Global X Heads To The BARN With New ETF

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 BARN today marking the company's second foray into the agriculture world. Last week, Global X introduced the Global X Fertilizers/Potash ETF 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 FISN and food (Global X Food ETF 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 DE, Monsanto MON, Archer Daniels Midland ADM, Bunge BG and Agco 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 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.