IndexUniverse reported that GlobalX, one of the small specialized ETF providers, has filed for several new ETFs including the Global X Fishing ETF. The others, per IndexUniverse, are the Global X Aluminum ETF, the Global X Lithium ETF, the Global X Uranium ETF, the Global X Food ETF, the Global X Shipping ETF, and the Global X Waste Management ETF.
What, no farmland/plantation ETF? I actually think that could be an interesting one but expensive if you look at where some of the names trade and maybe the GlobalX Food will cover some of that ground.As for an initial reaction on the others...Aluminum companies could run the gambit and be quite volatile. In the last few years Alcoa (AA) has been a serial disappointer and although I do not follow the group very closely it seems like this could be more of a trading vehicle.
I am surprised there are enough stocks to make a lithium ETF. Ok, there is Sociedad Quimica y Minera (SQM) which has other things in addition to lithium and then there is um, er, well. Obviously GlobalX didn't file for a one stock ETF but this one will be obscure if it lists but could be interesting. The thing here is batteries for cars. You can read this article for more details but most of the world's lithium is in Latin America and SQM is likely to be a very large component. I will be curious to see if the fund turns out to be more volatile than what is likely to be the largest holding--that being SQM.
The uranium ETF will obviously have a lot of Cameco (CCJ) and like the lithium fund I wonder if it will be more volatile than the largest holding, likely to be CCJ. I think this is a legitimate materials exposure for someone who expects nuclear energy to become a bigger part of the solution thus creating more demand for uranium.
Depending on what direction the food ETF goes the question becomes is it a staples fund or materials. If we are talking at least some exposure to farmland and plantations then I think staples is probably on the mark and could be a way to add emerging exposure in a sector where there are not many names to choose from. Someone could buy a stock like TH Plantations Berhad (THPLF) for example which is in palm oil and palm kernel among other things in Malaysia as a proxy for staples and emerging markets following this line of thought or maybe this proposed ETF.
The Shipping and Waste Management ETFs are not new concepts, there is a shipping ETF that went away on a technicality but will be coming right back, and there have been domestic waste stocks for years so maybe the proposed ETF will put a different, for US investors, spin on it.
8 comments:
This could not be more timely (or rather, it would be more timely if I could buy the fishery ETF today). I have been thinking about the oil spill, and where are people going to get seafood to eat with all the big Gulf fisheries closed? And that meant rummaging through your archive to find out what those tickers were.
CMFO had a nice pop today, too.
Roger,
Getting back to your discussion of investing in rare earth elements, today's WSJ said the Pentagon is going to increase its stockpiles of rare earth elements and mentioned lithium in particular. That could be bullish for SQM.
Roger, the problem I have with thinly traded EFTs, and I am making an assumption that the EFTs mentioned in your article will be thinly traded, is expenses. First, 1/2% to 1% (or more) management fees and, then, the spread between buy/sell. Doesn't it make more sense to simply buy the top 2 or 3 securities in the EFT; this being expecially true where one or two secrities make up a sizable percentage of the ETF's holdings?
that could be right of course but what do you suppose the slippage would be in trying to buy TH Plantations Berhad? It would probably be easier to sell $20,000 of the fish ETF than $8000 worth of TH Plantations Berhad.
Like Hummingbear, my first reaction to the title of your post was that it seems like a dangerously narrow fund given our disaster in the Gulf. But I suppose a global fishing ETF would be safer.
Incidentally, I'd bought RIG about 5 days before the Deepwater Horizon blew up. I held on to it after crunching numbers and determining the loss of that rig wouldn't significantly impact earnings. But the oil kept flowing and it looks like there's gonna be huge liability...only question is, who's liable. I got stopped out of the position about 10% later.
I feel a lot worse about the destruction to wildlife than I do about the money I lost.
Your lesson today is a bit too fishy for me.
Sliding on to the oil slick, I am looking at companies that Homeland Security and FEMA will use to mitigate the mess and to retrofit rigs with some of the blowvalve items that are required on North Sea platform piping. Readers should consult relevant Homeland Security public bid sites for insights.
I already have some names, but until contracts are actually bid and accepted, they are too speculative to wager on. As with Katrina, this is sure to be a slow and error-prone process.
T
Whenever i see the post like your's i feel that there are still helpful people who share information for the help of others, it must be helpful for other's. thanx and good job.
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Norwegian Fisheries? Now you have my attention. I have been looking into all sort of food and water investments. I will be checking your blog for any exotic finds.
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