infoTECH Feature

November 17, 2011

New York's Global X Funds Debuts Global X Social Media Index ETF

The social media industry is growing big and fast. The social media has not only attracted individual users, but has also attracted many companies. According to a 2011 study conducted by Burson-Marsteller, nearly 84 percent of Fortune 100 companies are currently using branded social media channels, while nearly 81 percent of the top Asian companies have expanded into branded social media channels.

Cashing in on this opportunity, Global X Funds, a New York-based provider of Exchange-Traded Funds (ETFs), announced the Global X Social Media Index ETF, which is the first ETF that focuses on social media companies.

In general, an ETF is an investment fund traded on stock exchanges. An ETF holds assets such as stocks, commodities, or bonds. It tracks an index, a commodity or a group of assets like an index fund, but trades like a stock on an exchange.

According to Global X Funds, the Global X Social Media Index ETF attempts to capture the social media industry in a single ETF, and includes companies from all over the world that provide social networking, file sharing, and other web-based media applications. It tracks the Solactive Social Media Index, which is designed to reflect the equity performance of companies involved in the social media industry.

“SOCL can provide an efficient way to tap into this global, dynamic sector,” said Bruno del Ama, chief executive officer of Global X Funds, in a statement. “As the industry continues to expand through IPOs, the index will capture these new companies shortly after their public debut, providing a relatively cost effective way to gain exposure to the social media industry.”

According to a press release, the Underlying Index's three largest stocks were DeNA Co., Sina Corp. (News - Alert) and Inc., as of November 11, 2011. International country exposure as of November 11, 2011 includes: China [36.28 percent], US [26.22 percent], Japan [19.95 percent], Russia [9.55 percent], Germany [2.28 percent], and other [5.65 percent].

According to sources, a Pew (News - Alert) Research Center survey anticipates that in 2011 approximately 65 percent of adult internet users said that they use a social networking site, which is nearly double the percentage that reported social network usage in 2008.

In addition, increased use of mobile has further increased social media, with nearly 40 percent of social media users accessing such content directly from their mobile phones. In addition, the social media use by small businesses in the U.S. has increased to include nearly one out of every three businesses.

In related news, Global X Funds launched the world's first Lithium ETF, which is the first ETF to provide investors targeted access to a resource industry vital for the renewable energy and green movement.

Jayashree Adkoli is a contributing editor for TMCnet. To read more of Jayashree's articles, please visit her columnist page.

Edited by Jennifer Russell

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