately the same extent that
the Underlying Index is concentrated. As of December 31, 2023, the
Underlying Index was concentrated in the metals and mining industry and had
significant exposure to the materials
sector.
SUMMARY OF PRINCIPAL
RISKS
As with any
investment, you could lose all or part of your investment in the Fund, and the
Fund’s performance could trail that of other investments. There
is no guarantee that the Fund will achieve its investment objective.
An investment in the Fund is not a bank deposit and it is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency, the Adviser or any of its affiliates. The
Fund is subject to the principal risks noted below, any of which may adversely
affect the Fund’s net asset value (“NAV”), trading price, yield, total return
and ability to meet its investment objective, as well as other risks that are
described in greater detail in the Additional
Information About the Funds
section of this Prospectus and in the Statement of Additional Information
(“SAI”). The order of the below risk factors does not indicate the significance
of any particular risk factor.
Asset
Class Risk:
Securities and other assets in the Underlying Index or otherwise held in the
Fund's portfolio may underperform in comparison to the general securities
markets, a particular securities market or other asset classes.
Equity
Securities Risk: Equity securities are subject to
changes in value, and their values may be more volatile than other asset
classes, as a result of such factors as a company’s business performance,
investor perceptions, stock market trends and general economic
conditions.
Capitalization
Risk:
Investing in issuers within the same market capitalization category carries the
risk that the category may be out of favor due to current market conditions or
investor sentiment.
Mid-Capitalization
Companies Risk: Mid-capitalization
companies may have greater price volatility, lower trading volume and less
liquidity than large-capitalization companies. In addition, mid-capitalization
companies may have smaller revenues, narrower product lines, less management
depth and experience, smaller shares of their product or service markets, fewer
financial resources and less competitive strength than large-capitalization
companies.
Small-Capitalization
Companies Risk: Compared to mid- and
large-capitalization companies, small-capitalization companies may be less
stable and more susceptible to adverse developments, and their securities may be
more volatile and less liquid.
Commodity
Exposure Risk: The
Fund invests in companies that are economically tied to the gold exploration
industry, which may be susceptible to fluctuations in the underlying commodities
market. Commodity prices may be influenced or characterized by unpredictable
factors, including, where applicable, high volatility, changes in supply and
demand relationships, weather,
agriculture,
trade, changes in interest rates and monetary and other governmental policies,
action and inaction. Securities of companies held by the Fund that are dependent
on a single commodity, or are concentrated on a single commodity sector, may
typically exhibit even higher volatility attributable to commodity
prices.
Commodity
Price Relationship Risk:
The Underlying Index measures the performance of companies primarily involved in
gold exploration and not the performance of the price of gold itself. The
securities of companies involved in gold exploration may not be correlated with
the performance of the price of gold and may under- or over-perform the
performance of the price of gold over the short-term or the
long-term.
Currency
Risk: The Fund may invest in securities denominated in foreign
currencies. Because the Fund's NAV is determined in U.S. dollars, the Fund's NAV
could decline if currencies of the underlying securities depreciate against the
U.S. dollar or if there are delays or limits on repatriation of such currencies.
Currency exchange rates can be very volatile and can change quickly and
unpredictably. As a result, the Fund's NAV may change quickly and without
warning, which could have a significant negative impact on the
Fund.
Custody
Risk: The Fund may hold foreign securities and cash with foreign banks,
agents, and securities depositories appointed by the Fund's custodian.
Investments in emerging markets may be subject to even greater custody risks
than investments in more developed markets. Less developed markets are more
likely to experience problems with the clearing and settling of trades and the
holding of securities by local banks, agents and depositories.
Focus
Risk:
To the extent that the Underlying Index focuses in investments related to a
particular industry or group of industries, the Fund will also focus its
investments to approximately the same extent. Similarly, if the Underlying Index
has significant exposure to one or more sectors, the Fund’s investments will
likely have significant exposure to such sectors. In such event, the Fund’s
performance will be particularly susceptible to adverse events impacting such
industry or sector, which may include, but are not limited to, the following:
general economic conditions or cyclical market patterns that could negatively
affect supply and demand; competition for resources; adverse labor relations;
political or world events; obsolescence of technologies; and increased
competition or new product introductions that may affect the profitability or
viability of companies in a particular industry or sector. As a result, the
value of the Fund’s investments may rise and fall more than the value of shares
of a fund that invests in securities of companies in a broader range of
industries or sectors.
Risks
Related to Investing in the Exploration Industry:
The exploration and development of mineral deposits involve significant
financial risks over a significant period of time, which even a combination of
careful evaluation, experience and knowledge may not eliminate. Few properties
which are explored are ultimately developed into producing mines. Major
expenditures may be required to establish reserves by drilling and to construct
mining and processing facilities at a site. In addition, mineral exploration
companies typically operate at a loss and are dependent on securing equity
and/or debt financing, which might be more difficult to secure for an
exploration company than for a more established
counterpart.
Risks
Related to Investing in the Materials Sector:
Companies in the materials sector are affected by commodity price volatility,
exchange rates, import controls and worldwide competition. At times, worldwide
production of industrial materials has exceeded demand, leading to poor
investment returns or outright losses. Issuers in the materials sector are at
risk of depletion of resources, technological progress, labor relations,
governmental regulations and environmental damage and product liability
claims.
Risks
Related to Investing in the Metals and Mining Industry:
Securities in the Fund's portfolio may be significantly subject to the effects
of competitive pressures in the gold mining industry and the price of gold
bullion. The price of gold may be affected by changes in inflation rates,
interest rates, monetary policy, economic conditions, and political stability.
Commodity prices may fluctuate substantially over short periods of time;
therefore, the Fund’s Share price may be more volatile than other types of
investments. In addition, metals and mining companies may also be significantly
affected by import controls, worldwide competition, liability for environmental
damage, depletion of resources, and mandated expenditures for safety and
pollution control devices. Metals and mining companies may have significant
operations in areas at risk for social and political unrest, security concerns
and environmental damage. These companies may also be at risk for increased
government regulation and intervention. Such risks may adversely affect the
issuers to which the Fund has
exposure.
Foreign
Securities Risk:
The Fund may invest, within U.S. regulations, in foreign securities. The Fund's
investments in foreign securities can be riskier than U.S. securities
investments. Investments in the securities of foreign issuers (including
investments in American Depositary Receipts (“ADRs”) and Global Depositary
Receipts (“GDRs”)) are subject to the risks associated with investing in those
foreign markets, such as heightened risks of inflation or nationalization. The
prices of foreign securities and
the prices of U.S. securities have, at times, moved in opposite
directions. In addition, securities of foreign issuers may lose value due to
political, economic and geographic events affecting a foreign issuer or market.
During periods of social, political or economic instability in a country or
region, the value of a foreign security traded on U.S. exchanges could be
affected by, among other factors, increasing price volatility, illiquidity, or
the closure of the primary market on which the security (or the security
underlying the ADR or GDR) is traded. The Fund may lose money due to political,
economic and geographic events affecting a foreign issuer or market. Where all
or a portion of the Fund's underlying securities trade in a market that is
closed when the market in which the Fund's Shares are listed and trading is
open, there may be differences between the last quote from the security’s closed
foreign market and the value of the security during the Fund’s domestic trading
day. This, in turn, could lead to differences between the market price of the
Fund’s Shares and the underlying value of those shares.
Geographic
Risk: A
natural, biological or other disaster could occur in a geographic region in
which the Fund invests, which could affect the economy or particular business
operations of companies in the specific geographic region, causing an adverse
impact on the Fund’s investments in the affected region or in a region
economically tied to the affected region. The securities in which the Fund
invests and, consequently, the Fund are also subject to specific risks as a
result of their business operations, including, but not limited to:
Risk
of Investing in Australia: Investments
in Australian issuers may subject the Fund to regulatory, political, currency,
security, and economic risk specific to Australia. The Australian economy is
heavily dependent on exports from the energy, agricultural and mining sectors.
This makes the Australian economy susceptible to fluctuations in the commodity
markets. Australia is also dependent on trading with key trading
partners.
Risk
of Investing in Canada: The Canadian economy is highly dependent on the demand for and
price of natural resources. As a result, the Canadian market is relatively
concentrated in issuers involved in the production and distribution of natural
resources and any changes in these sectors could have an adverse impact on the
Canadian economy. The Canadian economy is heavily dependent on relationships
with certain key trading partners, including the United States and China.
Developments in the United States, including renegotiation of the North American
Free Trade Agreement (“NAFTA”) and ratification of the successor United
States-Mexico-Canada Agreement (“USMCA”), which went into effect on July 1,
2020, as well as the imposition of additional tariffs by the United States, may
have implications for the trade arrangements between the United States and
Canada, which could negatively affect the value of securities held by the
Fund.
Risk
of Investing in Developed Markets:
The Fund’s investment in a developed country issuer may subject the Fund to
regulatory, political, currency, security, economic and other risks associated
with developed countries. Developed countries tend to represent a significant
portion of the global economy and have generally experienced slower economic
growth than some less developed countries. Certain developed countries have
experienced security concerns, such as terrorism and strained international
relations. Incidents involving a country’s or region’s security may cause
uncertainty in its markets and may adversely affect its economy and the Fund’s
investments. In addition, developed countries may be impacted by changes to the
economic conditions of certain key trading partners, regulatory burdens, debt
burdens and the price or availability of certain
commodities.
Risk
of Investing in Egypt: Investment
in securities of Egyptian issuers involves, among other risks, risks of the
imposition of capital controls, expropriation and/or nationalization of assets,
confiscatory taxation, regional conflict, political instability, including
authoritarian and/or military involvement in governmental decision making, armed
conflict, the impact on the economy as a result of civil unrest and social
instability as a result of religious, ethnic and/or socioeconomic
unrest.
Risk
of Investing in Emerging Markets:
The Fund targets gold exploration companies globally and is expected to invest
in securities in emerging market countries. Investments in emerging markets may
be subject to a greater risk of loss than investments in developed markets.
Securities markets of emerging market countries are less liquid, subject to
greater price volatility, have smaller market capitalizations, have less
government regulation, and are not subject to as extensive and frequent
accounting, financial, and other reporting requirements as the securities
markets of more developed countries, and there may be greater risk associated
with the custody of securities in emerging markets. It may be difficult or
impossible for the Fund to pursue claims against an emerging market issuer in
the courts of an emerging market country.
There
may be significant obstacles to obtaining information necessary for
investigations into or litigation against emerging market companies and
shareholders may have limited legal rights and remedies. Emerging markets may be
more likely to experience inflation, political turmoil and rapid changes in
economic conditions than more developed markets. Emerging market economies’
exposure to specific industries, such as tourism, and lack of efficient or
sufficient health care systems, could make these economies especially vulnerable
to
global crises, including but not limited to, pandemics such as the
global COVID-19 pandemic. Certain emerging market countries may have privatized,
or have begun the process of privatizing, certain entities and industries.
Privatized entities may lose money or be re-nationalized.
Risk
of Investing in Indonesia: Investments
in Indonesian issuers may subject the Fund to legal, regulatory, political,
security and economic risk specific to Indonesia. Among other things, the
Indonesian economy is heavily dependent on trading relationships with certain
key trading partners, including China, Japan, Singapore and the United States.
In the past, Indonesia has experienced acts of terrorism, predominantly targeted
at foreigners. Such acts of terrorism have had a negative impact on tourism, an
important sector of the Indonesian economy.
Risk
of Investing in Turkey: The Turkish economy is heavily
dependent on relationships with certain key trading partners, including European
Union countries, China and Russia. The Turkish economy has certain significant
economic weaknesses, such as its relatively high current account deficit and
currency volatility. Turkey has historically experienced acts of terrorism and
strained relations related to border disputes with certain neighboring
countries. The continuation of the conflict on the Turkish-Syrian border, for
example, could have an adverse impact on the Turkish economy. Turkey may be
subject to considerable degrees of social and political instability.
Unanticipated or sudden political or social developments may cause uncertainty
in the Turkish stock market and as a result adversely affect issuers to which
the Fund has exposure. In February 2023, a severe earthquake struck central and
southern Turkey, causing tens of thousands of fatalities, the collapse of
buildings and infrastructure, disruption of supply chains, and other forms of
immense economic damage.
International
Closed Market Trading Risk: To
the extent that the underlying investments held by the Fund trade on foreign
exchanges that may be closed when the securities exchange on which the Fund’s
Shares trade is open, there are likely to be deviations between the current
price of such an underlying security and the last quoted price for the
underlying security (i.e., the Fund’s quote from the closed foreign market).
These deviations could result in premiums or discounts to the Fund’s NAV that
may be greater than those experienced by other exchange-traded funds
("ETFs").
Investable
Universe of Companies Risk: The investable universe of companies in which the Fund may invest
may be limited. If a company no longer meets the Index Provider’s criteria for
inclusion in the Underlying Index, the Fund may need to reduce or eliminate its
holdings in that company. The reduction or elimination of the Fund’s holdings in
the company may have an adverse impact on the liquidity of the Fund’s overall
portfolio holdings and on Fund performance.
Issuer
Risk: Fund performance depends on the performance of individual companies
in which the Fund invests. Changes to the financial condition of any of those
companies may cause the value of such company's securities to
decline.
Market
Risk: Turbulence in the financial markets and reduced liquidity may
negatively affect issuers, which could have an adverse effect on the Fund. If
the securities held by the Fund experience poor liquidity, the Fund may be
unable to transact at advantageous times or prices, which may decrease the
Fund’s returns. In addition, there is a risk that policy changes by central
governments and governmental agencies, including the U.S. Federal Reserve or the
European Central Bank, which could include increasing interest rates, could
cause increased volatility in financial markets and lead to higher levels of
Fund redemptions from Authorized Participants, which could have a negative
impact on the Fund. Furthermore, local, regional or global events such as war,
acts of terrorism, the spread of infectious illness or other public health
issues, recessions, raising of interest rates, or other events could have a
significant impact on the Fund and its investments and trading of its Shares.
This increases the risk that monetary policy may provide less support should
economic growth slow. Additionally, China’s shift away from a zero-COVID policy
creates both opportunities and risks, causing uncertainty for global economic
growth. Market risk factors may result in increased volatility and/or decreased
liquidity in the securities markets. The Fund’s NAV could decline over short
periods due to short-term market movements and over longer periods during market
downturns.
Operational
Risk: The Fund is exposed to operational risk arising from a number of
factors, including but not limited to human error, processing and communication
errors, errors of the Fund's service providers, counterparties or other
third-parties, failed or inadequate processes and technology or systems
failures. Additionally, cyber security failures or breaches of the electronic
systems of the Fund, the Adviser, and the Fund's other service providers, market
makers, Authorized Participants or the issuers of securities in which the Fund
invests have the ability to cause disruptions and negatively impact the Fund's
business operations, potentially resulting in financial losses to the Fund and
its shareholders. The Fund and the Adviser seek to reduce these operational
risks through controls and procedures. However, these measures do not address
every possible risk and may be inadequate for those risks that they are intended
to address.
Passive
Investment Risk:
The Fund is not actively managed, and the Adviser does not attempt to take
defensive positions in declining markets. Unlike many investment companies, the
Fund does not seek to outperform its Underlying Index. Therefore,
it
would not necessarily buy or sell a security unless that security is added or
removed, respectively, from the Underlying Index, even if that security
generally is underperforming. Additionally, if a constituent of the Underlying
Index were removed, even outside of a regular rebalance of the Underlying Index,
the Adviser anticipates that the Fund would sell such security. Maintaining
investments in securities regardless of market conditions or the performance of
individual securities could cause the Fund’s return to be lower than if the Fund
employed an active strategy.
Index-Related
Risk: There is no guarantee that the Fund will achieve a high degree of
correlation to the Underlying Index and therefore achieve its investment
objective. Market disruptions and regulatory restrictions could have an adverse
effect on the Fund’s ability to adjust its exposure to the required levels in
order to track the Underlying Index. Errors in index data, index computations
and/or the construction of the Underlying Index in accordance with its
methodology may occur from time to time and may not be identified and corrected
by the Index Provider for a period of time or at all, which may have an adverse
impact on the Fund and its shareholders.
Management
Risk: The Fund may not fully replicate its Underlying Index and may hold
securities not included in its Underlying Index. The Adviser’s investment
strategy, the implementation of which is subject to a number of constraints, may
cause the Fund to underperform the market or its relevant benchmark or adversely
affect the ability of the Fund to achieve its investment
objective.
Tracking
Error Risk: Tracking error may occur because of
differences between the instruments held in the Fund's portfolio and those
included in the Underlying Index, pricing differences, transaction costs
incurred by the Fund, the Fund's holding of uninvested cash, size of the Fund,
differences in timing of the accrual of or the valuation of dividends or
interest, tax gains or losses, changes to the Underlying Index or the costs to
the Fund of complying with various new or existing regulatory requirements. This
risk may be heightened during times of increased market volatility or other
unusual market conditions. Tracking error also may result because the Fund
incurs fees and expenses, while the Underlying Index does not. ETFs that track
indices with significant weight in emerging markets issuers may experience
higher tracking error than other ETFs that do not track such
indices.
Risks
Associated with Exchange-Traded Funds:
As an ETF, the Fund is subject to the following risks:
Authorized
Participants Concentration Risk: The Fund has a limited number of financial institutions that may
act as Authorized Participants and engage in creation or redemption transactions
directly with the Fund, and none of those Authorized Participants is obligated
to engage in creation and/or redemption transactions. To the extent that those
Authorized Participants exit the business or are unable to process creation
and/or redemption orders, such as in times of market stress, Shares may be more
likely to trade at a premium or discount to NAV and/or at wider intraday bid-ask
spreads, and possibly face trading halts and/or delisting from an exchange.
Authorized Participants Concentration Risk may be heightened because the Fund
invests in non-U.S. securities.
Large
Shareholder Risk: Redemptions
by large shareholders could have a significant negative impact on the Fund. If a
large shareholder were to redeem all, or a large portion, of its Shares, there
is no guarantee that the Fund will be able to maintain sufficient assets to
continue operations in which case the Board of Trustees may determine to
liquidate the Fund. In addition, transactions by large shareholders may account
for a large percentage of the trading volume on a national securities exchange
and may, therefore, have a material upward or downward effect on the market
price of the Shares.
Listing
Standards Risk: The
Fund is required to comply with listing requirements adopted by the listing
exchange. Non-compliance with such requirements may result in the Fund's shares
being delisted by the listing exchange. Any resulting liquidation of the Fund
could cause the Fund to incur elevated transaction costs and could result in
negative tax consequences for its shareholders.
Market
Trading Risks and Premium/Discount
Risks: Shares of the Fund are publicly traded
on a national securities exchange, which may subject shareholders to numerous
market trading risks. In stressed market conditions, the market for the Shares
may become less liquid in response to the deteriorating liquidity of the Fund’s
portfolio. This adverse effect on the liquidity of the Shares, as well as
disruptions to creations and redemptions, the existence of extreme market
volatility or potential lack of assets in the Fund or an active trading market
for Shares may result in Shares trading at a significant premium or discount to
NAV. If a shareholder purchases Shares at a time when the market price is at a
premium to the NAV or sells Shares at a time when the market price is at a
discount to the NAV, the shareholder may sustain losses. The NAV of the Fund is
calculated at the end of each business day and fluctuates with changes in the
market value of the Fund’s holdings. The trading price of the Fund’s Shares
fluctuates, in some cases materially, throughout trading hours in response to
changes in the Fund’s NAV.
Securities
Lending Risk: Securities lending involves a risk of loss because the borrower may
fail to return the securities in a timely manner or at all. If the Fund is not
able to recover the securities loaned, it may sell the collateral and purchase a
replacement security in the market. Lending securities entails a risk of loss to
the Fund if and to the extent that the market value of the loaned securities
increases and the collateral is not increased accordingly. Additionally, the
Fund will bear any loss on the investment of cash collateral it receives. These
events could also trigger adverse tax consequences for the Fund. As securities
on loan may not be voted by the Fund, there is a risk that the Fund may not be
able to recall the securities in sufficient time to vote on material proxy
matters.
Tax
Status Risk: The
Fund intends to pay dividends each taxable year to enable it to continue to
satisfy the distribution requirements necessary to qualify for treatment as a
regulated investment company ("RIC"). If the Fund were to distribute to its
shareholders less than the minimum amount required for any year, the Fund would
become subject to federal income tax for that year on all of its taxable income
and recognized gains, even those distributed to its shareholders. In addition,
under the Internal Revenue Code of 1986, as amended (the "Code"), the Fund may
not earn more than 10% of its annual gross income from gains resulting from the
sale of commodities and precious metals. This could make it more difficult for
the Fund to pursue its investment strategy and maintain qualification as a RIC.
In lieu of potential disqualification as a RIC, the Fund is permitted to pay a
tax for certain failures to satisfy this income requirement, which, in general,
are limited to those due to reasonable cause and not willful
neglect.
Trading
Halt Risk:
An exchange or market may close or issue trading halts on specific securities,
or the ability to buy or sell certain securities or financial instruments may be
restricted, which may result in the Fund being unable to buy or sell certain
securities or financial instruments. In such circumstances, the Fund may be
unable to rebalance its portfolio, may be unable to accurately price its
investments and/or may incur substantial trading
losses.
Valuation
Risk: The sales price the Fund could receive for a security may differ
from the Fund’s valuation of the security and may differ from the value used by
the Underlying Index, particularly for securities that trade in low value or
volatile markets or that are valued using a fair value methodology (such as
during trading halts). The value of the securities in the Fund's portfolio
may change on days when shareholders will not be able to purchase or sell the
Fund's Shares.
PERFORMANCE
INFORMATION
The bar chart
and table that follow show how the Fund performed on a calendar year basis and
provide an indication of the risks of investing in the Fund by showing changes
in the Fund's performance from year to year and by showing how the Fund's
average annual returns for the indicated periods compared with the Fund's
benchmark index and a broad measure of market performance.
The Fund's past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.globalxetfs.com.
Annual Total Returns
(Years Ended December 31)
|
|
|
|
|
|
|
| |
Best
Quarter: |
6/30/2016 |
71.10% |
Worst
Quarter: |
6/30/2022 |
-31.35% |
Average Annual
Total Returns (for the Periods Ended December 31,
2023)
|
|
|
|
|
|
|
|
|
|
| |
|
One
Year Ended December 31, 2023 |
Five
Years Ended December 31, 2023 |
Ten
Years Ended December 31. 2023 |
Global
X Gold Explorers ETF: |
|
| |
·Return
before taxes |
2.67% |
6.62% |
6.80% |
·Return
after taxes on distributions1 |
2.67% |
6.05% |
4.61% |
·Return
after taxes on distributions and sale of Fund Shares1 |
1.58% |
5.03% |
4.27% |
Hybrid
Solactive Global Gold Explorers & Developers Total Return Index
(net)2
(Index returns reflect
invested dividends net of withholding taxes, but reflect no deduction for
fees, expenses, or other
taxes) |
3.25% |
7.17% |
7.43% |
MSCI
ACWI Index (net)
(Index returns reflect
invested dividends net of withholding taxes, but reflect no deduction for
fees, expenses, or other
taxes) |
22.20% |
11.72% |
7.93% |
1
After-tax returns are
calculated using the historical highest individual U.S. federal marginal income
tax rates and do not reflect the impact of state and local
taxes. Your actual after-tax returns
will depend on your specific tax situation and may differ from those shown
above. After-tax returns are not relevant to investors who hold Shares of the
Fund through tax-advantaged arrangements, such as 401(k) plans or individual
retirement accounts (IRAs).
2 Hybrid index
performance reflects the performance of the Solactive Global Gold Explorers
Total Return Index through November 30, 2016, the Solactive Global Gold
Explorers & Developers Total Return Transition Index through April 30, 2017
and the Solactive Global Gold Explorers & Developers Total Return Index
thereafter.
FUND
MANAGEMENT
Investment
Adviser:
Global X Management Company LLC.
Portfolio
Managers:
The professionals primarily responsible for the day-to-day management of the
Fund are Nam To, CFA; Wayne Xie; Vanessa Yang; and Sandy Lu, CFA (“Portfolio
Managers”). Mr. To has been a Portfolio Manager of the Fund since March 1, 2018.
Mr. Xie has been a Portfolio Manager of the Fund since March 1, 2019. Ms. Yang
has been a Portfolio Manager of the Fund since December 2020. Mr. Lu has been a
Portfolio Manager of the Fund since March 2022.
PURCHASE
AND SALE OF FUND SHARES
Shares
of the Fund are or will be listed and traded at market prices on a national
securities exchange. Shares may only be purchased and sold on the exchange
through a broker-dealer. The price of Shares is based on market price, and
because ETF shares trade at market prices rather than at NAV, Shares may trade
at a price greater than NAV (a premium) or less than NAV (a discount). Only
“Authorized Participants” (as defined in the SAI) who have entered into
agreements with the Fund’s distributor, SEI Investments Distribution Co.
(“Distributor”), may engage in creation or redemption transactions directly with
the Fund. The Fund will only issue or redeem Shares that have been aggregated
into blocks called Creation Units. The Fund will issue or redeem Creation Units
in return for a basket of cash and/or securities that the Fund specifies any day
that the national securities exchanges are open for business (“Business Day”).
An investor may incur costs attributable to the difference between the highest
price a buyer is willing to pay to purchase shares of the Fund (bid) and the
lowest price a seller is willing to accept for shares of the Fund (ask) when
buying or selling shares in the secondary market (the “bid-ask spread”). To
access information regarding the Fund’s net asset value, market price, premiums
and discounts, and bid-ask spreads, please go to https://www.globalxetfs.com.
TAX
INFORMATION
The
Fund intends to make distributions that may be taxable to you as ordinary income
or capital gains, unless you are investing through a tax-advantaged arrangement,
such as a 401(k) plan or an individual retirement account ("IRA"), in which case
distributions from such tax-advantaged arrangement may be taxable to you.
PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
The
Adviser and its related companies may pay broker-dealers or other financial
intermediaries (such as a bank) for the sale of Fund Shares and related
services. These payments may create a conflict of interest by influencing your
broker-dealer, sales persons or other intermediary or its employees or
associated persons to recommend the Fund over another investment. Ask your
financial adviser or visit your financial intermediary’s website for more
information.
Global X Uranium
ETF
Ticker:
URA Exchange: NYSE Arca
INVESTMENT
OBJECTIVE
The
Global X Uranium ETF ("Fund") seeks to provide investment results that
correspond generally to the price and yield performance, before fees and
expenses, of the Solactive Global Uranium & Nuclear Components Total Return
Index ("Underlying Index").
FEES AND
EXPENSES
This table describes the fees and expenses that you may pay if you
buy, hold, and sell shares (“Shares”) of the Fund. You may pay other fees, such
as brokerage commissions and other fees to financial intermediaries, which are
not reflected in the table and examples below.
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment):
|
|
|
|
| |
Management
Fees: |
0.69% |
Distribution
and Service (12b-1) Fees: |
None |
Other
Expenses: |
0.00% |
Total
Annual Fund Operating Expenses: |
0.69% |
Example:
The following example
is intended to help you compare the cost of investing in the Fund with the cost
of investing in other funds. This example does not take into account customary
brokerage commissions that you pay when purchasing or selling Shares of the Fund
in the secondary market. The example assumes
that you invest $10,000 in the Fund for the time periods indicated and then sell
all of your Shares at the end of those periods. The example also assumes that
your investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:
|
|
|
|
|
|
|
|
|
|
| |
One
Year |
Three
Years |
Five
Years |
Ten
Years |
$70 |
$221 |
$384 |
$859 |
Portfolio
Turnover:
The Fund pays transaction costs, such as commissions, when it buys
and sells securities (or "turns over" its portfolio). A higher portfolio
turnover rate may indicate higher transaction costs and may result in higher
taxes when Shares are held in a taxable account. These costs, which are not
reflected in annual fund operating expenses or in the example, affect the Fund's
performance. During the most recent fiscal year, the Fund's portfolio turnover
rate was 20.03% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund invests at least 80% of its total assets in the securities of the Solactive
Global Uranium & Nuclear Components Total Return Index ("Underlying Index")
and in American Depositary Receipts ("ADRs") and Global Depositary Receipts
("GDRs") based on the securities in the Underlying Index. The Fund also invests
at least 80% of its total assets in securities of companies that are active in
some aspect of the uranium industry such as mining, refining, exploration,
manufacturing of equipment for the uranium industry, technologies related to the
uranium industry or the production of nuclear components, as well as investment
trusts whose primary purpose is to provide exposure to physical uranium, and
companies which primary business is the production/development of nuclear
reactors and associated technology. The Fund may also invest in companies that
do not derive a significant percentage of revenues from activities related to
the uranium industry, but generate large absolute revenues from the uranium
industry (in particular, uranium mining, exploration for uranium, physical
uranium investments, technologies related to the uranium industry, or the
production of nuclear components). The Fund's 80% investment policies are
non-fundamental and require 60 days prior written notice to shareholders before
they can be changed. The Fund may lend securities representing up to one-third
of the value of the Fund’s total assets (including the value of the collateral
received).
The
Underlying Index is designed to measure broad based equity market performance of
global companies involved in the uranium industry, as determined by Solactive
AG, the provider of the Underlying Index ("Index Provider"), including
companies
that are engaged in uranium mining, exploration for uranium, technologies
related to the uranium industry and the production of nuclear components. 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. In addition, the Index Provider, in partnership with ESG data
provider Minerva Analytics Ltd., will screen the companies for exposure to
"Controversial Weapons" on a quarterly basis. A company will be considered as
exposed to Controversial Weapons and excluded from the Underlying Index if: (i)
it is involved in the production development or maintenance of anti-personnel
mines, biological or chemical weapons, cluster munitions, depleted uranium,
nuclear weapons, or any other weapon that violate humanitarian principles
through normal use; (ii) it produces or develops key and dedicated components
for controversial weapons; (iii) it holds more than a 20% stake in a company
that is involved in controversial weapons; or it is more than 50% owned by a
company that is involved in controversial weapons. As of December 31, 2023,
the Underlying Index had 46 constituents, 42 of which are foreign companies. The
Fund's investment objective and Underlying Index may be changed without
shareholder approval.
The
Underlying Index is sponsored by 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.
The
Adviser uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try to
outperform the Underlying Index and does not seek temporary defensive positions
when markets decline or appear overvalued.
The
Fund generally will use a replication strategy. A replication strategy is an
indexing strategy that involves investing in the securities of the Underlying
Index in approximately the same proportions as in the Underlying Index. However,
the Fund may utilize a representative sampling strategy with respect to the
Underlying Index when a replication strategy might be detrimental or
disadvantageous to shareholders, such as when there are practical difficulties
or substantial costs involved in compiling a portfolio of equity securities to
replicate the Underlying Index, in instances in which a security in the
Underlying Index becomes temporarily illiquid, unavailable or less liquid, or as
a result of legal restrictions or limitations (such as tax diversification
requirements) that apply to the Fund but not the Underlying Index.
The
Adviser expects that, over time, the correlation between the Fund's performance
and that of the Underlying Index, before fees and expenses, will exceed 95%. A
correlation percentage of 100% would indicate perfect correlation. If the Fund
uses a replication strategy, it can be expected to have greater correlation to
the Underlying Index than if it uses a representative sampling
strategy.
The Fund
concentrates its investments (i.e., holds 25% or more of its total assets) in a
particular industry or group of industries to approximately the same extent that
the Underlying Index is concentrated. As of December 31, 2023, the
Underlying Index was concentrated in the oil, gas and consumable fuels industry
and had significant exposure to the energy
sector.
SUMMARY OF PRINCIPAL
RISKS
As with any
investment, you could lose all or part of your investment in the Fund, and the
Fund’s performance could trail that of other investments. There
is no guarantee that the Fund will achieve its investment objective.
An investment in the Fund is not a bank deposit and it is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency, the Adviser or any of its affiliates. The
Fund is subject to the principal risks noted below, any of which may adversely
affect the Fund’s net asset value (“NAV”), trading price, yield, total return
and ability to meet its investment objective, as well as other risks that are
described in greater detail in the Additional
Information About the Funds
section of this Prospectus and in the Statement of Additional Information
(“SAI”). The order of the below risk factors does not indicate the significance
of any particular risk factor.
Asset
Class Risk:
Securities and other assets in the Underlying Index or otherwise held in the
Fund's portfolio may underperform in comparison to the general securities
markets, a particular securities market or other asset classes.
Equity
Securities Risk: Equity securities are subject to
changes in value, and their values may be more volatile than other asset
classes, as a result of such factors as a company’s business performance,
investor perceptions, stock market trends and general economic
conditions.
Capitalization
Risk:
Investing in issuers within the same market capitalization category carries the
risk that the category may be out of favor due to current market conditions or
investor sentiment.
Large-Capitalization
Companies Risk:
Large-capitalization companies may trail the returns of the overall stock
market. Large-capitalization stocks tend to go through cycles of doing better -
or worse - than the stock market in general. These periods have, in the past,
lasted for as long as several years.
Mid-Capitalization
Companies Risk: Mid-capitalization
companies may have greater price volatility, lower trading volume and less
liquidity than large-capitalization companies. In addition, mid-capitalization
companies may have smaller revenues, narrower product lines, less management
depth and experience, smaller shares of their product or service markets, fewer
financial resources and less competitive strength than large-capitalization
companies.
Small-Capitalization
Companies Risk: Compared to mid- and large-capitalization companies,
small-capitalization companies may be less stable and more susceptible to
adverse developments, and their securities may be more volatile and less
liquid.
Micro-Capitalization
Companies Risk:
Stock prices of micro-cap companies are significantly more volatile, and more
vulnerable to adverse business and economic developments, than those of larger
companies, and their earnings and revenues tend to be less predictable (and some
companies may experience significant losses). Microcap stocks may also be thinly
traded, making it difficult for the Fund to buy and sell
them.
Commodity
Exposure Risk: The Fund invests in companies engaged in the uranium industry, which
may be susceptible to fluctuations in the underlying commodities market.
Commodity prices may be influenced or characterized by unpredictable factors,
including, where applicable, high volatility, changes in supply and demand
relationships, weather, agriculture, trade, changes in interest rates and
monetary and other governmental policies, action and inaction. Securities of
companies held by the Fund that are dependent on a single commodity, or are
concentrated on a single commodity sector, may typically exhibit even higher
volatility attributable to commodity prices.
Commodity
Price Relationship Risk:
The Underlying Index measures the performance of companies involved in the
uranium industry and not the performance of the price of uranium itself. The
securities of companies involved in the uranium industry may under- or
over-perform the price of uranium over the short-term or the
long-term.
Currency
Risk: The Fund may invest in securities denominated in foreign
currencies. Because the Fund's NAV is determined in U.S. dollars, the Fund's NAV
could decline if currencies of the underlying securities depreciate against the
U.S. dollar or if there are delays or limits on repatriation of such currencies.
Currency exchange rates can be very volatile and can change quickly and
unpredictably. As a result, the Fund's NAV may change quickly and without
warning, which could have a significant negative impact on the
Fund.
Custody
Risk: The Fund may hold foreign securities and cash with foreign banks,
agents, and securities depositories appointed by the Fund's custodian.
Investments in emerging markets may be subject to even greater custody risks
than investments in more developed markets. Less developed markets are more
likely to experience problems with the clearing and settling of trades and the
holding of securities by local banks, agents and depositories.
Exposure
to Non-Uranium Markets Risk: Although the Fund invests a large percentage of its assets in the
securities of companies that are active in the exploration and/or mining of
uranium, these companies may derive a significant percentage of their profits
from other business activities including, for example, physical uranium
investments and technologies related to the uranium industry. As a result, the
performance of these markets and the profits of these companies from such
activities may significantly impact the Fund's performance.
Focus
Risk:
To the extent that the Underlying Index focuses in investments related to a
particular industry or group of industries, the Fund will also focus its
investments to approximately the same extent. Similarly, if the Underlying Index
has significant exposure to one or more sectors, the Fund’s investments will
likely have significant exposure to such sectors. In such event, the Fund’s
performance will be particularly susceptible to adverse events impacting such
industry or sector, which may include, but are not limited to, the following:
general economic conditions or cyclical market patterns that could negatively
affect supply and demand; competition for resources; adverse labor relations;
political or world events; obsolescence of technologies; and increased
competition or new product introductions that may affect the profitability or
viability of companies in a particular industry or sector. As a result, the
value of the Fund’s investments may rise and fall more than the value of shares
of a fund that invests in securities of companies in a broader range of
industries or sectors.
Risks
Related to Investing in the Energy Sector:
The value of securities issued by companies in the energy sector may decline for
many reasons, including, without limitation, changes in energy prices;
international politics; energy
conservation; the success of exploration projects; natural disasters
or other catastrophes; changes in exchange rates, interest rates, or economic
conditions; changes in demand for energy products and services; and tax and
other government regulatory policies. Actions taken by central governments may
dramatically impact supply and demand forces that influence energy prices,
resulting in sudden decreases in value for companies in the energy
sector.
Risks
Related to Investing in the Exploration Industry:
The exploration and development of mineral deposits involve significant
financial risks over a significant period of time, which even a combination of
careful evaluation, experience and knowledge may not eliminate. Few properties
which are explored are ultimately developed into producing mines. Major
expenditures may be required to establish reserves by drilling and to construct
mining and processing facilities at a site. In addition, mineral exploration
companies typically operate at a loss and are dependent on securing equity
and/or debt financing, which might be more difficult to secure for an
exploration company than for a more established
counterpart.
Risks
Related to Investing in the Oil, Gas and Consumable Fuels
Industry: The oil, gas and consumable fuels industry is cyclical and highly
dependent on the market price of fuel. The market value of companies in the oil,
gas and consumable fuels industry are strongly affected by the levels and
volatility of global commodity prices, supply and demand, capital expenditures
on exploration and production, energy conservation efforts, the prices of
alternative fuels, exchange rates and technological advances. Companies in this
sector are subject to substantial government regulation and contractual fixed
pricing, which may increase the cost of business and limit these companies’
earnings. Actions taken by central governments may dramatically impact supply
and demand forces that influence the market price of fuel, resulting in sudden
decreases in value for companies in the oil, gas and consumable fuels industry.
A significant portion of their revenues depends on a relatively small number of
customers, including governmental entities and utilities. As a result,
governmental budget restraints may have a material adverse effect on the stock
prices of companies in the industry.
Risks
Related to Investing in the Uranium Mining Industry:
Securities in the Fund’s portfolio may be significantly subject to the effects
of competitive pressures in the uranium mining industry and the price of
uranium. The price of uranium may be affected by changes in inflation rates,
interest rates, monetary policy, economic conditions and political stability.
The price of uranium may fluctuate substantially over short periods of time,
therefore the Fund’s Share price may be more volatile than other types of
investments. In addition, uranium mining companies may also be significantly
affected by import controls, worldwide competition, liability for environmental
damage, depletion of resources, and mandated expenditures for safety and
pollution control devices. The primary demand for uranium is from the nuclear
energy industry, which uses uranium as fuel for nuclear power plants. Demand for
nuclear energy may face considerable risk as a result of, among other risks,
incidents and accidents, breaches of security, ill-intentioned acts or
terrorism, air crashes, natural disasters (such as floods or earthquakes),
equipment malfunctions or mishandling in storage, handling, transportation,
treatment or conditioning of substances and nuclear
materials.
Foreign
Securities Risk: The Fund may invest, within U.S. regulations, in foreign
securities. The Fund's investments in foreign securities can be riskier than
U.S. securities investments. Investments in the securities of foreign issuers
(including investments in American Depositary Receipts (“ADRs”) and Global
Depositary Receipts (“GDRs”)) are subject to the risks associated with investing
in those foreign markets, such as heightened risks of inflation or
nationalization. The prices of foreign securities and the prices of U.S.
securities have, at times, moved in opposite directions. In addition, securities
of foreign issuers may lose value due to political, economic and geographic
events affecting a foreign issuer or market. During periods of social, political
or economic instability in a country or region, the value of a foreign security
traded on U.S. exchanges could be affected by, among other factors, increasing
price volatility, illiquidity, or the closure of the primary market on which the
security (or the security underlying the ADR or GDR) is traded. The Fund may
lose money due to political, economic and geographic events affecting a foreign
issuer or market. Where all or a portion of the Fund's underlying securities
trade in a market that is closed when the market in which the Fund's Shares are
listed and trading is open, there may be differences between the last quote from
the security’s closed foreign market and the value of the security during the
Fund’s domestic trading day. This, in turn, could lead to differences between
the market price of the Fund’s Shares and the underlying value of those
shares.
Geographic
Risk: A
natural, biological or other disaster could occur in a geographic region in
which the Fund invests, which could affect the economy or particular business
operations of companies in the specific geographic region, causing an adverse
impact on the Fund’s investments in the affected region or in a region
economically tied to the affected region. The securities in which the Fund
invests and, consequently, the Fund are also subject to specific risks as a
result of their business operations, including, but not limited to:
Risk
of Investing in Australia: Investments
in Australian issuers may subject the Fund to regulatory, political, currency,
security, and economic risk specific to Australia. The Australian economy is
heavily dependent on exports
from
the energy, agricultural and mining sectors. This makes the Australian economy
susceptible to fluctuations in the commodity markets. Australia is also
dependent on trading with key trading partners.
Risk
of Investing in Canada: The Canadian economy is highly dependent on the demand for and
price of natural resources. As a result, the Canadian market is relatively
concentrated in issuers involved in the production and distribution of natural
resources and any changes in these sectors could have an adverse impact on the
Canadian economy. The Canadian economy is heavily dependent on relationships
with certain key trading partners, including the United States and China.
Developments in the United States, including renegotiation of the North American
Free Trade Agreement (“NAFTA”) and ratification of the successor United
States-Mexico-Canada Agreement (“USMCA”), which went into effect on July 1,
2020, as well as the imposition of additional tariffs by the United States, may
have implications for the trade arrangements between the United States and
Canada, which could negatively affect the value of securities held by the
Fund.
Risk
of Investing in Developed Markets:
The Fund’s investment in a developed country issuer may subject the Fund to
regulatory, political, currency, security, economic and other risks associated
with developed countries. Developed countries tend to represent a significant
portion of the global economy and have generally experienced slower economic
growth than some less developed countries. Certain developed countries have
experienced security concerns, such as terrorism and strained international
relations. Incidents involving a country’s or region’s security may cause
uncertainty in its markets and may adversely affect its economy and the Fund’s
investments. In addition, developed countries may be impacted by changes to the
economic conditions of certain key trading partners, regulatory burdens, debt
burdens and the price or availability of certain
commodities.
Risk
of Investing in Emerging Markets:
The Fund targets uranium companies globally and is expected to invest in
securities in emerging market countries. Investments in emerging markets may be
subject to a greater risk of loss than investments in developed markets.
Securities markets of emerging market countries are less liquid, subject to
greater price volatility, have smaller market capitalizations, have less
government regulation, and are not subject to as extensive and frequent
accounting, financial, and other reporting requirements as the securities
markets of more developed countries, and there may be greater risk associated
with the custody of securities in emerging markets. It may be difficult or
impossible for the Fund to pursue claims against an emerging market issuer in
the courts of an emerging market country.
There may be significant obstacles to obtaining information
necessary for investigations into or litigation against emerging market
companies and shareholders may have limited legal rights and remedies. Emerging
markets may be more likely to experience inflation, political turmoil and rapid
changes in economic conditions than more developed markets. Emerging market
economies’ exposure to specific industries, such as tourism, and lack of
efficient or sufficient health care systems, could make these economies
especially vulnerable to global crises, including but not limited to, pandemics
such as the global COVID-19 pandemic. Certain emerging market countries may have
privatized, or have begun the process of privatizing, certain entities and
industries. Privatized entities may lose money or be
re-nationalized.
Risk
of Investing in Frontier and Standalone Markets: Standalone markets are those that do not meet the criteria for
classification as frontier markets or emerging markets. Because standalone
markets often face highly unique circumstances that range from war to liquidity
issues, investors should carefully assess each market and determine the reason
for standalone classification prior to making any investment. In some cases,
standalone markets may be subject to significant sanctions by the international
community and may abruptly lose foreign investors as a result. Investments in
frontier markets may be subject to a greater risk of loss than investments in
more developed and traditional emerging market. Frontier markets often have less
uniformity in accounting and reporting requirements, unreliable securities
valuations and greater risk associated with custody of securities. Economic,
political, liquidity and currency risks may be more pronounced with respect to
investments in frontier markets than in emerging markets and developed markets.
Frontier market countries generally have smaller economies or less developed
capital markets than traditional emerging markets, and, as a result, the risks
of investing in emerging markets countries are magnified in frontier countries.
The economies of frontier countries are less correlated to global economic
cycles than those of their more developed counterparts and their markets have
low trading volumes and the potential for extreme price volatility and
illiquidity. These factors make investing in standalone and frontier markets
significantly riskier than in other countries and any one of them could cause
the price of the Fund's Shares to decline.
Risk
of Investing in Kazakhstan: Kazakhstan’s
economy is a resource-based economy that is heavily dependent on the export of
natural resources. Fluctuations in certain commodity markets or sustained low
prices for its exports could have a significant, adverse effect on Kazakhstan’s
economy. While Kazakhstan has recently pursued economic reform
and
liberalization of many areas in the economy, there is no guarantee that the
government will not become directly involved in aspects of the economy in the
future.
Risk
of Investing in South Korea: Investments
in South Korean issuers may subject the Fund to legal, regulatory, political,
currency, security, and economic risks that are specific to South Korea. In
addition, economic and political developments of South Korea’s neighbors,
including escalated tensions involving North Korea and any outbreak of
hostilities involving North Korea, or even the threat of an outbreak of
hostilities, may have a severe adverse effect on the South Korean
economy.
International
Closed Market Trading Risk: To
the extent that the underlying investments held by the Fund trade on foreign
exchanges that may be closed when the securities exchange on which the Fund’s
Shares trade is open, there are likely to be deviations between the current
price of such an underlying security and the last quoted price for the
underlying security (i.e., the Fund’s quote from the closed foreign market).
These deviations could result in premiums or discounts to the Fund’s NAV that
may be greater than those experienced by other exchange-traded funds
("ETFs").
Investable
Universe of Companies Risk: The investable universe of companies in which the Fund may invest
may be limited. If a company no longer meets the Index Provider’s criteria for
inclusion in the Underlying Index, the Fund may need to reduce or eliminate its
holdings in that company. The reduction or elimination of the Fund’s holdings in
the company may have an adverse impact on the liquidity of the Fund’s overall
portfolio holdings and on Fund performance.
Issuer
Risk: Fund performance depends on the performance of individual companies
in which the Fund invests. Changes to the financial condition of any of those
companies may cause the value of such company's securities to
decline.
Market
Risk: Turbulence in the financial markets and reduced liquidity may
negatively affect issuers, which could have an adverse effect on the Fund. If
the securities held by the Fund experience poor liquidity, the Fund may be
unable to transact at advantageous times or prices, which may decrease the
Fund’s returns. In addition, there is a risk that policy changes by central
governments and governmental agencies, including the U.S. Federal Reserve or the
European Central Bank, which could include increasing interest rates, could
cause increased volatility in financial markets and lead to higher levels of
Fund redemptions from Authorized Participants, which could have a negative
impact on the Fund. Furthermore, local, regional or global events such as war,
acts of terrorism, the spread of infectious illness or other public health
issues, recessions, raising of interest rates, or other events could have a
significant impact on the Fund and its investments and trading of its Shares.
This increases the risk that monetary policy may provide less support should
economic growth slow. Additionally, China’s shift away from a zero-COVID policy
creates both opportunities and risks, causing uncertainty for global economic
growth. Market risk factors may result in increased volatility and/or decreased
liquidity in the securities markets. The Fund’s NAV could decline over short
periods due to short-term market movements and over longer periods during market
downturns.
Non-Diversification
Risk:
The Fund is classified as a “non-diversified” investment company under the
Investment Company Act of 1940 ("1940 Act"). As a result, the Fund is subject to
the risk that it may be more volatile than a diversified fund because the Fund
may invest its assets in a smaller number of issuers or may invest a larger
proportion of its assets in a single issuer. As a result, the gains and losses
on a single investment may have a greater impact on the Fund’s NAV and may make
the Fund more volatile than more diversified funds.
Operational
Risk: The Fund is exposed to operational risk arising from a number of
factors, including but not limited to human error, processing and communication
errors, errors of the Fund's service providers, counterparties or other
third-parties, failed or inadequate processes and technology or systems
failures. Additionally, cyber security failures or breaches of the electronic
systems of the Fund, the Adviser, and the Fund's other service providers, market
makers, Authorized Participants or the issuers of securities in which the Fund
invests have the ability to cause disruptions and negatively impact the Fund's
business operations, potentially resulting in financial losses to the Fund and
its shareholders. The Fund and the Adviser seek to reduce these operational
risks through controls and procedures. However, these measures do not address
every possible risk and may be inadequate for those risks that they are intended
to address.
Passive
Investment Risk:
The Fund is not actively managed, and the Adviser does not attempt to take
defensive positions in declining markets. Unlike many investment companies, the
Fund does not seek to outperform its Underlying Index. Therefore, it would not
necessarily buy or sell a security unless that security is added or removed,
respectively, from the Underlying Index, even if that security generally is
underperforming. Additionally, if a constituent of the Underlying Index were
removed, even outside of a regular rebalance of the Underlying Index, the
Adviser anticipates that the Fund would sell such security. Maintaining
investments in securities regardless of market conditions or the performance of
individual securities could cause the Fund’s return to be lower than if the Fund
employed an active strategy.
Index-Related
Risk: There is no guarantee that the Fund will achieve a high degree of
correlation to the Underlying Index and therefore achieve its investment
objective. Market disruptions and regulatory restrictions could have an adverse
effect on the Fund’s ability to adjust its exposure to the required levels in
order to track the Underlying Index. Errors in index data, index computations
and/or the construction of the Underlying Index in accordance with its
methodology may occur from time to time and may not be identified and corrected
by the Index Provider for a period of time or at all, which may have an adverse
impact on the Fund and its shareholders.
Management
Risk: The Fund may not fully replicate its Underlying Index and may hold
securities not included in its Underlying Index. The Adviser’s investment
strategy, the implementation of which is subject to a number of constraints, may
cause the Fund to underperform the market or its relevant benchmark or adversely
affect the ability of the Fund to achieve its investment
objective.
Tracking
Error Risk: Tracking error may occur because of
differences between the instruments held in the Fund's portfolio and those
included in the Underlying Index, pricing differences, transaction costs
incurred by the Fund, the Fund's holding of uninvested cash, size of the Fund,
differences in timing of the accrual of or the valuation of dividends or
interest, tax gains or losses, changes to the Underlying Index or the costs to
the Fund of complying with various new or existing regulatory requirements. This
risk may be heightened during times of increased market volatility or other
unusual market conditions. Tracking error also may result because the Fund
incurs fees and expenses, while the Underlying Index does not. ETFs that track
indices with significant weight in emerging markets issuers may experience
higher tracking error than other ETFs that do not track such
indices.
Risks
Associated with Exchange-Traded Funds:
As an ETF, the Fund is subject to the following risks:
Authorized
Participants Concentration Risk: The Fund has a limited number of financial institutions that may
act as Authorized Participants and engage in creation or redemption transactions
directly with the Fund, and none of those Authorized Participants is obligated
to engage in creation and/or redemption transactions. To the extent that those
Authorized Participants exit the business or are unable to process creation
and/or redemption orders, such as in times of market stress, Shares may be more
likely to trade at a premium or discount to NAV and/or at wider intraday bid-ask
spreads, and possibly face trading halts and/or delisting from an exchange.
Authorized Participants Concentration Risk may be heightened because the Fund
invests in non-U.S. securities.
Large
Shareholder Risk: Redemptions
by large shareholders could have a significant negative impact on the Fund. If a
large shareholder were to redeem all, or a large portion, of its Shares, there
is no guarantee that the Fund will be able to maintain sufficient assets to
continue operations in which case the Board of Trustees may determine to
liquidate the Fund. In addition, transactions by large shareholders may account
for a large percentage of the trading volume on a national securities exchange
and may, therefore, have a material upward or downward effect on the market
price of the Shares.
Listing
Standards Risk: The
Fund is required to comply with listing requirements adopted by the listing
exchange. Non-compliance with such requirements may result in the Fund's shares
being delisted by the listing exchange. Any resulting liquidation of the Fund
could cause the Fund to incur elevated transaction costs and could result in
negative tax consequences for its shareholders.
Market
Trading Risks and Premium/Discount
Risks: Shares of the Fund are publicly traded
on a national securities exchange, which may subject shareholders to numerous
market trading risks. In stressed market conditions, the market for the Shares
may become less liquid in response to the deteriorating liquidity of the Fund’s
portfolio. This adverse effect on the liquidity of the Shares, as well as
disruptions to creations and redemptions, the existence of extreme market
volatility or potential lack of assets in the Fund or an active trading market
for Shares may result in Shares trading at a significant premium or discount to
NAV. If a shareholder purchases Shares at a time when the market price is at a
premium to the NAV or sells Shares at a time when the market price is at a
discount to the NAV, the shareholder may sustain losses. The NAV of the Fund is
calculated at the end of each business day and fluctuates with changes in the
market value of the Fund’s holdings. The trading price of the Fund’s Shares
fluctuates, in some cases materially, throughout trading hours in response to
changes in the Fund’s NAV.
Securities
Lending Risk:
Securities lending involves a risk of loss because the borrower may fail to
return the securities in a timely manner or at all. If the Fund is not able to
recover the securities loaned, it may sell the collateral and purchase a
replacement security in the market. Lending securities entails a risk of loss to
the Fund if and to the extent that the market value of the loaned securities
increases and the collateral is not increased accordingly. Additionally, the
Fund will bear any loss on the investment of cash collateral it receives. These
events could also trigger adverse tax consequences for the Fund. As securities
on
loan may not be voted by the Fund, there is a risk that the Fund may
not be able to recall the securities in sufficient time to vote on material
proxy matters.
Tax
Status Risk: The
Fund intends to pay dividends each taxable year to enable it to continue to
satisfy the distribution requirements necessary to qualify for treatment as a
regulated investment company ("RIC"). If the Fund were to distribute to its
shareholders less than the minimum amount required for any year, the Fund would
become subject to federal income tax for that year on all of its taxable income
and recognized gains, even those distributed to its shareholders. In addition,
under the Internal Revenue Code of 1986, as amended (the "Code"), the Fund may
not earn more than 10% of its annual gross income from gains resulting from the
sale of commodities and precious metals. This could make it more difficult for
the Fund to pursue its investment strategy and maintain qualification as a RIC.
In lieu of potential disqualification as a RIC, the Fund is permitted to pay a
tax for certain failures to satisfy this income requirement, which, in general,
are limited to those due to reasonable cause and not willful
neglect.
Trading
Halt Risk:
An exchange or market may close or issue trading halts on specific securities,
or the ability to buy or sell certain securities or financial instruments may be
restricted, which may result in the Fund being unable to buy or sell certain
securities or financial instruments. In such circumstances, the Fund may be
unable to rebalance its portfolio, may be unable to accurately price its
investments and/or may incur substantial trading
losses.
Valuation
Risk: The sales price the Fund could receive for a security may differ
from the Fund’s valuation of the security and may differ from the value used by
the Underlying Index, particularly for securities that trade in low value or
volatile markets or that are valued using a fair value methodology (such as
during trading halts). The value of the securities in the Fund's portfolio
may change on days when shareholders will not be able to purchase or sell the
Fund's Shares.
PERFORMANCE
INFORMATION
The bar chart
and table that follow show how the Fund performed on a calendar year basis and
provide an indication of the risks of investing in the Fund by showing changes
in the Fund's performance from year to year and by showing how the Fund's
average annual returns for the indicated periods compare with the Fund's
benchmark index and a broad measure of market performance.
Effective May 1, 2018, the Fund changed its underlying index from Solactive
Global Uranium Total Return Index to the Solactive Global Uranium & Nuclear
Components Transition TR Index. Effective August 1, 2018, the Fund changed its
underlying index to the Solactive Global Uranium & Nuclear Components Total
Return Index. The Fund's past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.globalxetfs.com.
Annual Total Returns
(Years Ended December 31)
|
|
|
|
|
|
|
| |
Best
Quarter: |
12/31/2020 |
37.84% |
Worst
Quarter: |
6/30/2022 |
-28.59% |
Average Annual
Total Returns (for the Periods Ended December 31,
2023)
|
|
|
|
|
|
|
|
|
|
| |
|
One
Year Ended December 31, 2023 |
Five
Years Ended December 31, 2023 |
Ten
Years Ended December 31. 2023 |
Global
X Uranium ETF: |
|
| |
·Return
before taxes |
46.23% |
22.49% |
2.30% |
·Return
after taxes on distributions1 |
42.97% |
21.19% |
1.10% |
·Return
after taxes on distributions and sale of Fund Shares1 |
27.53% |
17.91% |
1.15% |
Hybrid
Solactive Global Uranium & Nuclear Components Total Return Index
(net)2
(Index returns reflect
invested dividends net of withholding taxes, but reflect no deduction for
fees, expenses, or other
taxes) |
46.93% |
23.10% |
3.30% |
MSCI
EAFE Index (net)
(Index returns reflect
invested dividends net of withholding taxes, but reflect no deduction for
fees, expenses, or other
taxes) |
18.24% |
8.16% |
4.28% |
1 After-tax returns are
calculated using the historical highest individual U.S. federal marginal income
tax rates and do not reflect the impact of state and local
taxes. Your actual after-tax returns
will depend on your specific tax situation and may differ from those shown
above. After-tax returns are not relevant to investors who hold Shares of the
Fund through tax-advantaged arrangements, such as 401(k) plans or individual
retirement accounts (IRAs).
2 Hybrid index
performance reflects the performance of the Solactive Global Uranium Total
Return Index through April 30, 2018, the Solactive Global Uranium & Nuclear
Components Transition TR Index through July 31, 2018 and the Solactive Global
Uranium & Nuclear Components Total Return Index thereafter.
FUND
MANAGEMENT
Investment
Adviser:
Global X Management Company LLC.
Portfolio
Managers:
The professionals primarily responsible for the day-to-day management of the
Fund are Nam To, CFA; Wayne Xie; Vanessa Yang; and Sandy Lu, CFA (“Portfolio
Managers”). Mr. To has been a Portfolio Manager of the Fund since March 1, 2018.
Mr. Xie has been a Portfolio Manager of the Fund since March 1, 2019. Ms. Yang
has been a Portfolio Manager of the Fund since December 2020. Mr. Lu has been a
Portfolio Manager of the Fund since March 2022.
PURCHASE
AND SALE OF FUND SHARES
Shares
of the Fund are or will be listed and traded at market prices on a national
securities exchange. Shares may only be purchased and sold on the exchange
through a broker-dealer. The price of Shares is based on market price, and
because ETF shares trade at market prices rather than at NAV, Shares may trade
at a price greater than NAV (a premium) or less than NAV (a discount). Only
“Authorized Participants” (as defined in the SAI) who have entered into
agreements with the Fund’s distributor, SEI Investments Distribution Co.
(“Distributor”), may engage in creation or redemption transactions directly with
the Fund. The Fund will only issue or redeem Shares that have been aggregated
into blocks called Creation Units. The Fund will issue or redeem Creation Units
in return for a basket of cash and/or securities that the Fund specifies any day
that the national securities exchanges are open for business (“Business Day”).
An investor may incur costs attributable to the difference between the highest
price a buyer is willing to pay to purchase shares of the Fund (bid) and the
lowest price a seller is willing to accept for shares of the Fund (ask) when
buying or selling shares in the secondary market (the “bid-ask spread”). To
access information regarding the Fund’s net asset value, market price, premiums
and discounts, and bid-ask spreads, please go to https://www.globalxetfs.com.
TAX
INFORMATION
The
Fund intends to make distributions that may be taxable to you as ordinary income
or capital gains, unless you are investing through a tax-advantaged arrangement,
such as a 401(k) plan or an individual retirement account ("IRA"), in which case
distributions from such tax-advantaged arrangement may be taxable to you.
PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
The
Adviser and its related companies may pay broker-dealers or other financial
intermediaries (such as a bank) for the sale of Fund Shares and related
services. These payments may create a conflict of interest by influencing your
broker-dealer, sales persons or other intermediary or its employees or
associated persons to recommend the Fund over another investment. Ask your
financial adviser or visit your financial intermediary’s website for more
information.
ADDITIONAL
INFORMATION ABOUT THE FUNDS
This
Prospectus contains information about investing in a Fund. Please read this
Prospectus carefully before you make any investment decisions. Shares of a Fund
are listed for trading on a national securities exchange. The market price for a
Share of a Fund may be different from the Fund's most recent NAV. ETFs are funds
that trade like other publicly-traded securities. A Fund is designed to track an
Underlying Index. Similar to shares of an index mutual fund, each Share of a
Fund represents an ownership interest in an underlying portfolio of securities.
Unlike shares of a mutual fund, which can be bought and redeemed from the
issuing fund by all shareholders at a price based on NAV, Shares of a Fund may
be purchased or redeemed directly from the Fund at NAV solely by Authorized
Participants and only in Creation Unit increments. Also, unlike shares of a
mutual fund, Shares of a Fund are listed on a national securities exchange and
trade in the secondary market at market prices that change throughout the day. A
Fund is designed to be used as part of broader asset allocation strategies.
Accordingly, an investment in a Fund should not constitute a complete investment
program. An index is a financial calculation, based on a grouping of financial
instruments, and is not an investment product, while a Fund is an actual
investment portfolio. The performance of a Fund and its Underlying Index may
vary for a number of reasons, including transaction costs, non-U.S. currency
valuations, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances and differences between a Fund’s portfolio and the Underlying
Index resulting from the Fund's legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index.
Each
Fund invests at least 80% of its total assets in the securities of the
Underlying Index. Each Fund’s 80% investment policy is non-fundamental and
requires 60 days prior written notice to shareholders before it can be changed.
The Adviser anticipates that, generally, each Fund will hold all of the
securities that comprise its Underlying Index in proportion to their weightings
in such Underlying Index. However, under various circumstances, it may not be
possible or practicable to purchase all of those
securities
in those weightings. In these circumstances, a Fund may purchase a sample of
securities in its Underlying Index. There also may be instances in which the
Adviser may choose to underweight or overweight a security in a Fund’s
Underlying Index, purchase securities not in the Fund’s Underlying Index that
the Adviser believes are appropriate to substitute for certain securities in
such Underlying Index or utilize various combinations of other available
investment techniques in seeking to replicate as closely as possible, before
fees and expenses, the price and yield performance of a Fund’s Underlying Index.
In addition, each Fund may also invest in equity index futures for cash flow
management purposes and as a portfolio management technique. Each Fund may sell
securities that are represented in its Underlying Index in anticipation of their
removal from such Underlying Index or purchase securities not represented in its
Index in anticipation of their addition to such Underlying Index. Each Fund’s
investment objective and its Underlying Index may be changed without shareholder
approval upon at least 60 days prior written notice to shareholders.
A
FURTHER DISCUSSION OF PRINCIPAL RISKS
Each
Fund is subject to various risks, including the principal risks noted below, any
of which may adversely affect the Fund’s NAV, trading price, yield, total return
and ability to meet its investment objective. You could lose all or part of your
investment in the Fund, and the Fund could underperform other investments.
Asset
Class Risk
Asset
Class Risk applies to each Fund
The
returns from the types of securities and/or assets in which the Fund invests may
under-perform returns from the various general securities markets or different
asset classes. The assets in the Underlying Index may under-perform investments
that track other markets, segments, sectors or assets. Different types of assets
tend to go through cycles of out-performance and under-performance in comparison
to the general securities markets.
Equity
Securities Risk
Equity
Securities Risk applies to each Fund
The
Fund may invest in equity securities, which are subject to changes in value that
may be attributable to market perception of a particular issuer, general stock
market fluctuations that affect all issuers, or as a result of such factors as a
company’s business performance, investor perceptions, stock market trends and
general economic conditions. Investments in equity securities may be more
volatile than investments in other asset classes.
Capitalization
Risk
Investing
in issuers within the same market capitalization category carries the risk that
the category may be out of favor due to current market conditions or investor
sentiment.
Large-Capitalization
Companies Risk
Large-Capitalization
Companies Risk applies to the Global X Copper Miners ETF and Global X Uranium
ETF
Large-capitalization
companies may trail the returns of the overall stock market.
Large-capitalization stocks tend to go through cycles of doing better - or worse
- than the stock market in general. These periods have, in the past, lasted for
as long as several years.
Mid-Capitalization
Companies Risk
Mid-Capitalization
Companies Risk applies to each Fund
Mid-capitalization
companies may have greater price volatility, lower trading volume and less
liquidity than large-capitalization companies. In addition, mid-capitalization
companies may have smaller revenues, narrower product lines, less management
depth and experience, smaller shares of their product or service markets, fewer
financial resources and less competitive strength than large-capitalization
companies.
Small-Capitalization
Companies Risk
Small-Capitalization
Companies Risk applies to each Fund
The
Fund may invest a significant percentage of its assets in small-capitalization
companies. If it does so, it may be subject to certain risks associated with
small-capitalization companies. These companies often have greater price
volatility, lower trading volume and less liquidity than larger, more
established companies. In addition, these companies are often subject to less
analyst coverage and may be in early and less predictable periods of their
corporate existences. These companies tend to have smaller revenues, narrower
product lines, less management depth and experience, smaller shares of their
product or service markets, fewer financial resources and less competitive
strength than larger companies.
Micro-Capitalization
Companies Risk
Micro-Capitalization
Companies Risk applies to the Global X Silver Miners ETF and Global X Uranium
ETF
The
Fund may invest in micro-capitalization companies. These companies are subject
to substantially greater risks of loss and price fluctuations because their
earnings and revenues tend to be less predictable (and some companies may
experience significant losses), and their share prices tend to be more volatile
and their markets less liquid than companies with larger market capitalizations.
Micro-capitalization companies may be newly formed or in the early stages of
development, with limited product lines, markets or financial resources and may
lack management depth. In addition, there may be less public information
available about these companies. The shares of micro-capitalization companies
tend to trade less frequently than those of larger, more established companies,
which can adversely affect the pricing of these securities and the future
ability to sell these securities. Also, it may take a long time before the Fund
realizes a gain, if any, on an investment in a micro-capitalization company.
Commodity
Exposure Risk
Commodity
Exposure Risk applies to each Fund
To
the extent that its Underlying Index invests in, or otherwise has exposure to,
securities and markets that are susceptible to fluctuations in certain commodity
markets, any negative changes in commodity markets could have a great impact on
the Fund. Commodity prices may be influenced or characterized by unpredictable
factors, including, where applicable, high volatility, changes in supply and
demand relationships, weather, agriculture, trade, changes in interest rates and
monetary and other governmental policies, action and inaction. Securities of
companies held by the Fund that are dependent on a single commodity, or are
concentrated on a single commodity sector, may typically exhibit even higher
volatility attributable to commodity prices.
Commodity
Price Relationship Risk
Commodity
Price Relationship Risk applies to each Fund
The
Underlying Index measures the performance of companies engaged in a particular
industry and not the performance of commodities prices themselves. Companies may
under- or over-perform commodities prices over the short-term or the long-term.
Currency
Risk
Currency
Risk applies to each Fund
Foreign
currencies are subject to risks, which include changes in the debt level and
trade deficit of the country issuing the foreign currency; inflation rates of
the United States and the country issuing the foreign currency; investors’
expectations concerning inflation rates; interest rates of the United States and
the country issuing the foreign currency; investors’ expectations concerning
interest rates; investment and trading activities of mutual funds, hedge funds
and currency funds; and global or regional political, economic or financial
events and situations.
In
addition, a foreign currency in which the Fund invests may not maintain its
long-term value in terms of purchasing power in the future. When the price of a
foreign currency in which the Fund invests declines, it may have an adverse
impact on the Fund.
Foreign
exchange rates are influenced by the factors identified above and may also be
influenced by: changing supply and demand for a particular currency; monetary
policies of governments (including exchange control programs, restrictions on
local exchanges or markets and limitations on foreign investment in a country or
on investment by residents of a country in other
countries);
changes in balances of payments and trade; trade restrictions; and currency
devaluations and revaluations. Also, governments from time to time intervene in
the currency markets, directly and by regulation, in order to influence prices
directly. These events and actions are unpredictable. The resulting volatility
in the USD/foreign currency exchange rate could materially and adversely affect
the performance of the Fund.
Custody
Risk
Custody
Risk applies to each Fund
Custody
risk refers to risks in the process of clearing and settling trades and in the
holding of securities by local banks, agents and depositories. Low trading
volumes and volatile prices in less developed markets make trades harder to
complete and settle. Local agents are held only to the standard of care of the
local markets. Governments or trade groups may compel local agents to hold
securities in designated depositories that are subject to independent
evaluation. Generally, the less developed a country’s securities market, the
greater the likelihood of custody problems occurring.
Exposure
to Non-Uranium Markets Risk
Exposure
to Non-Uranium Markets Risk applies to the Global X Uranium ETF
Although
the Fund invests a large percentage of its assets in the securities of companies
that are active in the exploration and/or mining of uranium, these companies may
derive a significant percentage of their profits from other business activities
including, for example, physical investments and technologies related to the
uranium industry. As a result, the performance of these markets and the profits
of these companies from such activities may significantly impact the Fund's
performance.
Focus
Risk
Focus
Risk applies to each Fund
In
following its methodology, the Underlying Index may be focused to a significant
degree in securities of issuers in a particular industry or group of industries
and/or may have significant exposure to one or more sectors. To the extent that
the Underlying Index focuses in the securities of issuers in such an area, the
Fund will also focus its investments to approximately the same extent. In such
event, the Fund’s performance will be particularly susceptible to adverse events
impacting such industry or sector, and the Fund will face greater risk than if
it were diversified broadly over numerous such areas. Such heightened risks, any
of which may adversely affect the companies in which the Fund invests, may
include, but are not limited to, the following: general economic conditions or
cyclical market patterns that could negatively affect supply and demand;
competition for resources; adverse labor relations; political or world events;
obsolescence of technologies; and increased competition or new product
introductions that may affect the profitability or viability of companies in a
particular industry or sector. In addition, at times, such industry, group of
industries or sector may be out of favor and underperform other such categories
or the market as a whole.
Risks
Related to Investing in the Energy Sector
Risks
Related to Investing in the Energy Sector applies to the Global X Uranium
ETF
The
success of companies in the energy sector may be cyclical and highly dependent
on energy prices. Securities of companies in the energy sector are subject to
swift energy price and supply fluctuations caused by events relating to
international politics, energy conservation, the success of exploration
projects, and tax and other governmental regulatory policies. Actions taken by
central governments may dramatically impact supply and demand forces that
influence energy prices, resulting in sudden decreases in value for companies in
the energy sector. Weak demand for the companies’ products or services or for
energy products and services in general, as well as negative developments in
these other areas, would adversely impact the Fund's performance. Companies in
the oil and gas sector (including alternative energy suppliers) may be adversely
affected by natural disasters or other catastrophes and may be at risk for
environmental damage claims. Additionally, these companies could be negatively
impacted by the adoption of other and/or novel energy sources, driven by
economic, environmental, and/or regulatory reasons, among others. These
companies may also be adversely affected by changes in exchange rates, interest
rates, economic conditions or world events in the regions that the companies
operate (i.e., expropriation, nationalization, confiscation of assets and coups,
social unrest, violence or labor unrest). Investments in companies located in
emerging market countries may heighten these risks. Companies engaged in the
distribution of energy, including electricity and gas, may be adversely affected
by governmental limitation on rates charged to customers. Deregulation and
greater competition may adversely affect
the
profitability of these companies and lead to diversification outside of their
original geographic regions and their traditional lines of business, potentially
increasing risk and making the price of their equity securities more volatile.
Risks
Related to Investing in the Exploration Industry
Risks
Related to Investing in the Exploration Industry applies to each
Fund
Companies
that are only in the exploration stage are typically unable to adopt specific
strategies for controlling the impact of the price of commodities. If a natural
disaster or other event with a significant economic impact occurs in a region
where the companies in which the Fund invests operate, such disaster or event
could negatively affect the profitability of such companies and, in turn, the
Fund’s investment in them. The Fund may invest in early stage mining companies
that are in the exploration stage only or that hold properties that might not
ultimately produce physical commodities. The exploration and development of
mineral deposits involve significant financial risks over a significant period
of time, which even a combination of careful evaluation, experience and
knowledge may not eliminate. Few properties which are explored are ultimately
developed into producing mines. Major expenditures may be required to establish
reserves by drilling and to construct mining and processing facilities at a
site. In addition, many early stage miners operate at a loss and are dependent
on securing equity and/or debt financing, which might be more difficult to
secure for an early stage mining company than for a more.
Risks
Related to Investing in the Materials Sector
Risks
Related to Investing in the Materials Sector applies to the Global X Silver
Miners ETF, Global X Copper Miners ETF and Global X Gold Explorers
ETF
Issuers
in the materials sector could be adversely affected by commodity price
volatility, exchange rates, import controls, increased competition, depletion of
resources, technical advances, labor relations, over-production, litigation and
government regulations, among other factors. At times, worldwide production of
industrial materials has exceeded demand as a result of over-building or
economic downturns, leading to poor investment returns or losses. Issuers in the
materials sector are at risk for environmental damage and product liability
claims and may be adversely affected by depletion of resources, technical
progress, labor relations and governmental regulations.
Risks
Related to Investing in the Metals and Mining Industry
Risks
Related to Investing in the Metals and Mining Industry applies to the Global X
Copper Miners ETF, Global X Silver Miners ETF and Global X Gold Explorers
ETF
Because
the Fund invests in stocks and depositary receipts of U.S. and foreign companies
that are involved in the mining industry, it is subject to certain risks
associated with such companies. Competitive pressures may have a significant
effect on the financial condition of companies in the mining industry. Also,
mining companies are highly dependent on the price of the commodity they
produce. These prices may fluctuate substantially over short periods of time;
therefore the Fund’s Share price may be more volatile than other types of
investments. In particular, a drop in the price of a given commodity could
adversely affect the profitability of mining companies and their ability to
secure financing. In addition, metals and mining companies may be significantly
affected by changes in global demand for certain metals, economic developments,
energy conservation, the success of exploration projects, changes in exchange
rates, interest rates, economic conditions, tax treatment, trade treaties, and
government regulation and intervention, and events in the regions that the
companies to which the Fund has exposure operate (e.g., expropriation,
nationalization, confiscation of assets and property, the imposition of
restrictions on foreign investments or repatriation of capital, military coups,
social or political unrest, violence and labor unrest).
Risks
Related to Investing in the Oil, Gas and Consumable Fuels Industry
Risks
Related to Investing in the Oil, Gas and Consumable Fuels Industry applies to
the Global X Uranium ETF
The
oil, gas and consumable fuels industry is cyclical and highly dependent on the
market price of fuel. The market value of companies in the oil, gas and
consumable fuels industry are strongly affected by the levels and volatility of
global commodity prices, supply and demand, capital expenditures on exploration
and production, energy conservation efforts, the prices of alternative fuels,
exchange rates and technological advances. Companies in this sector are subject
to substantial government regulation and contractual fixed pricing, which may
increase the cost of business and limit these companies’ earnings. Actions taken
by central governments may dramatically impact supply and demand forces
that
influence the market price of fuel, resulting in sudden decreases in value for
companies in the oil, gas and consumable fuels industry. A significant portion
of their revenues depends on a relatively small number of customers, including
governmental entities and utilities. As a result, governmental budget restraints
may have a material adverse effect on the stock prices of companies in the
industry.
Companies
in the oil, gas and consumable fuels industry may also operate in countries with
less developed regulatory regimes or a history of expropriation, nationalization
or other adverse policies. Companies in the oil, gas and consumable fuels
industry also face a significant civil liability from accidents resulting in
injury or loss of life or property, pollution or other environmental mishaps,
equipment malfunctions or mishandling of materials, and a risk of loss from
terrorism or other natural disasters. Any such event could have serious
consequences for the general population of the area affected and result in a
material adverse impact on the Fund’s portfolio securities and the performance
of the Fund. Companies in the oil, gas and consumable fuels industry can be
significantly affected by the supply of and demand for specific products and
services, weather conditions, exploration and production spending, government
regulation, world events and general economic conditions.
Risks
Related to Investing in the Uranium Mining Industry
Risks
Related to Investing in the Uranium Mining Industry applies to the Global X
Uranium ETF
The
companies represented in the Fund’s portfolio are actively involved in the
uranium mining industry. The primary demand for uranium is from the nuclear
energy industry, which uses uranium as fuel for nuclear power plants. A decrease
in the demand for nuclear power would have an adverse effect on the performance
of the Fund. Demand for nuclear energy may face considerable risk as a result
of, among other risks, incidents and accidents, breaches of security,
ill-intentioned acts or terrorism, air crashes, natural disasters (such as
floods or earthquakes), equipment malfunctions or mishandling in storage,
handling, transportation, treatment or conditioning of substances and nuclear
materials. Such events could have serious consequences, especially in case of
radioactive contamination and irradiation of the environment, for the general
population, as well as a material, negative impact on the Fund’s portfolio
companies and thus the Fund’s financial situation.
In
addition, the nuclear energy industry is subject to competitive risk associated
with the prices of other energy sources, such as natural gas and oil. Consumers
of nuclear energy may have the ability to switch between the nuclear energy and
other energy sources, thereby reducing demand for uranium.
Nuclear
activity is also subject to particularly detailed and restrictive regulations,
with a scheme for the monitoring and periodic re-examination of operating
authorization, which primarily takes into account nuclear safety, environmental
and public health protection, and also national safety considerations. These
regulations may be subject to significant tightening by national and
international authorities. This could result in increased operating costs that
could make nuclear power less competitive and thereby reduce demand for uranium.
Furthermore,
uranium prices are subject to fluctuation. The price of uranium has been and
will continue to be affected by numerous factors beyond the Fund’s control. With
respect to uranium, such factors include the demand for nuclear power, political
and economic conditions in uranium producing and consuming countries, uranium
supply from secondary sources and uranium production levels and costs of
production. In addition, the prices of crude oil, natural gas and electricity
produced from traditional hydro power and possibly other undiscovered energy
sources could potentially have a negative impact on the demand for
uranium.
Foreign
Securities Risk
Foreign
Securities Risk applies to each Fund
The
Fund’s assets may be invested within the equity markets of countries outside of
the United States. These markets are subject to special risks associated with
foreign investment, including, but not limited to: lower levels of liquidity and
market efficiency; greater securities price volatility; exchange rate
fluctuations and exchange controls; less availability of public information
about issuers; limitations on foreign ownership of securities; imposition of
withholding or other taxes; imposition of restrictions on the expatriation of
the assets of the Fund; restrictions placed on U.S. investors by U.S.
regulations governing foreign investments; higher transaction and custody costs
and delays in settlement procedures; difficulties in enforcing contractual
obligations; lower levels of regulation of the securities market; weaker
accounting, disclosure and reporting requirements; and legal principles relating
to corporate governance and directors’ fiduciary duties and liabilities.
Shareholder rights under the laws of some foreign countries may not be as
favorable as U.S. laws. Thus, a shareholder may have more
difficulty
in asserting its rights or enforcing a judgment against a foreign company than a
shareholder of a comparable U.S. company. Investment of more than 25% of the
Fund’s total assets in securities located in one country or region will subject
the Fund to increased country or region risk with respect to that country or
region. Where all or a portion of the Fund's underlying securities trade in a
market that is closed when the market in which the Fund's Shares are listed and
trading is open, there may be differences between the last quote from the
security’s closed foreign market and the value of the security during the Fund’s
domestic trading day. This in turn could lead to differences between the market
price of the Fund’s Shares and the underlying value of those shares.
Geographic
Risk
Geographic
Risk applies to each Fund
Geographic
risk is the risk that the Fund’s assets may be focused in countries located in
the same geographic region. This investment focus will subject the Fund to risks
associated with that particular region, or a region economically tied to that
particular region, such as a natural, biological or other disaster. Outbreaks of
contagious viruses and diseases may reduce business activity or disrupt market
activity, and have the potential to exacerbate market risks in the countries and
regions in which they occur. The securities in which the Fund invests and,
consequently, the Fund are also subject to specific risks as a result of their
business operations, including, but not limited to:
Risk
of Investing in Australia
Risk
of Investing in Australia applies to the Global X Copper Miners ETF, Global X
Gold Explorers ETF and Global X Uranium ETF
Investment
in Australian issuers may subject the Fund to regulatory, political, currency,
security, and economic risk specific to Australia. The Australian economy is
heavily dependent on exports from the energy, agricultural and mining sectors.
As a result, the Australian economy is susceptible to fluctuations in the
commodity markets. The Australian economy is also becoming increasingly
dependent on its growing services industry. The Australian economy is dependent
on trading with key trading partners, including the U.S., China, Japan, South
Korea, other Asian and certain European countries. Economic events in the U.S.,
Asia, or in other key trading countries can have a significant economic effect
on the Australian economy. Reduction in spending on Australian products and
services, or changes in any of the economies may cause an adverse impact on the
Australian economy.
Risk
of Investing in Brazil
Risk
of Investing in Brazil applies to the Global X Silver Miners ETF
Investment
in Brazilian issuers involves risks that are specific to Brazil, including
legal, regulatory, political, currency and economic risks. Specifically,
Brazilian issuers are subject to possible regulatory and economic interventions
by the Brazilian government, including the imposition of wage and price controls
and the limitation of imports. In addition, the market for Brazilian securities
is directly influenced by the flow of international capital and economic and
market conditions of certain countries, especially other emerging market
countries in Central and South America. The Brazilian economy has historically
been exposed to high rates of inflation, a high level of debt, and violence,
each of which may reduce and/or prevent economic growth. A rising unemployment
rate could also have the same effect. Corruption and subsequent legal
consequences have led to political instability and sudden changes in
leadership.
Risk
of Investing in Canada
Risk
of Investing in Canada applies to each Fund
The
United States is Canada’s largest trading and investment partner, and the
Canadian economy is significantly affected by developments in the U.S. economy
and by changes in U.S. trade policy. Since the implementation of NAFTA in 1994
among Canada, the United States and Mexico, total two-way merchandise trade
between the United States and Canada has more than doubled. To further this
relationship, the three NAFTA countries entered into the Security and Prosperity
Partnership of North America in March 2005, which has further affected Canada’s
dependency on the U.S. economy. Any downturn in U.S. or Mexican economic
activity is likely to have an adverse impact on the Canadian economy. The
Canadian economy is also dependent upon external trade with other key trading
partners, including China and the European Union. Any trade policy changes by
the United States, China or the European Union which reduced Canada's ability to
trade with such regions could therefore have significant impact on the
Canadian
economy. Developments in the United States, including renegotiation of NAFTA,
ratification of the successor USMCA, which received legislative approval and
went into effect in 2020, and imposition of tariffs by the United States, may
have implications for the trade arrangements among the United States and Canada,
which could negatively affect the value of securities held by the Funds. In
addition, Canada is a large supplier of natural resources (e.g., oil, natural
gas and agricultural products). As a result, the Canadian economy is sensitive
to fluctuations in certain commodity prices.
Risk
of Investing in Chile
Risk
of Investing in Chile applies to the Global X Copper Miners ETF
Investment
in Chilean issuers involves risks that are specific to Chile, including, legal,
regulatory, political, environmental and economic risks. Chile’s economy is
export-dependent and relies heavily on trading relationships with certain key
trading partners, including China, Brazil, Japan, South Korea, the U.S.,
Argentina and Germany. Future changes in the price or the demand for Chilean
exported products by China, Brazil, Japan, South Korea, the U.S., Argentina and
Germany, changes in these countries’ economies, trade regulations or currency
exchange rates could adversely impact the Chilean economy and the issuers to
which the Fund has exposure.
Risk
of Investing in China
Risk
of Investing in China applies to the Global X Copper Miners ETF
The
Chinese economy is subject to a considerable degree of economic, political and
social instability.
Political
and Social Risk
The
Chinese government is authoritarian and has periodically used force to suppress
civil dissent. Disparities of wealth and the pace of economic liberalization may
lead to social turmoil, violence and labor unrest. In addition, China continues
to experience disagreements related to integration with Hong Kong and religious
and nationalist disputes in Tibet and Xinjiang. There is also a greater risk in
China than in many other countries of currency fluctuations, currency
nonconvertibility, interest rate fluctuations and higher rates of inflation as a
result of internal social unrest or conflicts with other countries.
Unanticipated political or social developments may result in sudden and
significant investment losses. China’s growing income inequality, rapidly aging
population and significant environmental issues also are factors that may affect
the Chinese economy. Concerns about the rising government and household debt
levels could impact the stability of the Chinese economy.
Heavy
Government Control and Regulation
The
Chinese government has implemented significant economic reforms in order to
liberalize trade policy, promote foreign investment in the economy, reduce
government control of the economy and develop market mechanisms. There can be no
assurance these reforms will continue or that they will be effective. Despite
recent reform and privatizations, government control over certain sectors or
enterprises and significant regulation of investment and industry is still
pervasive, including restrictions on investment in companies or industries
deemed to be sensitive to particular national interests, and the Chinese
government may restrict foreign ownership of Chinese corporations and/or the
repatriation of assets by foreign investors. Chinese companies that maintain
large amounts of sensitive data or produce some form of adverse social cost are
particularly at risk as the government moves forward with the Common Prosperity
agenda. Limitations or restrictions on foreign ownership of securities may have
adverse effects on the liquidity and performance of the Fund and could lead to
higher tracking error. Chinese government intervention in the market may have a
negative impact on market sentiment, which may in turn affect the performance of
the Chinese economy and the Fund’s investments. Chinese markets generally
continue to experience inefficiency, volatility and pricing anomalies that may
be connected to governmental influence, lack of publicly-available information,
and political and social instability.
Economic
Risk
The
Chinese economy has grown rapidly in the recent past and there is no assurance
that this growth rate will be maintained. In fact, the Chinese economy may
experience a significant slowdown as a result of, among other factors, a
deterioration in global demand for Chinese exports, a systemic failure in the
property sector, as well as contraction in spending on domestic goods by Chinese
consumers. In addition, China may experience substantial rates of inflation or
economic
recessions, which would have a negative effect on its economy and securities
market. Delays in enterprise restructuring, slow development of well-functioning
financial markets and widespread corruption have also hindered performance of
the Chinese economy. China continues to receive substantial pressure from
trading partners to liberalize official currency exchange rates.
Elevated
geopolitical tensions between China and its trading partners, including the
imposition of U.S. tariffs on certain Chinese goods, the imposition of trade and
non-trade related barriers for certain Chinese companies, and increased
international pressure related to Chinese trade policy, forced technology
transfers and intellectual property protections, may have a substantial impact
on the Chinese economy. The continuation or worsening of the current political
climate between China and the U.S. could result in additional regulatory
restrictions being contemplated or imposed on the U.S. or in China that could
impact the Fund’s ability to invest in certain companies. Reduction in spending
on Chinese products and services, institution of additional tariffs or other
trade barriers (including as a result of heightened trade tensions between China
and the U.S. or in response to actual or alleged Chinese cyber activity), or a
downturn in any of the economies of China’s key trading partners may have an
adverse impact on the Chinese economy and the Chinese issuers of securities in
which the Fund invests. For example, the U.S. has added certain foreign
technology companies to the U.S. Department of Commerce’s Bureau of Industry and
Security’s “Entity List,” which is a list of companies believed to pose a
national security risk to the U.S. U.S. investors may also be barred by U.S.
authorities from investing in certain companies, including those with ties to
the military, intelligence, and security services in China. Actions like these
may have unanticipated and disruptive effects on the Chinese economy. Any such
response that targets Chinese financial markets or securities exchanges could
interfere with orderly trading, delay settlement or cause market disruptions.
Public health crises or major health-related developments may have a substantial
impact on the Chinese economy or holdings in the Fund. Outbreaks of contagious
viruses and diseases, including the novel viruses commonly known as SARS, MERS,
and COVID-19 (Coronavirus), may reduce business activity or disrupt market
activity, and have the potential to exacerbate market risks such as volatility
in exchange rates or the trading of Chinese securities listed domestically or
abroad. Likewise, factories, ports, and critical infrastructure in China may
close to limit contagion risk. Additionally, China’s shift away from a
zero-COVID policy creates both opportunities and risks, causing uncertainty for
global economic growth. Foreign investors’ access to domestic markets may also
be limited during such health crises, especially if domestic exchanges are
closed for an extended period. Market closures could interfere with the orderly
trading or settlement mechanisms of Chinese securities listed domestically or
abroad. The Chinese economy or holdings in the Fund may also be adversely
impacted should health crises create political uncertainty or social unrest. The
implications of such health crises are difficult to ascertain but may put strain
on China’s supply chains, trading relationships, and international
relations.
Expropriation
Risk
The
Chinese government maintains a major role in economic policy making and
investing in China involves risk of loss due to expropriation, nationalization,
confiscation of assets and property or the imposition of restrictions on foreign
investments and on repatriation of capital invested.
Security
Risk
China
has strained international relations with Taiwan, India, Russia and other
neighbors due to territorial disputes, historical animosities, defense concerns
and other security concerns. Relations between China’s Han ethnic majority and
other ethnic groups in China, including Tibetans and Uighurs, are also strained
and have been marked by protests and violence. Additionally, China is alleged to
have participated in state-sponsored cyberattacks against foreign companies and
foreign governments. Actual and threatened responses to such activity, including
purchasing restrictions, sanctions, tariffs or cyberattacks on the Chinese
government or Chinese companies, may impact China’s economy and Chinese issuers
of securities in which the Fund invests. These situations may cause uncertainty
in the Chinese market and may adversely affect the Chinese economy. In addition,
conflict on the Korean Peninsula could adversely affect the Chinese economy.
Tax
Risk
China
has implemented a number of tax reforms in recent years and may amend or revise
its existing tax laws and/or procedures in the future, possibly with retroactive
effect. Changes in applicable Chinese tax law could reduce the after-tax profits
of the Fund, directly or indirectly, including by reducing the after-tax profits
of companies in China in which the Fund invests. Uncertainties in Chinese tax
rules could result in unexpected tax liabilities for the Fund.
Hong
Kong Political Risk
Hong
Kong reverted to Chinese sovereignty on July 1, 1997 as a Special Administrative
Region (SAR) of the People’s Republic of China under the principle of “one
country, two systems.” Although China is obligated to maintain the current
capitalist economic and social system of Hong Kong through June 30, 2047, the
continuation of economic and social freedoms enjoyed in Hong Kong is dependent
on the government of China. Since 1997, there have been tensions between the
Chinese government and many people in Hong Kong who perceive China as tightening
of control over Hong Kong’s semi-autonomous liberal political, economic, legal,
and social framework. Recent protests and unrest have increased tensions even
further. Due to the interconnected nature of the Hong Kong and Chinese
economies, this instability in Hong Kong may cause uncertainty in the Hong Kong
and Chinese markets. In addition, the Hong Kong dollar trades at a fixed
exchange rate in relation to (or, is “pegged” to) the U.S. dollar, which has
contributed to the growth and stability of the Hong Kong economy. However, it is
uncertain how long the currency peg will continue or what effect the
establishment of an alternative exchange rate system would have on the Hong Kong
economy. Because the Fund’s NAV is denominated in U.S. dollars, the
establishment of an alternative exchange rate system could result in a decline
in the Fund’s NAV.
Special
Risk Considerations of Investing in China – Variable Interest Entity
Investments
For
purposes of raising capital offshore on exchanges outside of China, including on
U.S. exchanges, many Chinese-based operating companies are structured as
Variable Interest Entities (“VIEs”). In this structure, the Chinese-based
operating company is the VIE and establishes a shell company in a foreign
jurisdiction, such as the Cayman Islands. The shell company lists on a foreign
exchange and enters into contractual arrangements with the VIE. This structure
allows Chinese companies in which the government restricts foreign ownership to
raise capital from foreign investors. While the shell company has no equity
ownership of the VIE, these contractual arrangements permit the shell company to
consolidate the VIE’s financial statements with its own for accounting purposes
and provide for economic exposure to the performance of the underlying Chinese
operating company. Therefore, an investor in the listed shell company, such as
the Fund, will have exposure to the Chinese-based operating company only through
contractual arrangements and has no ownership in the Chinese-based operating
company. Furthermore, because the shell company only has specific rights
provided for in these service agreements with the VIE, its abilities to control
the activities at the Chinese-based operating company are limited and the
operating company may engage in activities that negatively impact investment
value.
While
the VIE structure has been widely adopted, it is not formally recognized under
Chinese law and therefore there is a risk that the Chinese government could
prohibit the existence of such structures or negatively impact the VIE’s
contractual arrangements with the listed shell company by making them invalid.
If these contracts were found to be unenforceable under Chinese law, investors
in the listed shell company, such as the Fund, may suffer significant losses
with little or no recourse available. If the Chinese government determines that
the agreements establishing the VIE structures do not comply with Chinese law
and regulations, including those related to restrictions on foreign ownership,
it could subject a Chinese-based issuer to penalties, revocation of business and
operating licenses, or forfeiture of ownership interest. In addition, the listed
shell company’s control over a VIE may also be jeopardized if a natural person
who holds the equity interest in the VIE breaches the terms of the agreement, is
subject to legal proceedings or if any physical instruments for authenticating
documentation, such as chops and seals, are used without the Chinese-based
issuer’s authorization to enter into contractual arrangements in China. Chops
and seals, which are carved stamps used to sign documents, represent a legally
binding commitment by the company. Moreover, any future regulatory action may
prohibit the ability of the shell company to receive the economic benefits of
the Chinese-based operating company, which may cause the value of the Fund’s
investment in the listed shell company to suffer a significant loss. For
example, in 2021, the Chinese government prohibited use of the VIE structure for
investment in after-school tutoring companies. There is no guarantee that the
government will not place similar restrictions on other
industries.
Chinese equities that utilize the VIE structure to list in
the U.S. as ADRs face the risk of regulatory action from U.S. authorities,
including the risk of delisting. This will depend in part on whether U.S.
regulatory authorities are satisfied with their access to mainland China and
Hong Kong for the purpose of conducting inspections on the quality of audits for
these companies. Although the U.S. and China reached an agreement in September
2022 to grant the U.S. access for such inspections, there is no guarantee that
the agreement will be enforced or that U.S. regulatory authorities will continue
to feel satisfied with their access.
Risk
of Investing in Developed Markets
Risk
of Investing in Developed Markets applies to each Fund
Investment
in developed country issuers may subject the Fund to regulatory, political,
currency, security, and economic risk specific to developed countries. Developed
countries generally tend to rely on services sectors (e.g., the financial
services sector) as the primary means of economic growth. A prolonged slowdown
in, among others, services sectors is likely to have a negative impact on
economies of certain developed countries, although economies of individual
developed countries can be impacted by slowdowns in other sectors. In the past,
certain developed countries have been targets of terrorism, and some geographic
areas in which the Fund invests have experienced strained international
relations due to territorial disputes, historical animosities, defense concerns
and other security concerns. These situations may cause uncertainty in the
financial markets in these countries or geographic areas and may adversely
affect the performance of the issuers to which the Fund has exposure. Heavy
regulation of certain markets, including labor and product markets, may have an
adverse effect on certain issuers. Such regulations may negatively affect
economic growth or cause prolonged periods of recession. Many developed
countries are heavily indebted and face rising healthcare and retirement
expenses and may be underprepared for global health crises. For example, the
rapid and global spread of a highly contagious novel coronavirus respiratory
disease, designated COVID-19, resulted in extreme volatility in the financial
markets and severe losses; reduced liquidity of many instruments; restrictions
on international and, in some cases, local travel; significant disruptions to
business operations (including business closures); strained healthcare systems;
disruptions to supply chains, consumer demand and employee availability; and
widespread uncertainty regarding the duration and long-term effects of this
pandemic. In addition, price fluctuations of certain commodities and regulations
impacting the import of commodities may negatively affect developed country
economies.
Risk
of Investing in Egypt
Risk
of Investing in Egypt applies to the Global X Gold Explorers ETF
Investment
in securities of Egyptian issuers involves risks not typically associated with
investments in securities of issuers in more developed countries that may
negatively affect the value of the Fund. Such heightened risks include, among
others, the imposition of capital controls, expropriation and/or nationalization
of assets, confiscatory taxation, regional conflict, political instability,
including authoritarian and/or military involvement in governmental decision
making, armed conflict, the impact on the economy as a result of civil unrest
and social instability as a result of religious, ethnic and/or socioeconomic
unrest. Poor living standards, disparities of wealth and limitations on
political freedom have contributed to the unstable environment. Although there
has been increasing economic liberalization and limited political lateralization
in recent years, there is no guarantee that this trend will continue,
particularly if there is a political transition. Unanticipated or sudden
political or social developments may result in sudden and significant investment
losses. Issuers in Egypt are subject to less stringent requirements regarding
accounting, auditing, financial reporting and record keeping than are issuers in
more developed markets, and therefore, all material information may not be
available or reliable. These factors, among others, make investing in issuers
located or operating in Egypt significantly riskier than investing in issuers
located or operating in more developed countries, and any one of them could
cause a decline in the value of the Fund’s Shares.
In
November 2016, the International Monetary Fund approved a $12 billion loan to
help Egypt restore macroeconomic stability and promote inclusive growth. Later
in 2020, the International Monetary Fund extended a $2.7 billion loan to Egypt,
followed by a $3 billion standby arrangement in 2022. In addition, Egypt
introduced a series of economic reforms, including, among others, widening of
the tax base, increasing energy subsidiaries, and allowing the Egyptian pound to
float. While these measures are intended to foster Egypt’s economic growth and
development, there is no guarantee that they will continue or be successful. The
devaluation and flotation of the Egyptian currency, a measure taken by the
Egyptian government in order to qualify for the loan, has resulted in severe
inflation and risks of political backlash against the Egyptian
administration.
Egypt
entered into an investment treaty with the United States, designed to encourage
and protect U.S. investment in Egypt. However, there may be a risk of loss due
to expropriation and/or nationalization of assets, confiscation of assets and
property or the imposition of restrictions on foreign investments and on
repatriation of capital invested, particularly if the bilateral investment
treaty with the United States is not fully implemented or fails in its purpose.
Other diplomatic developments could adversely affect investments in Egypt,
particularly as Egypt is involved in negotiations for various regional
conflicts.
Egypt’s
economy is dependent on trade with certain key trading partners, including the
United States. Reduction in spending by these economies on Egyptian products and
services or negative changes in any of these economies may cause an adverse
impact on Egypt’s economy. The Egyptian economy is also heavily dependent on
tourism, export of
oil
and gas, and shipping services revenues from the Suez Canal. Tourism receipts
are vulnerable to terrorism, spillovers from conflicts in the region, and
potential political instability. Previous political unrest and incidents of
terrorist attacks have hurt tourism. As Egypt produces and exports oil and gas,
any acts of terrorism or armed conflict causing disruptions of oil and gas
exports could affect the Egyptian economy and, thus, adversely affect the
financial condition, results of operations or prospects of companies in which
the Fund may invest. Furthermore, any acts of terrorism or armed conflict in
Egypt or regionally could divert demand for the use of the Suez Canal, thereby
reducing revenues from the Suez Canal.
Risk
of Investing in Emerging Markets
Risk
of Investing in Emerging Markets applies to each Fund
The
securities markets of emerging market countries may be less liquid, subject to
greater price volatility, have smaller market capitalizations, have less
government regulation and not be subject to as extensive and frequent
accounting, financial and other reporting requirements as the securities markets
of more developed countries, as has historically been the case. Issuers and
securities markets in emerging markets are generally 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 developed markets. In particular, the assets and profits appearing on the
financial statements of emerging market issuers may not reflect their financial
position or results of operations in the same manner as financial statements for
developed market issuers. Substantially less information may be publicly
available about emerging market issuers than is available about issuers in
developed markets. It may be difficult or impossible for the Fund to pursue
claims against an emerging market issuer in the courts of an emerging market
country. There may be significant obstacles to obtaining information necessary
for investigations into or litigation against emerging market companies and
shareholders may have limited legal rights and remedies.
Emerging
markets are generally located in the Asia and Pacific regions, the Middle East,
Eastern Europe, Latin America, and Africa. Emerging markets typically are
classified as such by lacking one or more of the following characteristics:
sustainability of economic development, large and liquid securities markets,
openness to foreign ownership, ease of capital inflows and outflows, efficiency
of the market’s operational framework, and/or stability of the institutional
framework. The Fund’s purchase and sale of portfolio securities in certain
emerging market countries may be constrained by limitations relating to daily
changes in the prices of listed securities, periodic trading or settlement
volume and/or limitations on aggregate holdings of foreign investors. Such
limitations may be computed based on the aggregate trading volume by or holdings
of the Fund, the Adviser, its affiliates and their respective clients and other
service providers. The Fund may not be able to sell securities in circumstances
where price, trading or settlement volume limitations have been reached.
Foreign
investment in the securities markets of certain emerging market countries is
restricted or controlled to varying degrees, which may limit investment in such
countries or increase the administrative costs of such investments. For example,
certain Asian countries require government 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 issuer available for purchase by nationals. In addition,
certain countries may restrict or prohibit investment opportunities in issuers
or industries deemed important to national interests. Such restrictions may
affect the market price, liquidity and rights of securities that may be
purchased by the Fund. The repatriation of both investment income and capital
from certain emerging market countries is subject to restrictions, such as the
need for governmental consents. In situations where a country restricts direct
investment in securities (which may occur in certain Asian, Latin American and
other countries), the Fund may invest in such countries through other investment
funds in such countries. Certain emerging market countries may have privatized,
or have begun the process of privatizing, certain entities and industries.
Privatized entities may lose money or be re-nationalized.
Many
emerging market countries have experienced currency devaluations, substantial
(and, in some cases, extremely high) rates of inflation, and economic
recessions. These circumstances have had a negative effect on the economies and
securities markets of those emerging market countries. Economies in emerging
market countries generally are dependent upon commodity prices and international
trade and, accordingly, have been, and may continue to be, affected adversely by
the economies of their trading partners, trade barriers, exchange controls,
managed adjustments in relative currency values and other protectionist measures
imposed or negotiated by the countries with which they trade. As a result,
emerging market countries are particularly vulnerable to downturns of the world
economy.
Many
emerging market countries are subject to a substantial degree of economic,
political and social instability. Governments of some emerging market countries
are authoritarian in nature or have been installed or removed as a result of
military coups, while governments in other emerging market countries have
periodically used force to suppress civil dissent. Disparities of wealth, the
pace and success of democratization, and ethnic, religious and racial
disaffection, among other factors, have also led to social unrest, violence
and/or labor unrest in some emerging market countries. Many emerging market
countries have experienced strained international relations due to border
disputes, historical animosities or other defense concerns. These situations may
cause uncertainty in the markets and may adversely affect the performance of
these economies. Unanticipated political, social, and public health developments
may result in sudden and significant investment losses. Many emerging markets
may be underprepared for global health crises. For example, the rapid and global
spread of a highly contagious novel coronavirus respiratory disease, designated
COVID-19, has resulted in extreme volatility in the financial markets and severe
losses; reduced liquidity of many instruments; restrictions on international
and, in some cases, local travel; significant disruptions to business operations
(including business closures); strained healthcare systems; disruptions to
supply chains, consumer demand and employee availability; and widespread
uncertainty regarding the duration and long-term effects of this pandemic.
Investing in emerging market countries involves greater risk of loss due to
expropriation, nationalization, confiscation of assets and property or the
imposition of restrictions on foreign investments and on repatriation of capital
invested. As an example, in the past some Eastern European governments have
expropriated substantial amounts of private property, and many claims of the
property owners have never been fully settled. There is no assurance that
similar expropriations will not occur in other emerging market countries,
including China.
As
a result of heightened geopolitical tensions, various countries have imposed
economic sanctions, imposed non-trade barriers and renewed existing economic
sanctions on specific emerging markets and on issuers within those markets.
These non-trade barriers consist of prohibiting certain securities trades,
prohibiting certain private transactions in certain sectors and with respect to
certain companies, asset freezes, and prohibition of all business, against
certain individuals and companies. The United States and other nations or
international organizations may impose additional, broader economic sanctions or
take other actions that may adversely affect certain emerging markets in the
future. These actions, any future sanctions or other actions, or even the threat
of further sanctions or other actions, may negatively affect the value and
liquidity of the Fund’s investments. For example, the Fund may be prohibited
from investing in securities issued by companies subject to such sanctions. In
addition, sanctions may require the Fund to freeze its existing investments,
prohibiting the Fund from buying, selling or otherwise transacting in these
investments. Also, if an affected security is included in the 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 the Underlying Index. The
use of (or increased use of) a representative sampling strategy may increase the
Fund’s tracking error risk. Actions barring some or all transactions with a
specific company will likely have a substantial, negative impact on the value of
such company’s securities. These sanctions may also lead to changes in the
Fund’s Underlying Index. The 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 the 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. The Fund’s investment in
emerging market countries may also be subject to withholding or other taxes,
which may be significant and may reduce the return to the Fund from an
investment in such countries.
Settlement
and clearance procedures in emerging market countries are frequently less
developed and reliable than those in the United States and may involve the
Fund’s delivery of securities before receipt of payment for their sale. In
addition, significant delays may occur in certain markets in registering the
transfer of securities. Settlement, clearance or registration problems may make
it more difficult for the Fund to value its portfolio securities and could cause
the Fund to miss attractive investment opportunities, to have a portion of its
assets uninvested or to incur losses due to the failure of a counterparty to pay
for securities the Fund has delivered or the Fund’s inability to complete its
contractual obligations because of theft or other reasons. In addition, local
agents and depositories are subject to local standards of care that may not be
as rigorous as developed countries. Governments and other groups may also
require local agents to hold securities in depositories that are not subject to
independent verification. The less developed a country’s securities market, the
greater the risk to the Fund.
The
creditworthiness of the local securities firms used by the Fund in emerging
market countries may not be as sound as the creditworthiness of firms used in
more developed countries. As a result, the Fund may be subject to a greater risk
of loss if a securities firm defaults in the performance of its
responsibilities.
The
Fund’s use of foreign currency management techniques in emerging market
countries may be limited. Due to the limited market for these instruments in
emerging market countries, all or a significant portion of the Fund's currency
exposure in emerging market countries may not be covered by such instruments.
Rising
interest rates, combined with widening credit spreads, could negatively impact
the value of emerging market debt and increase funding costs for foreign
issuers. In such a scenario, foreign issuers might not be able to service their
debt obligations, the market for emerging market debt could suffer from reduced
liquidity, and the Fund could lose money.
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 the 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 the Fund, reserves the right to abstain from voting
proxies in those markets.
Risk
of Investing in Frontier and Standalone Markets
Risk
of Investing in Frontier and Standalone Markets applies to the Global X Uranium
ETF
Standalone
markets are those that do not meet the criteria for classification as frontier
markets or emerging markets. The index provider’s classification framework is
based on the three factors of economic development, size and liquidity, as well
as market accessibility. Standalone markets are classified as such due to severe
deficiencies in at least one of these three areas. Because standalone markets
often face highly unique circumstances that range from war to liquidity issues,
investors should carefully assess each market and determine the reason for
standalone classification prior to making any investment. In some cases,
standalone markets may be subject to significant sanctions by the international
community and may abruptly lose foreign investors as a result. Generally,
frontier markets are classified as such by having extremely limited size and/or
liquidity, limited access to foreign ownership, limitations on capital
inflows/outflows and/or limited efficiency of operational framework. Frontier
countries generally have smaller economies or less developed capital markets
than traditional emerging markets, and, as a result, the risks of investing in
emerging market countries are magnified in frontier countries. The economies of
frontier countries are less correlated to global economic cycles than those of
their more developed counterparts and their markets have low trading volumes and
the potential for extreme price volatility and illiquidity. This volatility may
be further heightened by the actions of a few major investors. For example, a
substantial increase or decrease in cash flows of mutual funds investing in
these markets could significantly affect local stock prices and, therefore, the
price of Fund Shares. These factors make investing in standalone and frontier
markets significantly riskier than in other countries and any one of them could
cause the price of the Fund’s Shares to decline.
Governments
of many frontier countries in which the Fund may invest may exercise substantial
influence over many aspects of the private sector. In some cases, the
governments of such frontier countries may own or control certain companies.
Accordingly, government actions could have a significant effect on economic
conditions in a frontier country and on market conditions, prices and yields of
securities in the Fund’s portfolio. Moreover, the economies of frontier
countries may be heavily dependent upon international trade and, accordingly,
have been and may continue to be, adversely affected by trade barriers, exchange
controls, managed adjustments in relative currency values and other
protectionist measures imposed or negotiated by the countries with which they
trade. These economies also have been and may continue to be adversely affected
by economic conditions in the countries with which they trade. Likewise, many
frontier markets may be underprepared for global health crises. For example, the
rapid and global spread of a highly contagious novel coronavirus respiratory
disease, designated COVID-19, has resulted in extreme volatility in the
financial markets and severe losses; reduced liquidity of many instruments;
restrictions on international and, in some cases, local travel; significant
disruptions to business operations (including business closures); strained
healthcare systems; disruptions to supply chains, consumer demand and employee
availability; and widespread uncertainty regarding the duration and long-term
effects of this pandemic.
Certain
foreign governments in countries in which the Fund may invest levy withholding
or other taxes on dividend and interest income. Although in some countries a
portion of these taxes are recoverable, the non-recovered portion of foreign
withholding taxes will reduce the income received from investments in such
countries.
From
time to time, certain of the companies in which the Fund may invest may operate
in, or have dealings with, countries subject to sanctions or embargoes imposed
by the U.S. government and the United Nations and/or countries identified by the
U.S. government as state sponsors of terrorism. A company may suffer damage to
its reputation if it is identified as a company which operates in, or has
dealings with, countries subject to sanctions or embargoes imposed by the U.S.
government and the United Nations and/or countries identified by the U.S.
government as state sponsors of terrorism. As an investor in such companies, the
Fund will be indirectly subject to those risks.
Investment
in equity securities of issuers operating in certain frontier countries is
restricted or controlled to varying degrees. These restrictions or controls may
at times limit or preclude foreign investment in equity securities of issuers
operating in certain frontier countries and increase the costs and expenses of
the Fund. Certain frontier countries require governmental approval prior to
investments by foreign persons, limit the amount of investment by foreign
persons in a particular issuer, limit the investment by foreign persons only to
a specific class of securities of an issuer that may have less advantageous
rights than the classes available for purchase by domiciliaries of the countries
and/or impose additional taxes on foreign investors. Certain frontier countries
may also restrict investment opportunities in issuers in industries deemed
important to national interests.
Frontier
countries may require governmental approval for the repatriation of investment
income, capital or the proceeds of sales of securities by foreign investors,
such as the Fund. In addition, if deterioration occurs in a frontier country’s
balance of payments, the country could impose temporary restrictions on foreign
capital remittances. The Fund could be adversely affected by delays in, or a
refusal to grant, any required governmental approval for repatriation of
capital, as well as by the application to the Fund of any restrictions on
investments. Investing in local markets in frontier countries may require the
Fund to adopt special procedures, or seek local government approvals or take
other actions, each of which may involve additional costs to the Fund.
Risk
of Investing in Indonesia
Risk
of Investing in Indonesia applies to the Global X Gold Explorers
ETF
Investment
in Indonesian issuers involves risks that are specific to Indonesia, including
legal, regulatory, political, security and economic risks. The securities
markets of Indonesia are underdeveloped and are often considered to be less
correlated to global economic cycles than those markets located in more
developed countries. As a result, securities markets in Indonesia are subject to
greater risks associated with market volatility, lower market capitalization,
lower trading volume, illiquidity, inflation, greater price fluctuations,
uncertainty regarding the existence of trading markets, governmental control and
heavy regulation of labor and industry. Moreover, trading on securities markets
may be suspended altogether. The government in Indonesia may restrict or control
to varying degrees the ability of foreign investors to invest in securities of
issuers located or operating in Indonesia. These restrictions and/or controls
may at times limit or prevent foreign investment in securities of issuers
located or operating in Indonesia. These factors, among others, make investing
in issuers located or operating in Indonesia significantly riskier than
investing in issuers located or operating in more developed countries, and any
one of them could cause a decline in the value of the Fund’s Shares. The value
of the Indonesian Rupiah may be subject to a high degree of fluctuation. The
Fund’s exposure to the Indonesian Rupiah and changes in value of the Indonesian
Rupiah versus the U.S. dollar may result in reduced returns for the Fund. The
Indonesian economy, among other things, is dependent upon external trade with
other economies, specifically China, Japan, Singapore and the United States. In
the past, Indonesia has experienced acts of terrorism, predominantly targeted at
foreigners. Such acts of terrorism have had a negative impact on tourism, an
important sector of the Indonesian economy.
Risk
of Investing in Kazakhstan
Risk
of Investing in Kazakhstan applies to the Global X Uranium ETF
Kazakhstan’s
economy is a resource-based economy that is heavily dependent on the export of
natural resources. Fluctuations in certain commodity markets or sustained low
prices for its exports could have a significant, adverse effect on Kazakhstan’s
economy.
Kazakhstan
is a presidential republic but maintains several authoritarian characteristics
including involvement in the economy. While Kazakhstan has recently pursued
economic reform and liberalization of many areas in the economy, there is no
guarantee that the government will not become directly involved in aspects of
the economy in the future. The constitutional reforms of 2022, such as the
addition of a limit of one seven year term for the President, are not guaranteed
to succeed and could be reversed in the future. Additionally, increasing
international and domestic tensions including changing strategic alliances or
calls for political reform could result in economic and social instability, or
war.
Due
to the recent rise in many commodities prices, one major concern for Kazakhstan
is managing inflationary pressures from strong foreign currency inflows.
Significant increases in inflation would have a negative impact on companies in
Kazakhstan and would have an adverse impact on the Fund.
Risk
of Investing in Mexico
Risk
of Investing in Mexico applies to the Global X Copper Miners ETF and Global X
Silver Miners ETF
Investment
in Mexican issuers involves risks that are specific to Mexico, including
regulatory, political, and economic risks. The Mexican economy is dependent upon
external trade with other economies, specifically with the United States and
certain Latin American countries. As a result, Mexico is dependent on, among
other factors, the U.S. economy and any change in the price or demand for
Mexican exports may have an adverse impact on the Mexican economy. For example,
lower oil prices have negatively impacted Petróleos Mexicanos, the Mexican
state-owned petroleum company, which accounts for a significant percentage of
the Mexican government’s tax revenue. Mexico has experienced adverse economic
impacts as a result of earthquakes and hurricanes, as well as outbreaks of
violence. Incidents involving Mexico’s security may have an adverse effect on
the Mexican economy and cause uncertainty in its financial markets. In the past,
Mexico has experienced high interest rates, economic volatility and high
unemployment rates.
Political
and Social Risk
Mexico
has been destabilized by local insurrections, social upheavals, drug related
violence, and the public health crisis related to the COVID-19 outbreak.
Recurrence of these or similar conditions may adversely impact the Mexican
economy. Mexican elections have been contentious and have been closely decided.
Changes in political parties or other Mexican political events may affect the
economy and cause instability.
Currency
Instability Risk
Historically,
Mexico has experienced substantial economic instability resulting from, among
other factors, periods of very high inflation and significant devaluations of
the Mexican currency, the peso.
Relations
with the United States
Political
developments in the U.S. have raised potential implications for the trade
arrangements between the U.S. and Mexico, which could negatively affect the
value of securities held by the Fund.
Risk
of Investing in Peru
Risk
of Investing in Peru applies to the Global X Silver Miners ETF
Peru
has historically experienced high rates of inflation and may continue to do so
in the future. An increase in prices for commodities, the depreciation of
Peruvian currency and potential future government measures seeking to maintain
the value of the currency in relation to other currencies, may trigger increases
in inflation in Peru and may also slow the rate of growth of its economy.
Elevated political instability may cause uncertainty in the Peruvian stock
market and in the stock markets of other countries in which the Fund invests
(such as Chile) and as a result, negatively impact issuers to which the Fund has
exposure. In addition, the market for Peruvian securities is directly influenced
by the flow of international capital and economic and market conditions of
certain countries, especially other emerging market countries in Central and
South America.
Risk
of Investing in Poland
Risk
of Investing in Poland applies to the Global X Copper Miners ETF
Poland’s
economy, among other things, is dependent upon the export of raw materials and
consumer goods. As a result, Poland is dependent on trading relationships with
certain key trading partners, including Germany and other European Union
countries. Poland’s economy, like most other economies in Eastern Europe,
remains relatively underdeveloped and can be particularly sensitive to political
and economic developments.
Risk
of Investing in South Korea
Risk
of Investing in South Korea applies to the Global X Silver Miners ETF and Global
X Uranium ETF
Investments
in South Korean issuers involve risks that are specific to South Korea,
including legal, regulatory, political, currency, security and economic risks.
Substantial political tensions exist between North Korea and South Korea.
Escalated tensions involving the two nations and the outbreak of hostilities
between the two nations, or even the threat of an outbreak of hostilities, could
have a severe adverse effect on the South Korean economy. In addition, South
Korea’s economic growth potential has recently been on a decline because of a
rapidly aging population and structural problems, among other factors. The South
Korean economy is heavily reliant on trading exports and disruptions or
decreases in trade activity could lead to further declines.
Risk
of Investing in Turkey
Risk
of Investing in Turkey applies to the Global X Gold Explorers ETF
The
Turkish economy has certain significant economic weaknesses, such as its
relatively high current account deficit, which it may finance by borrowing
through volatile, short-term instruments. The Turkish lira has experienced and
may continue to experience extreme currency volatility. With few of its own
natural resources, the Turkish economy is import-dependent. Turkey’s main import
partners include Russia, Germany, China, the U.S. and Italy. The Turkish economy
is dependent upon exports to other economies, specifically to Germany, other
European Union countries, the U.S. and Iraq. As a result, Turkey is dependent on
these economies and any change in the price or demand for Turkish exports may
have an adverse impact on the Turkish economy. In February 2023, a severe
earthquake struck central and southern Turkey, causing tens of thousands of
fatalities, the collapse of buildings and infrastructure, disruption of supply
chains, and other forms of immense economic damage. Turkey has experienced
strained relations with certain economic partners, including the U.S. and
certain European Union countries over geopolitical matters. Any economic
sanctions on Turkish individuals or Turkish corporate entities, or even the
threat of sanctions, may result in the decline of the value and liquidity of
Turkish securities, a weakening of the Turkish lira or other adverse
consequences to the Turkish economy. Turkey has historically experienced acts of
terrorism and strained relations related to border disputes with certain
neighboring countries.
The
continuation of the conflict on the Turkish-Syrian border, for example, could
have an adverse impact on the Turkish economy.
Turkey
has also experienced strained relations with other countries in the Middle East,
including Saudi Arabia, due to geopolitical events. Historically, Turkey’s
national politics have been unpredictable and subject to influence by the
military, and its government may be subject to sudden change. Disparities of
wealth, the pace and success of democratization and capital market development
and religious and racial disaffection have also led to social and political
unrest. Unanticipated or sudden political or social developments may result in
sudden and significant investment losses. Such situations may cause uncertainty
in the Turkish market and as a result adversely affect issuers to which the Fund
has exposure.
Geographic
Economic Exposure Risk
Geographic
Economic Exposure Risk applies to each Fund
The
constituents held by the Fund may have partners, suppliers and/or customers
located in various geographic regions, and the geographic regions in which Fund
constituents are located may have trading partners in other geographic regions.
As a result, an economic downturn in one or more of these regions may impact the
performance of the constituents in which the Fund invests, even if the Fund does
not invest directly in companies located in such region. The risks related to
such regions may include:
African
Economic Risk
The
economies of African countries are subject to risks not typically associated
with more developed economies, countries or geographic regions. Such heightened
risks include, among others, expropriation and/or nationalization of
assets,
restrictions on and government intervention in international trade, confiscatory
taxation, political instability, including authoritarian and/or military
involvement in governmental decision making, armed conflict, civil war, and
social instability as a result of religious, ethnic and/or socioeconomic unrest.
The
securities markets in Africa are underdeveloped and are often considered to be
less correlated to global economic cycles than markets located in more developed
countries or geographic regions. Securities markets in Africa are subject to
greater risks associated with market volatility, lower market capitalization,
lower trading volume, illiquidity, inflation, greater price fluctuations,
uncertainty regarding the existence of trading markets, governmental control and
heavy regulation of labor and industry. Moreover, trading on securities markets
may be suspended altogether.
Certain
governments in Africa may restrict or control to varying degrees the ability of
foreign investors to invest in securities of issuers located or operating in
those countries. These restrictions and/or controls may at times limit or
prevent foreign investment in securities of issuers located or operating in
countries in Africa. Moreover, certain countries in Africa may require
governmental approval or special licenses prior to investment by foreign
investors; may limit the amount of investment by foreign investors in a
particular industry and/or issuer; may limit such foreign investment to a
certain class of securities of an issuer that may have less advantageous rights
than the classes available for purchase by domestic investors of those
countries; and/or may impose additional taxes on foreign investors. These
factors, among others, make investing in issuers located or operating in
countries in Africa significantly riskier than investing in issuers located or
operating in more developed countries.
Asian
Economic Risk
Many
Asian economies have experienced rapid growth and industrialization in recent
years, but there is no assurance that this growth rate will be maintained. Other
Asian economies, however, have experienced high inflation, high unemployment,
currency devaluations and restrictions, and over-extension of credit.
Geopolitical hostility, political instability, as well as economic or
environmental events in any one Asian country may have a significant economic
effect on the entire Asian region, as well as on major trading partners outside
Asia. Any adverse event in the Asian markets may have a significant adverse
effect on some or all of the economies of the countries in which the Fund
invests. Many Asian countries are subject to political risk, including political
instability, corruption and regional conflict with neighboring countries. Hong
Kong is currently administered as a Special Administrative Region under the
sovereignty of the People’s Republic of China, but pro-independence sentiment
and political dissatisfaction towards China have resulted and may continue to
result in widespread protests. In 2020, China passed the National Security Law
in Hong Kong, which tightened political freedoms and heightens risk for any
businesses or individuals that express pro-independence views. North Korea and
South Korea each have substantial military capabilities, and historical tensions
between the two countries present the risk of war. Escalated tensions involving
the two countries and any outbreak of hostilities between the two countries, or
even the threat of an outbreak of hostilities, could have a severe adverse
effect on the entire Asian region. Maritime disputes in the South China Sea are
complex and involve conflicting claims by China, Brunei, Indonesia, Malaysia,
the Philippines, Taiwan and Vietnam, and there is a risk that these disputes
could escalate into armed conflict between any of the aforementioned countries.
Furthermore, there are numerous disputes over islands in East Asia that pose
security risks, including but not necessarily limited to the Liancourt Rocks
dispute between Japan and Korea, the Senkaku/Diaoyu Islands dispute between
China and Japan, and the Kuril Islands dispute between Japan and Russia.
Although Taiwan currently has a government that is separate from that of the
People’s Republic of China, the PRC lays claim to Taiwan and has enacted
legislation mandating military invasion should Taiwan’s government formally
declare independence. China may also choose to launch an invasion of Taiwan even
without the Taiwanese government formally declaring independence and there is a
high risk that such a conflict would draw in other actors such as the United
States and Japan. In response to the elevated risk of conflict in Taiwan, in
2022 the government of Japan moved to dramatically raise its defense budget and
lift longstanding restrictions on obtaining missiles with strike capabilities.
Certain Asian countries have also developed increasingly strained relationships
with the U.S., and if these relations were to worsen, they could adversely
affect Asian issuers that rely on the U.S. for trade. In addition, many Asian
countries are subject to social and labor risks associated with demands for
improved political, economic and social conditions.
Australasian
Economic Risk
The
economies of Australasia, which include Australia and New Zealand, are dependent
on exports from the agricultural and mining sectors. This makes Australasian
economies susceptible to fluctuations in the commodity markets. Australasian
economies are also increasingly dependent on their growing service industries.
Because the economies of Australasia are dependent on the economies of Asia,
Europe and the United States as key trading partners and investors, reduction in
spending by any of these trading partners on Australasian products and services,
or
negative
changes in any of these economies, may cause an adverse impact on some or all of
the Australasian economies.
European
Economic Risk
The
economies of Europe are highly dependent on each other, both as key trading
partners and, in many cases, as fellow members maintaining the euro. Decreasing
European imports, new trade regulations, changes in exchange rates, a recession
in Europe, or a slowing of economic growth in this region could have an adverse
impact on the securities in which the Fund invests. Reduction in trading
activity among European countries may cause an adverse impact on each nation’s
individual economies. The Economic and Monetary Union of the European Union (the
“EU”) requires compliance with restrictions on inflation rates, deficits,
interest rates, debt levels and fiscal and monetary controls, each of which may
significantly affect every country in Europe, including those countries that are
not members of the EU. Decreasing imports or exports, changes in governmental or
EU regulations on trade, changes in the exchange rate of the euro, the default
or threat of default by an EU member country on its sovereign debt, and
recessions in an EU member country may have a significant adverse effect on the
economies of EU member countries and their trading partners. The European
financial markets have historically experienced volatility and adverse trends
due to concerns about economic downturns or rising government debt levels in
several European countries, including, but not limited to, Austria, Belgium,
Cyprus, France, Greece, Ireland, Italy, Portugal, Spain and Ukraine. These
events have adversely affected the exchange rate of the euro and may continue to
significantly affect European countries.
Latin
American Economic Risk
High
interest rates, inflation, government defaults and unemployment rates are
characteristics of the economies in some Latin American countries. Currency
devaluations in any Latin American country can have a significant effect on the
entire region. Because commodities such as oil and gas, minerals and metals can
represent a significant percentage of the region’s exports, the economies of
Latin American countries may be particularly sensitive to fluctuations in
commodity prices. As a result, the economies in many Latin American countries
could experience significant volatility. Political stability is also a concern
in Latin America, with the risk of contested election results, military coups,
and mass social disorder presenting complex risks.
Middle
East Economic Risk
Middle
Eastern governments have exercised and continue to exercise substantial
influence over many aspects of the private sector. Many economies in the Middle
East are highly reliant on income from the sale of oil or trade with countries
involved in the sale of oil, and their economies are therefore vulnerable to
changes in the market for oil and foreign currency values. As global demand for
oil fluctuates, many Middle Eastern economies may be significantly impacted. A
sustained decrease in commodity prices could have a significant negative impact
on all aspects of the economy in the region. Middle Eastern economies may be
subject to acts of terrorism, political strife, religious, ethnic or
socioeconomic unrest and sudden outbreaks of hostilities with neighboring
countries. Certain Middle Eastern countries have strained relations with other
Middle Eastern countries due to territorial disputes, historical animosities,
international alliances, religious tensions or defense concerns, which may
adversely affect the economies of these countries. Certain Middle Eastern
countries experience significant unemployment, as well as widespread
underemployment. Many Middle Eastern countries have little or no democratic
tradition. Many Middle Eastern countries periodically have experienced
political, economic and social unrest as protestors have called for widespread
reform. Some of these protests have resulted in a governmental regime change,
internal conflict or civil war. If further regime changes were to occur,
internal conflict were to intensify, or a civil war were to continue in any of
these countries, such instability could adversely affect the economies of Middle
Eastern countries.
North
American Economic Risk
A
decrease in imports or exports, changes in trade regulations or an economic
recession in any North American country can have a significant economic effect
on the entire North American region and on some or all of the North American
countries to which the Fund has economic exposure. The U.S. is Canada's and
Mexico's largest trading and investment partner. The Canadian and Mexican
economies are significantly affected by developments in the U.S. economy. Since
the implementation of the North American Free Trade Agreement (“NAFTA”) in 1994
among Canada, the U.S. and Mexico, total merchandise trade among the three
countries has increased. However, political developments in the U.S., including
the renegotiation of NAFTA and imposition of tariffs by the U.S., may have
implications for the trade arrangements among the U.S., Mexico and Canada, which
could negatively affect the value
of
securities held by the Fund. Policy and legislative changes in any of the three
countries may have a significant effect on North American economies generally,
as well as on the value of certain securities held by the Fund.
International
Closed Market Trading Risk
International
Closed Market Trading Risk applies to each Fund
To
the extent that the underlying investments held by the Fund trade on foreign
exchanges that may be closed when the securities exchange on which the Fund’s
Shares trade is open, there are likely to be deviations between the current
price of such an underlying security and the last quoted price for the
underlying security (i.e., the Fund’s quote from the closed foreign market).
These deviations could result in premiums or discounts to the Fund’s NAV that
may be greater than those experienced by other ETFs.
Investable
Universe of Companies Risk
Investable
Universe of Companies Risk applies to each Fund
The
investable universe of companies in which the Fund may invest may be limited. If
a company no longer meets the Index Provider’s criteria for inclusion in the
Underlying Index, the Fund may need to reduce or eliminate its holdings in that
company. The reduction or elimination of the Fund’s holdings in the company may
have an adverse impact on the liquidity of the Fund’s overall portfolio holdings
and on Fund performance.
Issuer
Risk
Issuer
Risk applies to each Fund
Issuer
risk is the risk that any of the individual companies that the Fund invests in
may perform badly, causing the value of its securities to decline. Poor
performance may be caused by poor management decisions, competitive pressures,
changes in technology, disruptions in supply, labor problems or shortages,
corporate restructurings, fraudulent disclosures or other factors. Issuers may,
in times of distress or on their own discretion, decide to reduce or eliminate
dividends, which would also cause their stock prices to decline.
Market
Risk
Market
Risk applies to each Fund
Market
risk is the risk that the value of the securities in which the Fund invests may
go up or down in response to the prospects of individual issuers and/or general
economic conditions. Turbulence in the financial markets and reduced liquidity
may negatively affect issuers, which could have an adverse effect on the Fund.
If the securities held by the Fund experience poor liquidity, the Fund may be
unable to transact at advantageous times or prices, which may decrease the
Fund’s returns. In addition, there is a risk that policy changes by central
governments and governmental agencies, including the Federal Reserve or the
European Central Bank, which could include increasing interest rates, could
cause increased volatility in financial markets and lead to higher levels of
Fund redemptions from Authorized Participants, which could have a negative
impact on the Fund. Furthermore, local, regional or global events such as war,
acts of terrorism, the spread of infectious illness or other public health
issues, recessions, raising of interest rates, or other events could have a
significant impact on the Fund and its investments and trading of its Shares.
This increases the risk that monetary policy may provide less support should
economic growth slow. Additionally, China’s shift away from their zero-COVID
policy creates both opportunities and risks, establishing China as the wildcard
for global economic growth. Market risk factors may result in increased
volatility and/or decreased liquidity in the securities markets. The Fund’s NAV
could decline over short periods due to short-term market movements and over
longer periods during market downturns.
Non-Diversification
Risk
Non-Diversification
Risk applies to the Global X Copper Miners ETF, Global X Silver Miners ETF and
Global X Uranium ETF
The
Fund is classified as a “non-diversified” investment company under the 1940 Act.
This means that the Fund may invest most of its assets in securities issued by
or representing a small number of companies. As a result, the Fund may be more
susceptible to the risks associated with these particular companies, or to a
single economic, political or regulatory occurrence affecting these companies.
Operational
Risk
Operational
Risk applies to each Fund
The
Fund is exposed to operational risk arising from a number of factors, including
but not limited to human error, processing and communication errors, errors of
the Fund's service providers, counterparties or other third-parties, failed or
inadequate processes and technology or systems failures.
With
the increased use of technologies such as the internet to conduct business, the
Fund, Authorized Participants, service providers and the relevant listing
exchange are susceptible to operational, information security and related
“cyber” risks both directly and through their service providers. Similar types
of cyber security risks are also present for issuers of securities in which the
Fund invests, which could result in material adverse consequences for such
issuers and may cause the Fund’s investment in such portfolio companies to lose
value. Unlike many other types of risks faced by the Fund, these risks typically
are not covered by insurance. In general, cyber incidents can result from
deliberate attacks or unintentional events. Cyber incidents 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).
Recently, geopolitical tensions may have increased the scale and sophistication
of deliberate attacks, particularly those from nation-states or from entities
with nation-state backing. Cyber security failures by or breaches of the systems
of the Adviser and the Fund’s distributor and other service providers
(including, but not limited to, the Index Provider, fund accountants,
custodians, transfer agents and administrators), market makers, Authorized
Participants, or the issuers of securities in which the Fund invests, have the
ability to cause disruptions and impact business operations, potentially
resulting in: financial losses, interference with the Fund’s ability to
calculate its NAV, disclosure of confidential trading information, impediments
to trading, submission of erroneous trades or erroneous creation or redemption
orders, the inability of the Fund or its service providers 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, cyber-attacks may render records of Fund assets
and transactions, shareholder ownership of Fund Shares, and other data integral
to the functioning of the Fund inaccessible or inaccurate or incomplete.
Substantial costs may be incurred by the Fund in order to resolve or prevent
cyber incidents in the future. While the Fund has 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 and that
prevention and remediation efforts will not be successful. Furthermore, the Fund
cannot control the cyber security plans and systems put in place by service
providers to the Fund, issuers in which the Fund invests, the Index
Provider, market makers or Authorized Participants. The Fund and its
shareholders could be negatively impacted as a result.
The
Fund and the Adviser seek to reduce these operational risks through controls and
procedures. However, these measures do not address every possible risk and may
be inadequate for those risks that they are intended to address.
Passive
Investment Risk
Passive
Investment Risk applies to each Fund
The
Fund is not actively managed and may be affected by a general decline in market
segments relating to the Underlying Index. The Fund invests in securities
included in, or representative of, the Underlying Index regardless of their
investment merits, and the Adviser does not otherwise attempt to take defensive
positions in declining markets. Unlike many investment companies, the Fund does
not seek to outperform its Underlying Index. Therefore, the Fund would not
necessarily buy or sell a security unless that security is added or removed,
respectively, from the Underlying Index, even if that security generally is
underperforming. Additionally, if a constituent of the Underlying Index were
removed, even outside of a regular rebalance of the Underlying Index, the
Adviser anticipates that the Fund would sell such security. Maintaining
investments in securities regardless of market conditions or the performance of
individual securities could cause the Fund’s return to be lower than if the Fund
employed an active strategy.
Index-Related
Risk
There
is no guarantee that the Fund will achieve a high degree of correlation to the
Underlying Index and therefore achieve its investment objective. Market
disruptions and regulatory restrictions could have an adverse effect on the
Fund’s ability to adjust its exposure to the required levels in order to track
the Underlying Index. Errors in index data, index computations and/or the
construction of the Underlying Index in accordance with its methodology may
occur
from
time to time and may not be identified and corrected by the Index Provider for a
period of time or at all, which may have an adverse impact on the Fund and its
shareholders.
Management
Risk
The
Fund may not fully replicate its Underlying Index and may hold securities not
included in its Underlying Index. Therefore, the Fund is subject to management
risk. That is, the Adviser’s investment strategy, the implementation of which is
subject to a number of constraints, may cause the Fund to underperform the
market or its relevant benchmark or adversely affect the ability of the Fund to
achieve its investment objective. While the Fund is passively managed,
implementation of the Fund’s principal investment strategy may result in
tracking error risk, which is described below. The ability of the Adviser to
successfully implement the Fund’s investment strategies will influence the
Fund’s performance significantly.
Tracking
Error Risk
Tracking
error is the divergence of the Fund's performance from that of the Underlying
Index. Tracking error may occur because of differences between the securities
and other instruments held in the Fund's portfolio and those included in the
Underlying Index, pricing differences (including differences between a
security's price at the local market close and the Fund's valuation of a
security at the time of calculation of the Fund's NAV), transaction costs
incurred by the Fund, the Fund's holding of uninvested cash, differences in
timing of the accrual of or the valuation of dividends or interest, tax gains or
losses, changes to the Underlying Index or the costs to the Fund of complying
with various new or existing regulatory requirements. This risk may be
heightened during times of increased market volatility or other unusual market
conditions. Tracking error also may result because the Fund incurs fees and
expenses, while the Underlying Index does not. ETFs that track indices with
significant weight in emerging markets issuers may experience higher tracking
error than other ETFs that do not track such indices.
Risks
Associated with Exchange-Traded Funds
Risks
Associated with Exchange-Traded Funds applies to each Fund
As
an ETF, the Fund is subject to the following risks:
Authorized
Participants Concentration Risk
The
Fund has a limited number of financial institutions that may act as Authorized
Participants. Only Authorized Participants who have entered into agreements with
the Fund's distributor may engage in creation or redemption transactions
directly with the Fund, and none of those Authorized Participants is obligated
to engage in creation and/or redemption transactions. To the extent that those
Authorized Participants exit the business or are unable to process creation
and/or redemption orders, such as in times of market stress, and no other
Authorized Participant is able to step forward to create and redeem in either of
those cases, Shares may trade like closed-end fund shares at a discount to NAV
and/or at wider intraday bid-ask spreads, and may possibly face trading halts
and/or delisting from the Exchange.
Large
Shareholder Risk
Certain
shareholders, including an Authorized Participant, the Adviser or an affiliate
of the Adviser, may own a substantial amount of the Fund’s Shares. Additionally,
from time to time an Authorized Participant, a third-party investor, the
Adviser, or an affiliate of the Adviser may invest in the Fund and hold its
investment for a specific period of time in order to facilitate commencement of
the Fund’s operations or to allow the Fund to achieve size or scale.
Redemptions by large shareholders could have a significant negative impact on
the Fund. If a large shareholder were to redeem all, or a large portion, of its
Shares, there is no guarantee that the Fund will be able to maintain sufficient
assets to continue operations in which case the Board of Trustees may determine
to liquidate the Fund. In addition, transactions by large shareholders may
account for a large percentage of the trading volume on the Exchange and may,
therefore, have a material upward or downward effect on the market price of the
Shares.
Listing
Standards Risk
The
Fund is required to comply with listing requirements adopted by the listing
exchange. Non-compliance with such requirements may result in the Fund's Shares
being delisted by the listing exchange. Any resulting liquidation of the
Fund
could cause the Fund to incur elevated transaction costs and could result in
negative tax consequences for its shareholders.
Market
Trading Risks and Premium/Discount Risks
Absence
of Active Market
Although
Shares of the Fund are or will be listed for trading on a U.S. exchange and may
be listed on certain foreign exchanges, there can be no assurance that an active
trading market for the Shares will develop or be maintained.
Risks
of Secondary Listings
The
Fund's Shares may be listed or traded on U.S. and non-U.S. exchanges other than
the U.S. exchange where the Fund’s primary listing is maintained. There can be
no assurance that the Fund’s Shares will continue to trade on any such exchange
or in any market or that the Fund's Shares will continue to meet the
requirements for listing or trading on any exchange or in any market. The Fund's
Shares may be less actively traded in certain markets than others, and investors
are subject to the execution and settlement risks and market standards of the
market where they or their brokers direct their trades for execution. Certain
information available to investors who trade Shares on a U.S. exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.
Secondary
Market Trading Risk
Only
Authorized Participants who have entered into agreements with the Fund's
distributor may engage in creation or redemption transactions directly with the
Fund. Shares of the Fund may trade in the secondary market on days when the Fund
does not accept orders to purchase or redeem Shares from Authorized
Participants. On such days, Shares may trade in the secondary market with more
significant premiums or discounts than might be experienced on days when the
Fund accepts purchase and redemption orders.
Secondary
market trading in Fund Shares may be halted by a stock exchange because of
market conditions or other reasons. In addition, trading in Fund Shares on a
stock exchange or in any market may be subject to trading halts caused by
extraordinary market volatility pursuant to "circuit breaker" rules on the stock
exchange or market. There can be no assurance that the requirements necessary to
maintain the listing or trading of Fund Shares will continue to be met or will
remain unchanged.
Shares
of the Fund May Trade at Prices Other Than NAV
Shares
of the Fund may trade at, above or below NAV. The per share NAV of the Fund will
fluctuate with changes in the market value of the Fund’s holdings. The trading
prices of Shares will fluctuate in accordance with changes in the Fund's NAV as
well as market supply and demand. The trading prices of the Fund's Shares may
deviate significantly from NAV during periods of market volatility or when the
Fund has relatively few assets or experiences a lower trading volume. In
stressed market conditions, the market for the Shares may become less liquid in
response to the deteriorating liquidity of the Fund’s portfolio. Any of these
factors may lead to the Fund's Shares trading at a premium or discount to NAV.
While the creation/redemption feature is designed to make it likely that Shares
normally will trade close to the Fund’s NAV, market prices are not expected to
correlate exactly with the Fund's NAV due to timing reasons as well as market
supply and demand factors. In addition, disruptions to creations and redemptions
or the existence of extreme market volatility may result in trading prices that
differ significantly from NAV. If a shareholder purchases at a time when the
market price is at a premium to the NAV or sells at a time when the market price
is at a discount to the NAV, the shareholder may sustain losses.
Since
foreign exchanges may be open on days when the Fund does not price Shares, the
value of the securities in the Fund’s portfolio may change on days when
shareholders will not be able to purchase or sell Shares.
Costs
of Buying or Selling Fund Shares
Buying
or selling Fund Shares involves two types of costs that apply to all securities
transactions. When buying or selling Shares of the Fund through a broker, you
will likely incur a brokerage commission or other charges imposed by brokers as
determined by that broker. In addition, you may incur the cost of the "spread" -
that is, the difference between what professional investors are willing to pay
for Fund Shares (the "bid" price) and the market price at which
they
are willing to sell Fund Shares (the "ask" price). Because of the costs inherent
in buying or selling Fund Shares, frequent trading may detract significantly
from investment results and an investment in Fund Shares may not be advisable
for investors who anticipate regularly making small investments.
Securities
Lending Risk
Securities
Lending Risk applies to each Fund
The
Fund may engage in lending its portfolio securities. The Fund may lend its
portfolio securities to the extent noted in the section of the Fund's summary
prospectus titled Principal Investment Strategies. In connection with such
loans, the Fund receives liquid collateral equal to at least 102% of the value
of domestic equity securities and ADRs and 105% of the value of the foreign
equity securities (other than ADRs) being lent. This collateral is
marked-to-market on a daily basis. Although the Fund will receive collateral in
connection with all loans of its securities holdings, the Fund would be exposed
to a risk of loss should a borrower default on its obligation to return the
borrowed securities (e.g., the loaned securities may have appreciated beyond the
value of the collateral held by the Fund). In addition, the Fund will bear the
risk of loss of any cash collateral that it invests. Also, as securities on loan
may not be voted by the Fund, there is a risk that the Fund may not be able to
recall the securities in sufficient time to vote on material proxy matters.
Tax
Status Risk
Tax
Status Risk applies to each Fund
The
Fund intends to pay dividends each taxable year to enable it to continue to
satisfy the distribution requirements necessary to qualify for treatment as a
regulated investment company ("RIC"). Under the Internal Revenue Code of 1986,
as amended (the "Code"), the Fund may not earn more than 10% of its annual gross
income from gains resulting from selling precious metals and other commodities.
This could make it more difficult for the Fund to qualify as a RIC. If a
portfolio were to distribute to its shareholders less than the minimum amount
required for any year, the Fund would become subject to federal income tax for
that year on all of its taxable income and recognized gains, even those
distributed to its shareholders. In lieu of potential disqualification as a RIC,
the Fund is permitted to pay a tax for certain failures to satisfy this income
requirement, which, in general, are limited to those due to reasonable cause and
not willful neglect.
Trading
Halt Risk
Trading
Halt Risk applies to each Fund
An
exchange or market may close or issue trading halts on specific securities, or
the ability to buy or sell certain securities or financial instruments may be
restricted, which may result in the Fund being unable to buy or sell certain
securities or financial instruments. In such circumstances, the Fund may be
unable to rebalance its portfolio, may be unable to accurately price its
investments and/or may incur substantial trading losses.
Valuation
Risk
Valuation
Risk applies to each Fund
The
sales price the Fund could receive for a security may differ from the Fund’s
valuation of the security and may differ from the value used by the Underlying
Index, particularly for securities that trade in low value or volatile markets
or that are valued using a fair value methodology (such as during trading
halts). Because non-U.S. exchanges may be open on days when the Fund does not
price its Shares, the value of the securities in the Fund's portfolio may change
on days when shareholders will not be able to purchase or sell the Fund's
Shares.
A
FURTHER DISCUSSION OF OTHER RISKS
Each
Fund may also be subject to certain other risks associated with its investments
and investment strategies.
Exclusion
from the Definition of a Commodity Pool Operator Risk
With
respect to the Fund, the Adviser has claimed an exclusion from the definition of
“commodity pool operator” (“CPO”) under the Commodity Exchange Act, as amended
(“CEA”), and the rules of the Commodity Futures Trading Commission
(“CFTC”)
and, therefore, is not subject to CFTC registration or regulation as a CPO. In
addition, the Adviser is relying upon a related exclusion from the definition of
“commodity trading advisor” (“CTA”) under the CEA and the rules of the CFTC. The
terms of the CPO exclusion require the Fund, among other things, to adhere to
certain limits on its investments in “commodity interests.” Commodity interests
include commodity futures, commodity options and swaps. Because the Adviser and
the Fund intend to comply with the terms of the CPO exclusion, the Fund may, in
the future, need to adjust its investment strategies, consistent with its
investment objective, to limit its investments in these types of instruments.
The Fund is not intended as a vehicle for trading in the commodity futures,
commodity options or swaps markets. The CFTC has neither reviewed nor approved
the Adviser’s reliance on these exclusions, or the Fund, its investment
strategies or this Prospectus.
Leverage
Risk
Under
the 1940 Act, the Fund is permitted to borrow from a bank up to 33 1/3% of its
net assets for short term or emergency purposes. The Fund may borrow money at
fiscal quarter end to maintain the required level of diversification to qualify
as a regulated investment company ("RIC") for purposes of the Internal Revenue
Code of 1986, as amended (the "Code"). As a result, the 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
Fund. If the value of the Fund's assets increases, then leveraging would cause
the Fund's NAV to increase more sharply than it would have had the Fund not
leveraged. Conversely, if the value of the Fund's assets decreases, leveraging
would cause the Fund's NAV to decline more sharply than it otherwise would have
had the Fund not leveraged. The Fund may incur additional expenses in connection
with borrowings.
Qualification
as a Regulated Investment Company Risk
The
Fund must meet a number of diversification requirements to qualify as a RIC
under Section 851 of the Code and, if qualified, to continue to qualify. If the
Fund experiences difficulty in meeting those requirements for any fiscal
quarter, it might enter into borrowings in order to increase the portion of the
Fund’s total assets represented by cash, cash items, and U.S. government
securities shortly thereafter and, as of the close of the following fiscal
quarter, to attempt to meet the requirements. However, the Fund may incur
additional expenses in connection with any such borrowings, and increased
investments by the Fund in cash, cash items, and U.S. government securities
(whether the Fund makes such investments from borrowings) are likely to reduce
the Fund’s return to investors.
Tax
Treaty Reclaims Uncertainty
When
the Fund receives dividend and interest income (if any) from issuers in certain
countries, such distributions may be subject to partial withholding by local tax
authorities in order to satisfy potential local tax obligations. The Fund may
file claims to recover such withholding tax in jurisdictions where withholding
tax reclaim is possible, which may be the case as a result of bilateral treaties
between the United States and local governments. Whether or when the Fund will
receive a withholding tax refund in the future is within the control of the tax
authorities in such countries. Where the Fund expects to recover withholding tax
based on a continuous assessment of probability of recovery, the NAV of the Fund
generally includes accruals for such tax refunds. The Fund continues to evaluate
tax developments for potential impact to the probability of recovery. If the
likelihood of receiving refunds materially decreases, for example due to a
change in tax regulation or approach, accruals in the Fund’s NAV for such
refunds may need to be written down partially or in full, which will adversely
affect that Fund’s NAV. Investors in the Fund at the time an accrual is written
down will bear the impact of any resulting reduction in NAV regardless of
whether they were investors during the accrual period. Conversely, if the Fund
receives a tax refund that has not been previously accrued, investors in the
Fund at the time the claim is successful will benefit from any resulting
increase in the Fund’s NAV. Investors who sold their shares prior to such time
will not benefit from such NAV increase.
PORTFOLIO
HOLDINGS INFORMATION
A
description of the policies and procedures of Global X Funds®
(the "Trust") with respect to the disclosure of the Funds’ portfolio securities
is available in the Funds’ combined Statement of Additional Information (“SAI”).
The top holdings of each Fund and Fund Fact Sheets providing information
regarding each Fund’s top holdings can be found at
www.globalxetfs.com/explore/(click on the name of your Fund) and may be
requested by calling 1-888-493-8631.
FUND
MANAGEMENT
Investment
Adviser
Global
X Management Company LLC (the "Adviser") serves as the investment adviser and
the administrator for the Funds. Subject to the supervision of the Trust's Board
of Trustees, the Adviser is responsible for managing the investment activities
of the Funds and the Funds' business affairs and other administrative matters.
The Adviser has been a registered investment adviser since 2008. The Adviser is
a Delaware limited liability company with its principal offices located at 605
3rd Avenue, 43rd Floor, New York, New York 10158. As of February 1, 2024,
the Adviser provided investment advisory services for assets of approximately
$44 billion.
Pursuant
to a Supervision and Administration Agreement and subject to the general
supervision of the Board of Trustees, the Adviser provides, or causes to be
furnished, all supervisory, administrative and other services reasonably
necessary for the operation of the Funds and also bears the costs of various
third-party services required by the Funds, including audit, certain custody,
portfolio accounting, legal, transfer agency and printing costs. The Supervision
and Administration Agreement also requires the Adviser to provide investment
advisory services to the Funds pursuant to an Investment Advisory Agreement.
Each
Fund pays the Adviser a fee (“Management Fee”) in return for providing
investment advisory, supervisory and administrative services under an all-in fee
structure. For the fiscal year ended October 31, 2023, the Funds paid a monthly
Management Fee to the Adviser at the following annual rates (stated as a
percentage of the average daily net assets of each Fund taken separately):
|
|
|
|
| |
Fund |
Management
Fee |
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% |
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). The Adviser may earn a profit on the
Management Fee paid by the Funds. Also, the Adviser, and not the shareholders of
the Funds, would benefit from any price decreases in third-party services,
including decreases resulting from an increase in net assets.
The
Adviser or its affiliates may pay compensation, out of profits derived from the
Adviser’s Management Fee or other resources and not as an additional charge to
the Funds, to certain financial institutions (which may include banks,
securities dealers and other industry professionals) for the sale and/or
distribution of Fund Shares or the retention and/or servicing of Fund investors
and Fund Shares (“revenue sharing”). These payments are in addition to any other
fees described in the fee table or elsewhere in the Prospectus or SAI. Examples
of “revenue sharing” payments include, but are not limited to, payments to
financial institutions for “shelf space” or access to a third party platform or
fund offering list or other marketing programs, including, but not limited to,
inclusion of the Funds on preferred or recommended sales lists, mutual fund
“supermarket” platforms and other formal sales programs; granting the Adviser
access to the financial institution’s sales force; granting the Adviser access
to the financial institution’s conferences and meetings; assistance in training
and educating the financial institution’s personnel; and obtaining other forms
of marketing support. The level of revenue sharing payments made to financial
institutions may be a fixed fee or based upon one or more of the following
factors: gross sales, current assets and/or number of accounts of a Fund
attributable to the financial institution, or other factors as agreed to by the
Adviser and the financial institution or any combination thereof. The amount of
these revenue sharing payments is determined at the discretion of the Adviser
from time to time, may be substantial, and may be different for different
financial institutions depending upon the services provided by the financial
institution. Such payments may provide an incentive for the financial
institution to make Shares of the Funds available to its customers and may allow
the Funds greater access to the financial institution’s customers.
Approval
of Advisory Agreement
Discussions
regarding the basis for the Board of Trustees' approval of the Supervision and
Administration Agreement and the related Investment Advisory Agreement for each
Fund are available in the Funds' Semi-Annual Report to Shareholders for the
fiscal half-year ended April 30 and/or Annual Report to Shareholders for the
fiscal year ended October 31.
Portfolio
Management
The
Portfolio Managers who are currently responsible for the day-to-day management
of each Fund's portfolio are Nam To, Wayne Xie, Vanessa Yang and Sandy Lu.
Nam
To:
Nam To, CFA, Portfolio Manager, joined the Adviser in July 2017. Prior to that,
Mr. To was a Global Economics Research Analyst at Bunge Limited from 2014 to
2017. Mr. To received his Bachelor of Arts in Philosophy and Economics from
Cornell University in 2014.
Wayne
Xie:
Wayne Xie, Head of Portfolio Management, joined the Adviser in July 2018 as a
Portfolio Management Associate. Previously, Mr. Xie was an Analyst at VanEck
Associates on the Equity ETF Investment Management team from 2010 to 2018 and a
Portfolio Administrator at VanEck Associates from 2007 to 2010. Mr. Xie received
his Bachelor of Science from the State University of New York at Buffalo in
2002.
Vanessa
Yang:
Vanessa Yang, Portfolio Manager, joined the Adviser in 2016 as a Portfolio
Administrator. She was appointed to the portfolio management team in June 2019.
Previously, Ms. Yang was a Portfolio Administrator at VanEck Associates from
2011 to 2014. Ms. Yang received her MS in Financial Engineering from Drucker
School of Management in 2010 and her BS in Economics from Guangdong University
of Foreign Studies in 2008.
Sandy
Lu:
Sandy Lu, CFA, Portfolio Manager, joined the Adviser in September 2021.
Previously, Mr. Lu was a Portfolio Analyst and Junior Portfolio Manager at PGIM
Fixed Income from 2014 to 2021, and a Fixed Income Portfolio Analyst at Lincoln
Financial Group from 2010 to 2014. Mr. Lu received his Bachelor of Science in
Economics from the Wharton School of the University of Pennsylvania. He earned
his CFA designation in September 2015, and holds the Series 3
license.
The
SAI provides additional information about the Portfolio Managers’ compensation
structure, other accounts managed by the Portfolio Managers, and the Portfolio
Managers' ownership of Shares of the Funds.
DISTRIBUTOR
SEI
Investments Distribution Co. ("Distributor") distributes Creation Units for the
Funds on an agency basis. The Distributor does not maintain a secondary market
in Shares. The Distributor has no role in determining the policies of the Funds
or the securities that are purchased or sold by each Fund. The Distributor’s
principal address is One Freedom Valley Drive, Oaks, PA 19456. The Distributor
is not affiliated with the Adviser.
BUYING
AND SELLING FUND SHARES
Shares
of the Funds trade on a national securities exchange and in the secondary market
during the trading day. Shares can be bought and sold throughout the trading day
like other shares of publicly-traded securities. There is no minimum investment
for purchases made on a national securities exchange. When buying or selling
Shares through a broker, you will incur customary brokerage commissions and
charges. In addition, you will also incur the cost of the “spread,” which is the
difference between what professional investors are willing to pay for Shares
(the “bid” price) and the price at which they are willing to sell Shares (the
“ask” price). The commission is frequently a fixed amount and may be a
significant proportional cost for investors seeking to buy or sell small amounts
of Shares. The spread with respect to Shares varies over time based on a Fund’s
trading volume and market liquidity and is generally lower if a Fund has
significant trading volume and market liquidity and higher if a Fund has little
trading volume and market liquidity. Because of the costs of buying and selling
Shares, frequent trading may reduce investment returns.
Shares
of a Fund may be acquired or redeemed directly from the Fund only by Authorized
Participants (as defined in the SAI) and only in Creation Units or multiples
thereof, as discussed in the "Creations and Redemptions" section in the SAI.
Shares
generally trade in the secondary market in amounts less than a Creation Unit.
Shares of the Funds trade under the trading symbol listed for each Fund in the
Fund Summaries section of the Prospectus.
The
Funds are listed on a national securities exchange, which is open for trading
Monday through Friday and is closed on weekends and the following holidays, as
observed: 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.
Book
Entry
Shares
of the Funds are held in book-entry form, which means that no stock certificates
are issued. The Depository Trust Company (“DTC”) or its nominee is the record
owner of all outstanding Shares and is recognized as the owner of all Shares for
all purposes.
Investors
owning Shares are beneficial owners as shown on the records of DTC or its
participants. DTC serves as the securities depository for all Shares.
Participants include DTC, securities brokers and dealers, banks, trust
companies, clearing corporations and other institutions that directly or
indirectly maintain a custodial relationship with DTC. As a beneficial owner of
Shares, you are not entitled to receive physical delivery of stock certificates
or to have Shares registered in your name, and you are not considered a
registered owner of Shares. Therefore, to exercise any rights as an owner of
Shares, you must rely upon the procedures of DTC and its participants. These
procedures are the same as those that apply to any securities that you hold in
book entry or “street name” form.
FREQUENT
TRADING
Unlike
frequent trading of shares of a traditional open-end mutual fund (i.e., not
exchange-traded shares), frequent trading of Shares on the secondary market does
not disrupt portfolio management, increase a Fund's trading costs, lead to
realization of capital gains, or otherwise harm Fund shareholders because these
trades do not involve a Fund directly. A few institutional investors are
authorized to purchase and redeem the Funds' Shares directly with the Funds.
When these trades are effected in-kind (i.e.,
for securities, and not for cash), they do not cause any of the harmful effects
(noted above) that may result from frequent cash trades. Moreover, each Fund
imposes transaction fees on in-kind purchases and redemptions of the Fund
intended to cover the custodial and other costs incurred by the Fund in
effecting in-kind trades. These fees increase if an investor substitutes cash in
part or in whole for securities, reflecting the fact that a Fund’s trading costs
increase in those circumstances, although transaction fees are subject to
certain limits and therefore may not cover all related costs incurred by a Fund.
For these reasons, the Board of Trustees has determined that it is not necessary
to adopt policies and procedures to detect and deter frequent trading and
market-timing in Shares of the Funds.
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.
No
Rule 12b-1 fees are currently paid by a Fund, 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 a Fund. 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 of a Fund.
DIVIDENDS
AND DISTRIBUTIONS
Dividends
from net investment income, including any net foreign currency gains, generally
are declared and paid at least annually and any net realized capital gains are
distributed at least annually. In order to improve tracking error or comply with
the distribution requirements of the Code, dividends may be declared and paid
more frequently than annually for a Fund.
Dividends
and other distributions on Shares are distributed on a pro rata basis to
beneficial owners of such Shares. Dividend payments are made through DTC
participants to beneficial owners then of record with proceeds received from a
Fund. Dividends and security gain distributions are distributed in U.S. dollars
and cannot be automatically reinvested in additional Shares.
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 a Fund 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
purchased in the secondary market.
TAXES
The
following is a summary of certain tax considerations that may be relevant to an
investor in a Fund. Except where otherwise indicated, the discussion relates to
investors who are individual United States citizens or residents and is based on
current tax law. You should consult your tax advisor for further information
regarding federal, state, local and/or foreign tax consequences relevant to your
specific situation.
Distributions.
Each Fund receives income and gains on its investments. The income, less
expenses incurred in the operation of a Fund, constitutes the Fund's net
investment income from which dividends may be paid to you. Each Fund has elected
and intends to qualify as a RIC under the Code for federal tax purposes and to
distribute to shareholders substantially all of its net investment income and
net capital gain each year. Except as otherwise noted below, you will generally
be subject to federal income tax on a Fund’s distributions you receive. For
federal income tax purposes, Fund distributions attributable to short-term
capital gains and net investment income are taxable to you as ordinary income.
Distributions attributable to net capital gains (the excess of net long- term
capital gains over net short-term capital losses) of a Fund generally are
taxable to you as long-term capital gains. This is true no matter how long you
own your Shares or whether you take distributions in cash or additional Shares.
The maximum long-term capital gain rate applicable to individuals is 20%.
Distributions
of “qualifying dividends” will also generally be taxable to you at long-term
capital gain rates as long as certain requirements are met. In general, if 95%
or more of the gross income of a Fund (other than net capital gain) consists of
dividends received from domestic corporations or “qualified” foreign
corporations (“qualifying dividends”), then all distributions received by
individual shareholders of a Fund will be treated as qualifying dividends. But
if less than 95% of the gross income of a Fund (other than net capital gain)
consists of qualifying dividends, then distributions received by individual
shareholders of a Fund will be qualifying dividends only to the extent they are
derived from qualifying dividends earned by such Fund. For the lower rates to
apply, you must have owned your Shares for at least 61 days during the 121-day
period beginning on the date that is 60 days before such Fund’s ex-dividend date
(and such Fund will need to have met a similar holding period requirement with
respect to the Shares of the corporation paying the qualifying dividend). The
amount of a Fund’s distributions that qualify for this favorable treatment may
be reduced as a result of such Fund’s securities lending activities (if any), a
high portfolio turnover rate or investments in debt securities or
“non-qualified” foreign corporations. In addition, whether distributions
received from foreign corporations are qualifying dividends will depend on
several factors including the country of residence of the corporation making the
distribution. Accordingly, distributions from many of the Funds’ holdings may
not be qualifying dividends.
A
portion of distributions paid to shareholders that are corporations may also
qualify for the dividends-received deduction for corporations, subject to
certain holding period requirements and debt financing limitations. The amount
of the dividends qualifying for this deduction may, however, be reduced as a
result of such Fund’s securities lending activities, by a high portfolio
turnover rate or by investments in debt securities or foreign corporations.
Distributions
from a Fund will generally be taxable to you in the year in which they are paid,
with one exception. Dividends and distributions declared by a Fund in October,
November or December and paid in January of the following year are taxed as
though they were paid on December 31.
You
should note that if you buy Shares of a Fund shortly before it makes a
distribution, the distribution will be fully taxable to you even though, as an
economic matter, it simply represents a return of a portion of your investment.
This adverse tax result is known as “buying into a dividend.”
You
will be informed of the amount of your ordinary income dividends, qualifying
dividend income, and capital gain distributions at the time they are paid, and
you will be advised of the tax status for federal income tax purposes shortly
after the close of each calendar year. If you have not held Shares for a full
year, a Fund may designate and distribute to you, as ordinary income or capital
gain, a percentage of income that is not equal to the actual amount of such
income earned during the period of your investment in such Fund.
A
Fund’s investments in partnerships, including in partnerships defined as
Qualified Publicly Traded Partnerships for tax purposes, may result in such Fund
being subject to state, local or foreign income, franchise or withholding tax
liabilities.
Excise
Tax Distribution Requirements.
Under the Code, a nondeductible excise tax of 4% is imposed on the excess of a
RIC’s “required distribution” for the calendar year ending within the RIC’s
taxable year over the “distributed amount” for such calendar year. The term
“required distribution” means the sum of (a) 98% of ordinary income (generally
net investment income) for the calendar year, (b) 98.2% of capital gain (both
long-term and short-term) for the one-year period ending on October 31 (or
December 31, if a Fund so elects), and (c) the sum of any untaxed, undistributed
net investment income and net capital gains of the RIC for prior periods. The
term “distributed amount” generally means the sum of (a) amounts actually
distributed by a Fund from its current year’s ordinary income and capital gain
net income and (b) any amount on which a Fund
pays
income tax for the taxable year ending in the calendar year. Although each Fund
intends to distribute its net investment income and net capital gains so as to
avoid excise tax liability, a Fund may determine that it is in the interest of
shareholders to distribute a lesser amount. The Funds intend to declare and pay
these amounts in December (or in January, which must be treated by you as
received in December) to avoid these excise taxes but can give no assurances
that their distributions will be sufficient to eliminate all such taxes.
Foreign
Currencies.
Under the Code, gains or losses attributable to fluctuations in exchange rates
which occur between the time a Fund accrues interest or other receivables or
accrues expenses or other liabilities denominated in a foreign currency, and the
time such Fund actually collects such receivables or pays such liabilities, are
treated as ordinary income or ordinary loss. Similarly, gains or losses from the
disposition of foreign currencies, from the disposition of debt securities
denominated in a foreign currency, or from the disposition of a forward foreign
currency contract which are attributable to fluctuations in the value of the
foreign currency between the date of acquisition of the asset and the date of
disposition also are treated as ordinary income or loss. These gains or losses,
referred to under the Code as “section 988” gains or losses, increase or
decrease the amount of a Fund’s investment company taxable income available to
be distributed to its shareholders as ordinary income, rather than increasing or
decreasing the amount of such Fund’s net capital gain.
Foreign
Taxes.
Each Fund will be subject to foreign withholding taxes with respect to certain
payments received from sources in foreign countries. If at the close of the
taxable year more than 50% in value of a Fund’s assets consists of stock in
foreign corporations, such Fund will be eligible to make an election to treat a
proportionate amount of those taxes as constituting a distribution to each
shareholder, which would allow you either (subject to certain limitations) (1)
to credit that proportionate amount of taxes against your U.S. Federal income
tax liability as a foreign tax credit or (2) to take that amount as an itemized
deduction. If a Fund is not eligible or chooses not to make this election, it
will be entitled to deduct such taxes in computing the amounts it is required to
distribute.
Sales
and Exchanges.
The sale of Shares is a taxable event on which a gain or loss is recognized. The
amount of gain or loss is based on the difference between your tax basis in
Shares and the amount you receive for them upon disposition. Generally, you will
recognize long-term capital gain or loss if you have held your Shares for over
one year at the time you sell or exchange them. Gains and losses on Shares held
for one year or less will generally constitute short-term capital gains, except
that a loss on Shares held six months or less will be re-characterized as a
long-term capital loss to the extent of any long-term capital gain distributions
that you have received on the Shares. A loss realized on a sale or exchange of
Shares may be disallowed under the so-called “wash sale” rules to the extent the
Shares disposed of are replaced with other Shares of that same Fund within a
period of 61 days beginning 30 days before and ending 30 days after the Shares
are disposed of, such as pursuant to a dividend reinvestment in Shares of a
Fund. If disallowed, the loss will be reflected in an adjustment to the basis of
the Shares acquired.
Taxes
on Purchase and Redemption of Creation Units. An
Authorized Participant who exchanges equity 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 equity
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 Internal Revenue Service
(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 such Creation Units are held as a capital
asset.
IRAs
and Other Tax-Qualified Plans.
The one major exception to the preceding tax principles is that distributions
on, and sales, exchanges and redemptions of, Shares held in an IRA or other
tax-qualified plan are not currently taxable but may be taxable when funds are
withdrawn from the tax qualified plan, unless the Shares were purchased with
borrowed funds.
Medicare
Tax. An
additional 3.8% Medicare tax is imposed on certain net investment income
(including ordinary dividends and capital gain distributions received from a
Fund and net gains from redemptions or other taxable dispositions of Fund
Shares) of U.S. individuals, estates and trusts to the extent that such person’s
“modified adjusted gross income” (in the case of an individual) or “adjusted
gross income” (in the case of an estate or trust) exceeds a threshold amount.
This Medicare tax, if applicable, is reported by you on, and paid with, your
federal income tax return.
Backup
Withholding.
Each Fund will be required in certain cases to withhold and remit to the U.S.
Treasury backup withholding at the applicable rate on dividends and gross sales
proceeds paid to any shareholder (i) who has either provided an incorrect tax
identification number or no number at all, (ii) who is subject to backup
withholding by the IRS, or (iii) who has failed to certify to a Fund, when
required to do so, that he or she is not subject to backup withholding or is an
“exempt recipient.”
Cost
Basis Reporting.
Federal law requires that shareholders' cost basis, gain/loss, and holding
period be reported to the IRS and to shareholders on the 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.
For
those securities defined as "covered" under current IRS cost basis tax reporting
regulations, accurate cost basis and tax lot information must be maintained for
tax reporting purposes. This information is not required for Shares that are not
"covered." The Funds and their 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. Shareholders should contact their financial
intermediaries with respect to reporting of cost basis and available elections
for their accounts.
State
and Local Taxes.
You may also be subject to state and local taxes on income and gain attributable
to your ownership of Shares. You should consult your tax advisor regarding the
tax status of distributions in your state and locality.
U.S.
Tax Treatment of Foreign Shareholders.
A non-U.S. shareholder generally will not be subject to U.S. withholding tax on
gain from the redemption of Shares or on capital gain dividends (i.e., dividends
attributable to long-term capital gains of a Fund) unless, in the case of a
shareholder who is a non-resident alien individual, the shareholder is present
in the United States for 183 days or more during the taxable year and certain
other conditions are met. Non-U.S. shareholders generally will be subject to
U.S. withholding tax at a rate of 30% (or a lower treaty rate, if applicable) on
distributions by a Fund of net investment income, other ordinary income, and the
excess, if any, of net short-term capital gain over net long-term capital loss
for the year, unless the distributions are effectively connected with a U.S.
trade or business of the shareholder. Exemptions from U.S. withholding tax are
provided for certain capital gain dividends paid by a Fund from net long-term
capital gains, if any, interest-related dividends paid by the Fund from its
qualified net interest income from U.S. sources and short-term capital gain
dividends, if such amounts are reported by the Fund. Non-U.S. shareholders are
subject to special U.S. tax certification requirements to avoid backup
withholding and claim any treaty benefits. Non-U.S. shareholders should consult
their tax advisors regarding the U.S. and foreign tax consequences of investing
in a Fund.
Other
Reporting and Withholding Requirements. Under
the Foreign Account Tax Compliance Act (“FATCA”), a 30% withholding tax is
imposed on income dividends paid by a 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 may 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.
Consult
Your Tax Professional.
Your investment in a Fund could have additional tax consequences. You should
consult your tax professional for information regarding all tax consequences
applicable to your investments in a Fund. More tax information relating to the
Funds is also provided in the SAI. This short summary is not intended as a
substitute for careful tax planning.
DETERMINATION
OF NET ASSET VALUE
Each
Fund calculates its NAV as of the regularly scheduled close of business of the
New York Stock Exchange (“NYSE”) (normally 4:00 p.m. Eastern time) on each day
that the NYSE is open for business, based on prices at the time of closing,
provided that 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 dealers that
make a two-way market in such currencies (or a data service provider based on
quotations received from such banks or dealers). The NAV of each Fund is
calculated by dividing the value of the net assets of such Fund (i.e., the value
of its total assets less total liabilities) by the total number of outstanding
Shares, generally rounded to the nearest cent. The price of Fund Shares is based
on market price, and because ETF shares trade at market prices rather than NAV,
Shares may trade at a price greater than NAV (a premium) or less than NAV (a
discount).
In
calculating a Fund’s NAV, the Fund’s investments are generally valued using
market valuations. 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, provided the amortized cost is approximately the value on
current sale of the security. 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. A
Fund 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 the 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 NAV 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.
Because
foreign markets may be open on different days than the days during which a
shareholder may purchase Shares, the value of a Fund’s investments may change on
days when shareholders are not able to purchase Shares. Additionally, due to
varying holiday schedules, redemption requests made on certain dates may result
in a settlement period exceeding seven calendar days.
The
value of assets denominated in foreign currencies is converted into U.S. dollars
using exchange rates deemed appropriate by the Adviser. Any use of a different
rate from the rates used by each Index Provider may adversely affect a Fund’s
ability to track its Underlying Index.
The
right of redemption may be suspended or the date of payment postponed with
respect to a Fund (1) for any period during which the NYSE or listing exchange
is closed (other than customary weekend and holiday closings), (2) for any
period during which trading on the NYSE or listing exchange is suspended or
restricted, (3) for any period during which an emergency exists as a result of
which disposal of the Fund’s portfolio securities or determination of its NAV is
not reasonably practicable, or (4) in such other circumstances as the SEC
permits.
Subject
to oversight by the Board of Trustees, the Adviser, as “valuation designee,”
performs fair value determinations of Fund investments. In addition, the
Adviser, as the valuation designee, is responsible for periodically assessing
any material risks associated with the determination of the fair value of a
Fund's investments; establishing and applying fair value methodologies; testing
the appropriateness of fair value methodologies; and overseeing and evaluating
third-party pricing services. The Adviser has established a fair value committee
to assist with its designated responsibilities as valuation
designee.
PREMIUM/DISCOUNT
AND SHARE INFORMATION
Once
available, information regarding how often the Shares of each Fund traded on the
national securities exchanges at a price above (i.e., at a premium to) or below
(i.e., at a discount to) the NAV of the Fund, the Fund's per share NAV, and the
median bid-ask spread of the Shares can be found at www.globalxetfs.com.
TOTAL
RETURN INFORMATION
Each
Fund had commenced operation as of the most recent fiscal year end. The tables
that follow present information about the total returns of each Fund's
Underlying Index and the total returns of each Fund. The information presented
for each Fund is as of the most recent fiscal year end.
“Annualized
Total Returns” or "Cumulative Total Returns" represent the total change in value
of an investment over the periods indicated.
Each
Fund’s per share NAV is the value of one share of the Fund as calculated in
accordance with the standard formula for valuing mutual fund Shares. The NAV
return is based on the NAV of each Fund and the market return is based on the
market prices of the Fund. The price used to calculate market prices is
determined by using the midpoint between the bid and the ask on the primary
stock exchange on which Shares of the Fund are listed for trading, as of the
time that the Fund’s NAV is calculated. Market and NAV returns assume that
dividends and capital gain distributions have been reinvested in the Fund at
market prices and NAV, respectively.
An
index is a statistical composite that tracks a specified financial market or
sector. Unlike a Fund, an Underlying Index does not actually hold a portfolio of
securities and therefore does not incur the expenses incurred by the Fund. These
expenses negatively impact the performance of a Fund. Also, market returns do
not include brokerage commissions that may be payable on secondary market
transactions. If brokerage commissions were included, market returns would be
lower. The returns shown in the tables below do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption or
sale of Fund Shares. The investment return and principal value of Shares of a
Fund will vary with changes in market conditions. Shares of a Fund may be worth
more or less than their original cost when they are redeemed or sold in the
market. A Fund’s past performance is no guarantee of future results.
Annualized
Total Returns
Inception
to 10/31/23
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NAV |
MARKET |
UNDERLYING
INDEX |
Global
X Silver Miners ETF 1 |
-3.33% |
-3.34% |
-2.93% |
Global
X Copper Miners ETF 2
|
0.09% |
0.10% |
0.54% |
Global
X Gold Explorers ETF 3* |
(8.15% |
-8.17% |
-7.53% |
Global
X Uranium ETF 4** |
-7.61% |
-7.54% |
-7.03% |
1
For the period since inception on 04/19/10 to 10/31/23
2
For
the period since inception on 04/19/10 to 10/31/23
3
For the period since inception on 11/03/10 to 10/31/23
4
For the period since inception on 11/04/10 to 10/31/23
* Hybrid
index performance reflects the performance of the Solactive Global Gold
Explorers Total Return Index through November 30, 2016, the Solactive Global
Gold Explorers & Developers Total Return Transition Index through April 30,
2017 and the Solactive Global Gold Explorers & Developers Total Return Index
thereafter.
** Hybrid
index performance reflects the performance of the Solactive Global Uranium Total
Return Index through April 30, 2018, the Solactive Global Uranium & Nuclear
Components Transition TR Index through July 31, 2018 and the Solactive Global
Uranium & Nuclear Components Total Return Index thereafter.
Cumulative
Total Returns
Inception
to 10/31/23
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NAV |
MARKET |
UNDERLYING
INDEX |
Global
X Silver Miners ETF 1 |
-36.75% |
-36.87% |
-33.11% |
Global
X Copper Miners ETF 2 |
1.18% |
1.30% |
7.52% |
Global
X Gold Explorers ETF 3* |
-66.88% |
-66.98% |
-63.84% |
Global
X Uranium ETF 4** |
-64.26% |
-63.88% |
-61.25% |
1
For the period since inception on 04/19/10 to 10/31/23
2
For
the period since inception on 04/19/10 to 10/31/23
3
For the period since inception on 11/03/10 to 10/31/23
4
For the period since inception on 11/04/10 to 10/31/23
* Hybrid
index performance reflects the performance of the Solactive Global Gold
Explorers Total Return Index through November 30, 2016, the Solactive Global
Gold Explorers & Developers Total Return Transition Index through April 30,
2017 and the Solactive Global Gold Explorers & Developers Total Return Index
thereafter.
** Hybrid
index performance reflects the performance of the Solactive Global Uranium Total
Return Index through April 30, 2018, the Solactive Global Uranium & Nuclear
Components Transition TR Index through July 31, 2018 and the Solactive Global
Uranium & Nuclear Components Total Return Index thereafter.
INFORMATION
REGARDING THE INDICES AND THE INDEX PROVIDERS
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 USD 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 USD 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 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 trusts whose primary purpose is
to provide exposure to physical uranium, and companies whose primary business is
the production/development of nuclear reactors and associated technology. 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. In addition, Minerva Analytics Ltd. will screen the companies for
exposure to "Controversial Weapons". A company will be considered as exposed to
Controversial Weapons if: (i) it is involved in the production development or
maintenance of anti-personnel mines, biological or chemical weapons, cluster
munitions, depleted uranium, nuclear weapons, or any other weapon that violate
humanitarian principles through normal use; (ii) it produces or develops key and
dedicated components for controversial weapons; (iii) it holds more than a 20%
stake in a company that is involved in controversial weapons; or it is more than
50% owned by a company that is involved in controversial weapons. 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.
Disclaimers
The
Index Provider is described below:
Solactive
AG is a leading company in the structuring and indexing business for
institutional clients. Solactive AG runs the Solactive index platform (formerly
S-BOX platform). Solactive AG indices are used by issuers worldwide as
underlying indices for financial products. Solactive AG does not sponsor,
endorse or promote any of the Funds and is not in any way connected to them and
does not accept any liability in relation to their issue, operation or trading.
OTHER
SERVICE PROVIDERS
SEI
Investments Global Funds Services is the sub-administrator for each Fund.
The
Bank of New York Mellon serves as custodian and transfer agent for each Fund
except for the Global X Uranium ETF. Brown Brothers Harriman & Co. serves as
custodian and transfer agent to the Global X Uranium ETF.
Stradley
Ronon Stevens & Young, LLP serves as counsel for the Trust and the Trust's
Independent Trustees.
PricewaterhouseCoopers
LLP serves as the Funds' independent registered public accounting firm and has
audited the financial statements for the Funds for the fiscal years ended
October 31, 2019, 2020, 2021, 2022 and 2023.
ADDITIONAL
INFORMATION
The
Trust enters into contractual arrangements with various parties, including among
others, the Funds’ Adviser, sub-adviser(s) (as applicable), custodian(s), and
transfer agent(s) who provide services to the Funds. Shareholders are not
parties to any such contractual arrangements and are not intended beneficiaries
of those contractual arrangements, and those contractual arrangements are not
intended to create in any shareholder any right to enforce them against the
service providers or to seek any remedy under them against the service
providers, either directly or on behalf of the Trust.
This
Prospectus provides information concerning the Funds that investors should
consider in determining whether to purchase Fund Shares. Neither this Prospectus
nor the SAI is intended, or should be read, to be or give rise to an agreement
or contract between the Trust or the Funds and any investor, or to give rise to
any rights in any shareholder or other person other than any rights under
federal or state law that may not be waived.
FINANCIAL
HIGHLIGHTS
Each
Fund had commenced operations and has financial highlights for the fiscal year
ended October 31, 2023. The financial highlights tables are intended to
help investors understand a Fund's financial performance since the Fund's
inception. Certain information reflects financial results for a single Share of
a Fund. The total returns in the tables represent the rate that an investor
would have earned (or lost) on an investment in a Fund, assuming reinvestment of
all dividends and distributions.
PricewaterhouseCoopers
LLP serves as the Funds' independent registered public accounting firm and has
audited the financial statements of the Funds for the fiscal years ended October
31, 2019, 2020, 2021, 2022 and 2023, as applicable. The Funds' financial
statements are available without charge upon request.
Selected
Per Share Data & Ratios
For
a Share Outstanding Throughout the Period
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Net
Asset Value, Beginning of Period ($) |
Net
Investment Income ($)* |
Net
Realized and Unrealized Gain (Loss) on Investments ($) |
Total
from Operations ($) |
Distribution
from Net Investment Income ($) |
Distribution
from Capital Gains ($) |
Return
of Capital ($) |
Total
from Distributions ($) |
Net Asset
Value, End of Period ($) |
Total
Return (%)** |
Net
Assets End of Period ($)(000) |
Ratio
of Expenses to Average Net Assets (%) |
Ratio
of Net Investment Income to Average Net Assets (%) |
Portfolio
Turnover (%)†† |
Global
X Silver Miners ETF |
2023 |
24.93 |
0.14 |
(0.91) |
(0.77) |
(0.09) |
— |
— |
(0.09) |
24.07 |
(3.12) |
823,747 |
0.65 |
0.52 |
19.72 |
2022 |
38.78 |
0.20 |
(13.57) |
(13.37) |
(0.37) |
— |
(0.11) |
(0.48) |
24.93 |
(34.83) |
841,908 |
0.65 |
0.64 |
17.72 |
2021 |
42.28 |
0.41 |
(3.00) |
(2.59) |
(0.91) |
— |
— |
(0.91) |
38.78 |
(6.43) |
1,100,191 |
0.65 |
0.96 |
15.61 |
2020 |
30.39 |
0.33 |
12.11 |
12.44 |
(0.55) |
— |
— |
(0.55) |
42.28 |
41.40 |
984,993 |
0.65 |
0.90 |
19.95 |
2019 |
23.20 |
0.21 |
7.38 |
7.59 |
(0.40) |
— |
— |
(0.40) |
30.39 |
33.08 |
525,591 |
0.66 |
0.80 |
42.16 |
Global
X Copper Miners ETF |
2023 |
28.74 |
0.75 |
4.24 |
4.99 |
(0.90) |
— |
— |
(0.90) |
32.83 |
17.07 |
1,317,932 |
0.65 |
2.00 |
23.73 |
2022 |
37.31 |
1.19 |
(8.66) |
(7.47) |
(1.10) |
— |
— |
(1.10) |
28.74 |
(20.38) |
1,315,488 |
0.65 |
3.31 |
30.46 |
2021 |
21.42 |
0.63 |
15.74 |
16.37 |
(0.48) |
— |
— |
(0.48) |
37.31 |
76.80 |
994,009 |
0.65 |
1.71 |
20.13 |
2020 |
17.47 |
0.23 |
3.85 |
4.08 |
(0.13) |
— |
— |
(0.13) |
21.42 |
23.45 |
103,888 |
0.65 |
1.26 |
16.85 |
2019 |
19.38 |
0.37 |
(1.58) |
(1.21) |
(0.70) |
— |
— |
(0.70) |
17.47 |
(6.51) |
48,021 |
0.65 |
1.89 |
18.77 |
Global
X Gold Explorers ETF |
2023 |
20.36 |
0.06 |
2.25 |
2.31 |
(0.21) |
— |
(0.01) |
(0.22) |
22.45 |
11.24 |
31,931 |
0.65 |
0.24 |
19.87 |
2022 |
30.10 |
0.17 |
(9.32) |
(9.15) |
(0.59) |
— |
— |
(0.59) |
20.36 |
(30.94) |
28,745 |
0.65 |
0.63 |
30.04 |
2021 |
33.48 |
0.20 |
(2.54) |
(2.34) |
(1.04) |
— |
— |
(1.04) |
30.10 |
(7.36) |
49,722 |
0.65 |
0.61 |
18.3 |
2020 |
25.39 |
0.06 |
8.47 |
8.53 |
(0.44) |
— |
— |
(0.44) |
33.48 |
34.03 |
60,670 |
0.65 |
0.20 |
18.81 |
2019 |
18.49 |
0.04 |
6.87 |
6.91 |
(0.01) |
— |
— |
(0.01) |
25.39 |
37.40 |
43,470 |
0.65 |
0.19 |
16.35 |
Global
X Uranium ETF |
2023 |
20.30 |
0.09 |
6.16 |
6.25 |
(0.05) |
— |
— |
(0.05) |
26.50 |
30.86 |
2,175,006 |
0.69 |
0.43 |
20.03 |
2022 |
27.04 |
0.28 |
(5.61) |
(5.33) |
(1.41) |
— |
— |
(1.41) |
20.30 |
(20.11) |
1,588,529 |
0.69 |
1.25 |
26.47 |
2021 |
10.87 |
0.39 |
15.91 |
16.30 |
(0.13) |
— |
— |
(0.13) |
27.04 |
150.73 |
1,315,609 |
0.69 |
1.91 |
30.01 |
2020 |
10.92 |
0.22 |
(0.03) |
0.19 |
(0.24) |
— |
— |
(0.24) |
10.87 |
1.72 |
141,609 |
0.69 |
2.03 |
59.21 |
2019 |
12.08 |
0.17 |
(1.17) |
(1.00) |
(0.16) |
— |
— |
(0.16) |
10.92 |
(8.42) |
187,616 |
0.71 |
1.46 |
23.93 |
|
|
|
|
| |
* |
Per
share data calculated using average shares method. |
** |
Total
return is for the period indicated and has not been annualized. The return
shown does not reflect the deduction of taxes that a shareholder would pay
on Fund distributions or the redemption of Fund shares. |
†† |
Portfolio
turnover rate is for the period indicated and periods of less than one
year have not been annualized. Excludes effect of in-kind
transfers. |
Amounts
designated as "—" are either $0 or have been rounded to $0.
OTHER
INFORMATION
The
Funds are not sponsored, endorsed, sold or promoted by any national securities
exchange. No national securities exchange makes any representation or warranty,
express or implied, to the owners of Shares or any member of the public
regarding the advisability of investing in securities generally or in the Funds
particularly or the ability of the Funds to achieve their objectives. No
national securities exchange has any obligation or liability in connection with
the administration, marketing or trading of the Funds.
For
purposes of the 1940 Act, shares that are issued by a registered investment
company and purchases of such shares by investment companies and companies
relying on Sections 3(c)(1) or 3(c)(7) of the 1940 Act are subject to the
restrictions set forth in Section 12(d)(1) of the 1940 Act. Registered
investment companies are permitted to invest in certain of the Funds beyond the
limits set forth in section 12(d)(1), subject to certain conditions set forth in
Rule 12d1-4 under the 1940 Act, including that such investment companies enter
into an agreement with such Fund.
The
method by which Creation Units are created and traded may raise certain issues
under applicable securities laws. Because new Creation Units are issued and sold
by the Funds on an ongoing basis, a “distribution,” as such term is used in the
Securities Act, may occur at any point. 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 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 Units 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-dealers
who are not “underwriters” but are participating in a distribution (as
contrasted with ordinary secondary trading transactions), and thus dealing with
Shares that are part of an “unsold allotment” within the meaning of Section
4(a)(3)(C) of the Securities Act, would be unable to take advantage of the
prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act.
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. As a result, broker-dealer firms should note that
dealers who are not underwriters but are participating in a distribution (as
contrasted with ordinary secondary market transactions) and thus dealing with
the Shares that are part of an overallotment within the meaning of Section
4(a)(3)(A) of the Securities Act would be unable to take advantage of the
prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act.
Firms that incur a prospectus delivery obligation with respect to Shares are
reminded that, under Rule 153 of 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 NYSE Arca is satisfied by the fact that the
prospectus is available at NYSE Arca upon request. The prospectus delivery
mechanism provided in Rule 153 is only available with respect to transactions on
an exchange.
For
more information visit our website at
www.globalxetfs.com
or
call 1-888-493-8631
|
| |
Investment
Adviser and Administrator
Global
X Management Company LLC
605
3rd Avenue, 43rd Floor
New
York, NY 10158
|
Distributor
SEI
Investments Distribution Co.
One
Freedom Valley Drive
Oaks,
PA 19456
|
Custodians
and Transfer Agents
Brown
Brothers Harriman & Co.
50
Post Office Square
Boston,
MA 02110
The
Bank of New York Mellon
240
Greenwich Street
New
York, New York 10286
|
Sub-Administrator
SEI
Investments Global Funds Services
One
Freedom Valley Drive
Oaks,
PA 19456
|
Legal
Counsel to the Global X Funds®
and Independent Trustees
Stradley
Ronon Stevens & Young, LLP
2000
K Street, N.W., Suite 700
Washington,
DC 20006
|
Independent
Registered Public Accounting Firm
PricewaterhouseCoopers
LLP
Two
Commerce Square, Suite 1800
2001
Market Street
Philadelphia,
PA 19103 |
A
Statement of Additional Information dated March 1, 2024, which contains
more details about the Funds, is incorporated by reference in its entirety into
this Prospectus, which means that it is legally part of this Prospectus.
Additional
information about each Fund that has commenced operations and its investments is
available in its annual and semi-annual reports to shareholders. The annual
report explains the market conditions and investment strategies affecting each
Fund’s performance during its last fiscal year.
You
can ask questions or obtain a free copy of each such Fund’s semi-annual and
annual report or the Statement of Additional Information by calling
1-888-493-8631. Free copies of a Fund’s semi-annual and annual report and the
Statement of Additional Information are available from our website at
www.globalxetfs.com.
Information
about each Fund, including its semi-annual and annual reports and the Statement
of Additional Information, has been filed with the SEC. It can be reviewed and
copied on the EDGAR database on the SEC’s internet site (http://www.sec.gov).
You can also request copies of these materials, upon payment of a duplicating
fee, by electronic request at the SEC’s e-mail address ([email protected]).
PROSPECTUS
Distributor
SEI
Investments Distribution Co.
One
Freedom Valley Drive
Oaks,
PA 19456
March 1,
2024
Investment
Company Act File No.: 811-22209