Market Overview

Global X Heads To The BARN With New ETF

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Fresh off a busy May that saw the firm introduce six new ETFs, New York-based Global X is introducing the Global X Farming ETF (NYSE: BARN) today marking the company's second foray into the agriculture world.

Last week, Global X introduced the Global X Fertilizers/Potash ETF (NYSE: SOIL), which focuses on fertilizer and crop nutrient producers. BARN takes a more broad-based approach to farm-related companies.

With an expense ratio of 0.68%, BARN will hold 50 stocks and track the Solactive Global Farming Index. The introduction of BARN completes Global X's quartet of “F” ETFs, meaning farm, fertilizer (SOIL), fisheries (Global X Fishing Industry ETF (NYSE: FISN) and food (Global X Food ETF (NYSE: EATX).

While the U.S. accounts for almost 32% of BARN's country weight, there is no shortage of Asian exposure as Singapore, Malaysia and China combine for 34% of the new fund's weight. The U.K. and Japan each get allocations of more than 5%.

To say BARN is evenly-weighted at the stock level is accurate to say the least as each of the ETF's top-10 holdings account for 4.75% of the fund's weight. That lineup includes familiar names such as Deere (NYSE: DE), Monsanto (NYSE: MON), Archer Daniels Midland (NYSE: ADM), Bunge (NYSE: BG) and Agco (NYSE: AGCO).

Other top-10 holdings include Vitierra Inc., Kubota Corp., and Wilmar International Ltd. BARN's top-10 holdings are capped, but the Index the ETF tracks isn't equal-weighted.

With that lineup, BARN, like SOIL, could become another competitor the Market Vectors Agribusiness ETF (NYSE: MOO), the ETF that has thus far dominated the agriculture equities space in the ETF universe.

To be sure, BARN is a play on familiar theme: An ever-increasing world population that is leading to rising food demand. World food production will have to rise 70% by 2050 to feed a population forecast to grow to 9 billion people, Bloomberg reported last month.

“As the population in emerging economies increases their purchasing power and shifts dietary patterns, these nations have to increase food production yields,” Global X CEO Bruno del Ama said in a statement. “Investors in BARN may stand to benefit from this continuing and global demand.”

Global X, which had $1.8 billion in assets under management at the end of April, now has 34 ETFs in its stable with the introduction of BARN and has doubled its ETF lineup in 2011.

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