ETF News

Global X Investments Canada is shaking things up with a wave of new ETFs designed to give Canadian investors broader exposure to international markets. These new solutions target specific regions like Europe, Asia, and Emerging Markets, offering investors a chance to diversify their portfolios beyond the traditional North American focus. Some of these ETFs include strategies to amplify returns or enhance income. This article dives into each ETF's investment focus, highlighting the unique value proposition they bring to investors.

Here’s an overview of the new suite of ETFs:

The Global X Equity Essentials Suite

Global X Investments Canada Equity Essentials are ETFs that provide essential Canadian, U.S., and global equity index exposure in partnership with the world's leading index providers. The ETFs recently launched under this category are:

Global X MSCI EAFE Index ETF (Ticker: EAFX/EAFX.U)

The ETF seeks to replicate the performance of an index, currently the MSCI EAFE Index, designed to measure the performance of large and mid-cap securities across developed markets, including Europe, Australasia, and the Far East, excluding the U.S. and Canada. The MSCI EAFE Index covers over 900 securities across style and sector segments in 21 developed markets.

Global X MSCI Emerging Markets Index ETF (Ticker: EMMX/EMMX.U)

This ETF tracks the MSCI Emerging Markets Index, a benchmark for large and mid-sized companies in developing economies. Spanning 24 markets, the index captures nearly 11% of the global investable universe. Notably, emerging markets hold roughly 10% of the $3.9 trillion invested in funds benchmarked to the MSCI All Country World Indexes (ACWI), highlighting their growing importance.

The Global X Covered Calls & Options-Based ETFs Suite

Global X Investments Canada Covered Calls & Options-Based ETFs employ options-writing as part of their active management strategy. Covered call ETFs utilize an investment strategy designed to generate the potential for additional income in addition to their underlying index exposure. The ETFs recently launched under this category are:

Global X MSCI EAFE Covered Call ETF (Ticker: EACC)

This ETF targets growth in developed markets outside North America, tracking the MSCI EAFE Index. It offers investors a chance to diversify their portfolios and potentially reduce downside risk through a covered call strategy that also generates monthly income.

Global X MSCI Emerging Markets Covered Call ETF (Ticker: EMCC)

The ETF seeks to provide, to the extent possible and net of expenses: (a) exposure to the performance of an index of large and mid-cap securities across emerging markets (currently, the MSCI Emerging Markets Index); and (b) monthly distributions of dividend and call option income. EMCC will employ a dynamic covered call option writing program to mitigate downside risk and generate income.

The Global X Enhanced Index & Enhanced Covered Call ETFs

Global X Investments Canada Enhanced Index & Enhanced Covered Call ETFs will offer 1.25x times leverage on underlying ETFs to potentially amplify returns and covered call writing to enhance income. The ETFs recently launched under this category are:

Global X Enhanced MSCI EAFE Index ETF (Ticker: EAFL)

EAFL seeks to replicate, to the extent reasonably possible and net of expenses, 1.25 times (125%) the performance of an index, currently the MSCI EAFE Index, of large and mid-cap securities across developed markets including countries in Europe, Australasia and the Far East, excluding the U.S. and Canada. EAFL will use leverage to achieve its investment objective. Leverage will be created through the use of cash borrowings or as otherwise permitted under applicable securities legislation.

Global X Enhanced MSCI Emerging Markets Index ETF (Ticker: EMML)

EMML seeks to replicate, to the extent reasonably possible and net of expenses, 1.25 times (125%) the performance of an index, currently the MSCI Emerging Markets Index, of large and mid-cap securities across emerging markets.

Global X Enhanced MSCI EAFE Covered Call ETF (Ticker: EACL)

EACL seeks to provide, to the extent reasonably possible and net of expenses: (a) exposure to the performance of an index of large and mid-cap securities across developed markets including countries in Europe, Australasia and the Far East, excluding the U.S. and Canada (currently, the MSCI EAFE Index); and (b) high monthly distributions of dividend income and call option premiums. To generate premiums, EACL will be exposed to a dynamic covered call option writing program.

EACL will also employ leverage (not to exceed the limits on use of leverage described under "Investment Strategies") through cash borrowing and will generally endeavour to maintain a leverage ratio of approximately 125%.

Global X Enhanced MSCI Emerging Markets Covered Call ETF (Ticker: EMCL)

EMCL seeks to provide, to the extent reasonably possible and net of expenses: (a) exposure to the performance of an index of large and mid-cap securities across emerging markets (currently, the MSCI Emerging Markets Index); and (b) high monthly distributions of dividend income and call option premiums. To generate premiums, EMCL will be exposed to a dynamic covered call option writing program.

EMCL will also employ leverage (not to exceed the limits on use of leverage described under "Investment Strategies") through cash borrowing and will generally endeavour to maintain a leverage ratio of approximately 125%.

Global X is expanding ETF options for Canadian investors

In launching these respective ETF offerings, Global X Investments Canada Inc. provides solutions that can be building blocks for one's portfolio and expand investor optionality, as each solution has a distinct value proposition that may align with an investor's immediate or long-term goals. In speaking about the launch of these Covered Calls and Enhanced Index offerings, Rohit Mehta, President and CEO of Global X stated, "More and more, Canadians are looking for their investments to offer more than just growth over the long-term – they're looking for the benefits of monthly investment income as well. Global X has one of Canada's largest suites of options-based ETFs that offer the benefits of index, sector and geographic equity, and fixed income exposures, with monthly distributions on top."

Takeaway

For investors seeking solutions that provide pure-play exposure to international and emerging markets equities, Global X Investments Canada's series of EAFE and Emerging Markets equity ETFs enables investors to generate income, have access to leverage, or gain broad-based exposure to non-U.S. and Canadian markets in a simplified manner.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.