UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-22209
Global X Funds
(Exact name of registrant as specified in charter)
605 Third Avenue, 43rd floor
New York, NY 10158
(Address of principal executive offices) (Zip code)
Jasmin M. Ali, Esquire
Global X Management Company LLC
605 Third Avenue, 43rd floor
New York, NY 10158
(Name and address of agent for service)
With a copy to:
Jasmin M. Ali, Esquire Global X Management Company LLC 605 Third Avenue, 43rd floor New York, NY 10158 | Eric S. Purple, Esquire Stradley Ronon Stevens & Young, LLP 2000 K Street, N.W., Suite 700 Washington, DC 20006-1871 |
Registrant’s telephone number, including area code: (212) 644-6440
Date of fiscal year end: October 31, 2024
Date of reporting period: October 31, 2024
| Item 1. | Reports to Stockholders. |
(a) A copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Investment Company Act of 1940, as amended (the “Act”) (17 CFR § 270.30e-1), is attached hereto.
Global X Blockchain & Bitcoin Strategy ETF
Principal Listing Exchange: Nasdaq
Annual Shareholder Report: October 31, 2024
This annual shareholder report contains important information about the Global X Blockchain & Bitcoin Strategy ETF (the "Fund") for the period from November 1, 2023 to October 31, 2024. You can find additional information about the Fund at https://www.globalxetfs.com/funds/bits/. You can also request this information by contacting us at 1-888-493-8631.
What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)
| Fund Name | Costs of a $10,000 investment | Costs paid as a percentage of a $10,000 investment |
|---|
| Global X Blockchain & Bitcoin Strategy ETF | $101 | 0.65% |
How did the Fund perform in the last year?
The Fund is an actively-managed exchange-traded fund (“ETF”) that seeks long-term capital appreciation by investing under normal circumstances, at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in equity securities of U.S. and non-U.S. “Blockchain Companies”, as defined below, and in long positions in U.S. listed bitcoin futures (“Bitcoin Futures”) contracts. Under normal circumstances, the Fund will invest at least 25% of its assets in Blockchain Companies and will have notional exposure to Bitcoin Futures equal to at least 20% of the total assets of the Fund.
Blockchain Companies include companies that derive or are expected to derive at least 50% of their revenues, operating income, or assets from digital asset mining, blockchain and digital asset transactions, blockchain applications, blockchain and digital asset hardware, and blockchain and digital asset integration, as defined by Solactive AG, the provider of the Underlying Index.
Blockchain Companies also include U.S.-listed operating companies that directly own a material amount of digital assets.
For the 12-month period ended October 31, 2024 (the “reporting period”), the Fund increased 111.98%. The Fund had a net asset value of $38.09 per share on October 31, 2023, and ended the reporting period with a net asset value of $71.47 per share on October 31, 2024.
During the reporting period, the highest returns came from CME Bitcoin Futures and the Global X Blockchain ETF, which returned 180.29% and 120.36%, respectively. The Global X 1-3 Month T-Bill ETF returned 5.38%.
The Fund delivered positive returns during the reporting period, primarily driven by continued positive sentiment toward digital assets, specifically Bitcoin. The U.S. Federal Reserve's decision to cut interest rates by 50 basis points in September 2024 provided tailwinds to risk assets, including digital assets. Additionally, investor sentiment has improved as the rate cut signaled growing confidence in the U.S. economy by the Federal Reserve. The U.S. Securities and Exchange Commission’s approval of spot Bitcoin ETFs in early 2024 also boosted investor confidence and drove up the value of digital assets. Furthermore, advancements in blockchain infrastructure and scalability solutions that enhanced the practical applications of blockchain technology positively influenced the Fund's holdings during the reporting period.
How did the Fund perform since inception?
Total Return Based on $10,000 Investment
| Global X Blockchain & Bitcoin Strategy ETF - $6982 | S&P 500 Index (TR)* - $12757 | Coin Metrics Bitcoin Coin Index (CMBIBTC) - $11000 |
|---|
| Nov/21 | $10000 | $10000 | $10000 |
| Oct/22 | $2360 | $8392 | $3190 |
| Oct/23 | $3294 | $9243 | $5395 |
| Oct/24 | $6982 | $12757 | $11000 |
Average Annual Total Returns as of October 31, 2024
| Fund/Index Name | 1 Year | Annualized Since Inception |
|---|
| Global X Blockchain & Bitcoin Strategy ETF | 111.98% | -11.42% |
| S&P 500 Index (TR)* | 38.02% | 8.57% |
| Coin Metrics Bitcoin Coin Index (CMBIBTC) | 103.89% | 3.27% |
Since its inception on November 15, 2021. The line graph represents historical performance of a hypothetical investment of $10,000 in the Fund since inception. Returns shown are total returns, which assume the reinvestment of dividends and capital gains. The table and graph presented above do not reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares. Past performance is not indicative of future performance.Call 1-888-493-8631 or visit https://www.globalxetfs.com/funds/bits/ for current month-end performance.
* As of October 2024, pursuant to new regulatory requirements, the Fund added the S&P 500 Index (TR) as its new broad-based securities market benchmark to reflect that the S&P 500 Index (TR) is more broadly representative of the overall applicable securities market.
Key Fund Statistics as of October 31, 2024
| Total Net Assets | Number of Portfolio Holdings | Total Advisory Fees Paid | Portfolio Turnover Rate |
|---|
| $26,952,918 | 7 | $150,873 | 37.45% |
What did the Fund invest in?
Asset/Country WeightingsFootnote Reference*
| Value | Value |
|---|
| Futures Contracts | 1.3% |
| United States | 11.0% |
| Exchange Traded Fund | 80.4% |
| Footnote | Description |
Footnote* | Percentages are calculated based on total net assets. |
| Holding Name | | | Percentage of Total Net Assets |
|---|
Global X Blockchain ETFFootnote Reference** | | | 50.2% |
Global X 1-3 Month T-Bill ETFFootnote Reference** | | | 30.2% |
| U.S. Treasury Bills, 4.59%, 1/2/2025 | | | 3.7% |
| U.S. Treasury Bills, 4.60%, 1/9/2025 | | | 3.7% |
| U.S. Treasury Bills, 4.51%, 1/28/2025 | | | 3.7% |
| CME Bitcoin - Futures Contract | | | 1.3% |
| CME Bitcoin - Futures Contract | | | 0.0% |
| Footnote | Description |
Footnote** | Affiliated Investment |
There were no material changes during the reporting period that are required to be disclosed in this report. For more complete information about other changes to the Fund, you may review the Fund's current prospectus, which is available upon request.
For additional information about the Fund, including its prospectus, financial information, holdings, and proxy voting information, call or visit:
Global X Blockchain & Bitcoin Strategy ETF: BITS
Principal Listing Exchange: Nasdaq
Annual Shareholder Report: October 31, 2024
GX-AR-TSR-10.2024-5
Global X Bitcoin Trend Strategy ETF
Principal Listing Exchange: NYSE Arca, Inc.
Annual Shareholder Report: October 31, 2024
This annual shareholder report contains important information about the Global X Bitcoin Trend Strategy ETF (the "Fund") for the period from March 20, 2024 (commencement of operations) to October 31, 2024. You can find additional information about the Fund at https://www.globalxetfs.com/funds/btrn/. You can also request this information by contacting us at 1-888-493-8631.
What were the Fund costs for the period?
(based on a hypothetical $10,000 investment)
| Fund Name | Costs of a $10,000 investmentFootnote Reference* | Costs paid as an annualized percentage of a $10,000 investment |
|---|
| Global X Bitcoin Trend Strategy ETF | $53 | 0.95% |
| Footnote | Description |
Footnote* | Costs shown not annualized. If the Fund had been open for the full fiscal year, costs shown would have been higher for the period ended. |
How did the Fund perform in the period?
The Fund seeks to provide investment results that correspond to the price and yield performance, before fees and expenses, of the CoinDesk Bitcoin Trend Indicator Futures Index (“Secondary Index”). The Fund is passively managed which means the investment adviser does not attempt to take defensive positions in declining markets. The Fund generally seeks to fully replicate the Secondary Index.
The Secondary Index is designed to provide exposure to a strategy that systematically and dynamically allocates between exposure to U.S. listed bitcoin futures (“Bitcoin Futures”) contracts and cash based on the Bitcoin Trend Indicator (“BTI”), a signal which conveys the direction and strength of the current price trend of Bitcoin. Bitcoin is represented by the CoinDesk Bitcoin Futures Excess Return Index (Ticker: BFIC) and cash is represented by the passively-managed Global X 1-3 Month T-Bill ETF (Ticker: CLIP), an affiliate of the Fund.
Since March 20, 2024 (the “reporting period”), the Fund decreased by 20.60%, while the Secondary Index decreased by 15.70%. The Fund had a net asset value of $33.10 per share on March 20, 2024, and ended the reporting period with a net asset value of $26.09 per share on October 31, 2024.
During the reporting period, the Global X 1-3 Month T-Bill ETF returned 3.28% while the CME Bitcoin Futures returned -76.21%.
During the reporting period the Fund recorded negative performance. Even though Bitcoin Futures have exhibited positive performance, driven by a confluence of factors including halving events, institutional adoption, regulatory advancements, technological innovations, and macroeconomic factors, the Fund’s trend strategy resulted in allocations to cash (represented by the Global X 1-3 Month T-Bill ETF (Ticker: CLIP)), which became a drag on performance. The approval of spot Bitcoin ETFs in early 2024 boosted investor confidence in Bitcoin Futures and drove up the value of digital assets. This approval led to heightened institutional participation which greatly enhanced market liquidity and stability. While the strategy underperformed during the period, these tailwinds for Bitcoin Futures, alongside the dynamic allocation strategy of the Fund, allowed investors to access Bitcoin Futures in a risk-managed basis.
How did the Fund perform since inception?
Total Return Based on $10,000 Investment
| Global X Bitcoin Trend Strategy ETF - $7940 | S&P 500 Index (TR) - $11007 | CoinDesk Bitcoin Trend Indicator Futures Index (TR) (USD) - $8430 |
|---|
| Mar/24 | $10000 | $10000 | $10000 |
| Mar/24 | $10637 | $10059 | $10858 |
| Apr/24 | $8568 | $9648 | $9236 |
| May/24 | $8964 | $10127 | $9333 |
| Jun/24 | $8367 | $10490 | $8523 |
| Jul/24 | $8336 | $10618 | $8559 |
| Aug/24 | $7146 | $10875 | $7374 |
| Sep/24 | $7338 | $11108 | $7773 |
| Oct/24 | $7940 | $11007 | $8430 |
Average Annual Total Returns as of October 31, 2024
| Fund/Index Name | Cumulative Since Inception |
|---|
| Global X Bitcoin Trend Strategy ETF | -20.60% |
| S&P 500 Index (TR) | 10.07% |
| CoinDesk Bitcoin Trend Indicator Futures Index (TR) (USD) | -15.70% |
Since its inception on March 20, 2024. The line graph represents historical performance of a hypothetical investment of $10,000 in the Fund since inception. Returns shown are total returns, which assume the reinvestment of dividends and capital gains. The table and graph presented above do not reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares. Past performance is not indicative of future performance.Call 1-888-493-8631 or visit https://www.globalxetfs.com/funds/btrn/ for current month-end performance.
Key Fund Statistics as of October 31, 2024
| Total Net Assets | Number of Portfolio Holdings | Total Advisory Fees Paid | Portfolio Turnover Rate |
|---|
| $1,826,356 | 8 | $12,386 | 42.49% |
What did the Fund invest in?
Asset/Country WeightingsFootnote Reference*
| Value | Value |
|---|
| Futures Contracts | 3.0% |
| Repurchase Agreement | 13.4% |
| Short-Term Investment | 18.1% |
| United States | 24.5% |
| Exchange Traded Fund | 66.5% |
| Footnote | Description |
Footnote* | Percentages are calculated based on total net assets. |
| Holding Name | | | Percentage of Total Net AssetsFootnote Reference(A) |
|---|
Global X 1-3 Month T-Bill ETFFootnote Reference** | | | 66.6% |
| RBC Capital Markets | | | 13.4% |
| U.S. Treasury Note, 1.50%, 11/30/2024 | | | 6.8% |
| U.S. Treasury Bills, 4.51%, 1/28/2025 | | | 6.8% |
| U.S. Treasury Bills, 4.59%, 1/2/2025 | | | 5.4% |
| U.S. Treasury Bills, 4.60%, 1/9/2025 | | | 5.4% |
| CME Bitcoin - Futures Contract | | | 3.0% |
| Footnote | Description |
Footnote** | Affiliated Investment |
Footnote(A) | Short-Term Investments are not shown in the top ten chart. |
There were no material changes during the reporting period that are required to be disclosed in this report. For more complete information about other changes to the Fund, you may review the Fund's current prospectus, which is available upon request.
For additional information about the Fund, including its prospectus, financial information, holdings, and proxy voting information, call or visit:
Global X Bitcoin Trend Strategy ETF: BTRN
Principal Listing Exchange: NYSE Arca, Inc.
Annual Shareholder Report: October 31, 2024
GX-AR-TSR-10.2024-6
(b) Not applicable.
The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, controller or principal accounting officer, and any person who performs a similar function.
| Item 3. | Audit Committee Financial Expert. |
(a)(1) The registrant’s board of directors has determined that the registrant has at least one audit committee financial expert serving on the audit committee.
(a)(2) The audit committee financial experts are Charles A. Baker and Toai Chin and each is independent as defined in Form N-CSR Item 3(a)(2).
| Item 4. | Principal Accountant Fees and Services. |
Fees billed by PricewaterhouseCoopers LLP (“PwC”) relate to the registrant.
PWC billed the registrant aggregate fees for services rendered to the registrant for the last two fiscal years as follows:
| | 2024 | 2023 |
| | | All fees and
services to
the Trust
that were
pre-
approved | All fees and
services to
service
affiliates
that were
pre-
approved | All other
fees and
services to
service
affiliates
that did not
require pre-
approval | All fees and
services to
the Trust
that were
pre-
approved | All fees and
services to
service
affiliates
that were
pre-
approved | All other
fees and
services to
service
affiliates
that did not
require pre-
approval |
| (a) | Audit Fees | $1,727,672 | $0 | $0 | $1,235,693 | $0 | $0 |
| (b) | Audit-Related Fees | $0 | $0 | $0 | $0 | $0 | $0 |
| (c) | Tax Fees(1) | $487,204 | $0 | $0 | $392,972 | $0 | $0 |
| (d) | All Other Fees | $0 | $0 | $0 | $0 | $0 | $0 |
Notes:
| (1) | Tax Compliance and excise distribution services. |
(e)(1) Not applicable.
(e)(2) Percentage of fees billed applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows (PwC):
| | 2024 | 2023 |
| Audit-Related Fees | 0% | 0% |
| Tax Fees | 0% | 0% |
| All Other Fees | 0% | 0% |
(f) Not applicable.
(g) The aggregate non-audit fees and services billed by PwC for the last two fiscal years were $487,204 and $392,972, respectively.
(h) During the past fiscal year, all non-audit services provided by registrant’s principal accountant to either registrant’s investment adviser or to any entity controlling, controlled by, or under common control with registrant’s investment adviser that provides ongoing services to registrant were pre-approved by the audit committee of registrant’s Board of Trustees. Included in the audit committee’s pre-approval was the review and consideration as to whether the provision of these non-audit services is compatible with maintaining the principal accountant’s independence.
(i) Not applicable.
(j) Not applicable.
| Item 5. | Audit Committee of Listed Registrants. |
The registrant has a separately-designated standing Audit Committee, which is composed of the registrant’s Independent Trustees, Charles A. Baker, Toai Chin and Clifford J. Weber.
(a) The Schedules of Investments and Consolidated Schedules of Investments are included as part of the financial statements and financial highlights filed under Item 7 of this form.
(b) Not applicable.
| Item 7. | Financial Statements and Financial Highlights for Open-End Management Investment Companies. |
Financial statements and financial highlights are filed herein.
Global X Blockchain & Bitcoin Strategy ETF (ticker: BITS)
Global X Bitcoin Trend Strategy ETF (ticker: BTRN)
Annual Financials and Other Information
October 31, 2024
Table of Contents
Shares are bought and sold at market price (not net asset value (“NAV”)) and are not individually redeemed from a Fund. Shares may only be redeemed directly from a Fund by Authorized Participants, in very large creation/ redemption units. Brokerage commissions will reduce returns.
The Funds file their complete schedules of Fund holdings with the Securities and Exchange Commission (the “SEC” or “Commission”) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Funds’ Form N-PORT is available on the Fund’s website at https://www.globalxetfs.com/explore/, and may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
A description of the policies and procedures that Global X Funds uses to determine how to vote proxies relating to Fund securities, as well as information relating to how the Funds voted proxies relating to Fund securities during the most recent 12-month period ended June 30, is available (i) without charge, upon request, by calling 1-888-493-8631; and (ii) on the Fund’s website at https://www.globalxetfs.com/explore/.
| Consolidated Schedule of Investments | October 31, 2024 |
| Global X Blockchain & Bitcoin Strategy ETF |
| | | Shares | | | Value | |
| EXCHANGE TRADED FUNDS — 80.4% | | | | | | | | |
| Global X 1-3 Month T-Bill ETF (A) | | | 81,000 | | | $ | 8,136,450 | |
| Global X Blockchain ETF (A)(D) | | | 265,450 | | | | 13,537,950 | |
TOTAL EXCHANGE TRADED FUNDS
(Cost $20,614,771) | | | | | | | 21,674,400 | |
| | | | | | | | | |
| | | Face Amount | | | | | |
| U.S. TREASURY OBLIGATIONS — 11.0% | | | | | | | | |
| U.S. Treasury Bills | | | | | | | | |
| 4.603%, 01/09/2025(B)(C)^ | | $ | 1,000,000 | | | | 991,442 | |
| 4.585%, 01/02/2025(B)(C)^ | | | 1,000,000 | | | | 992,222 | |
| 4.506%, 01/28/2025(B)(C)^ | | | 1,000,000 | | | | 989,124 | |
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $2,972,615) | | | | | | | 2,972,788 | |
TOTAL INVESTMENTS — 91.4%
(Cost $23,587,386) | | | | | | $ | 24,647,188 | |
Percentages are based on Net Assets of $26,952,918.
A list of the open futures contracts held by the Fund at October 31, 2024, is as follows:
| Type of Contract | | Number of
Contracts | | Expiration
Date | | Notional Amount | | | Value | | | Unrealized
Appreciation |
| Long Contracts | | | | | | | | | | | | | | | |
| CME Bitcoin^ | | 37 | | Nov-2024 | | $ | 12,697,261 | | | $ | 13,036,025 | | | $ | 338,764 |
| CME Bitcoin^ | | 1 | | Dec-2024 | | | 347,017 | | | | 354,900 | | | | 7,883 |
| | | | | | | $ | 13,044,278 | | | $ | 13,390,925 | | | $ | 346,647 |
| ^ | Security is held by the Global X Bitcoin Strategy Subsidiary I, as of October 31, 2024. |
| (A) | Affiliated investment. |
| (B) | Interest rate represents the security’s effective yield at the time of purchase. |
| (C) | Security, or a portion thereof, has been pledged as collateral on futures contracts. The total market value of such securities as of October 31, 2024 was $2,972,788. |
| (D) | For financial information on the Global X Blockchain ETF, please go to the Fund’s website at https://www.globalxetfs.com/explore/. |
The accompanying notes are an integral part of the financial statements.
1
| Consolidated Schedule of Investments | October 31, 2024 |
| Global X Blockchain & Bitcoin Strategy ETF |
The following is a summary of the level of inputs used as of October 31, 2024, in valuing the Fund’s investments and other financial instruments carried at value:
| Investments in Securities | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Exchange Traded Funds | | $ | 21,674,400 | | | $ | — | | | $ | — | | | $ | 21,674,400 | |
| U.S. Treasury Obligations | | | — | | | | 2,972,788 | | | | — | | | | 2,972,788 | |
| Total Investments in Securities | | $ | 21,674,400 | | | $ | 2,972,788 | | | $ | — | | | $ | 24,647,188 | |
| | | | | | | | | | | | | |
| Other Financial Instruments | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Futures Contracts* | | | | | | | | | | | | | | | | |
| Unrealized Appreciation | | $ | 346,647 | | | $ | — | | | $ | — | | | $ | 346,647 | |
| Total Other Financial Instruments | | $ | 346,647 | | | $ | — | | | $ | — | | | $ | 346,647 | |
| * | Futures contracts are valued at the unrealized appreciation on the instrument. |
The following is a summary of the Fund’s transactions with affiliates for the year ended October 31, 2024:
Value
10/31/2023 | | | Purchases
at Cost | | | Proceeds
from Sales | | | Change in
Unrealized
Appreciation
(Depreciation) | | | Realized Gain
(Loss) | | | Value
10/31/2024 | | | Income | | | Capital Gains | |
| Global X 1-3 Month T-Bill ETF | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 4,064,788 | | | $ | 12,344,821 | | | $ | (8,268,141) | | | $ | 5,189 | | | $ | (10,207) | | | $ | 8,136,450 | | | $ | 356,078 | | | $ | — | |
| Global X Blockchain ETF | | | | | | | | | | | | | | | | | | | | | | | |
| | 6,401,736 | | | | 6,061,094 | | | | (7,016,692) | | | | 6,624,881 | | | | 1,466,931 | | | | 13,537,950 | | | | 299,474 | | | | — | |
| Totals: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 10,466,524 | | | $ | 18,405,915 | | | $ | (15,284,833) | | | $ | 6,630,070 | | | $ | 1,456,724 | | | $ | 21,674,400 | | | $ | 655,552 | | | $ | — | |
Amounts designated as “—” are $0 or have been rounded to $0.
See “Glossary” for abbreviations.
The accompanying notes are an integral part of the financial statements.
2
| Consolidated Schedule of Investments | October 31, 2024 |
| Global X Bitcoin Trend Strategy ETF |
| | | Shares | | | Value | |
| EXCHANGE TRADED FUND — 66.5% | | | | | | | | |
| Global X 1-3 Month T-Bill ETF (A)(B)(G) | | | 12,100 | | | $ | 1,215,445 | |
| | | | | | | | | |
TOTAL EXCHANGE TRADED FUND
(Cost $1,213,497) | | | | | | | 1,215,445 | |
| | | | | | | | |
| | | Face Amount | | | | | |
| U.S. TREASURY OBLIGATIONS — 24.5% | | | | | | | | |
| U.S. Treasury Bills | | | | | | | | |
| 4.603%, 01/09/2025(C)(F)^ | | $ | 100,000 | | | | 99,144 | |
| 4.566%, 01/02/2025(C)(F)^ | | | 100,000 | | | | 99,222 | |
| 4.559%, 01/28/2025(C)(F)^ | | | 125,000 | | | | 123,641 | |
U.S. Treasury Note
1.500%, 11/30/24 | | | 125,000 | | | | 124,685 | |
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $446,648) | | | | | | | 446,692 | |
| | | | | | | | |
| | | Shares | | | | | |
| SHORT-TERM INVESTMENT(D)(E) — 18.1% | | | | | | | | |
Fidelity Investments Money Market Government Portfolio, Cl Institutional, 4.740%
(Cost $330,094) | | | 330,094 | | | | 330,094 | |
| | | | | | | | |
| | | Face Amount | | | | | |
| REPURCHASE AGREEMENT(E) — 13.4% | | | | | | | | |
RBC Capital Markets
4.750%, dated 10/31/2024, to be repurchased on 11/01/2024, repurchase price $244,758 (collateralized by a U.S. Treasury Obligation, par value $264,609, 1.250%, 12/31/2026, with a total market value of $249,724)
(Cost $244,726) | | $ | 244,726 | | | | 244,726 | |
TOTAL INVESTMENTS — 122.5%
(Cost $2,234,965) | | | | | | $ | 2,236,957 | |
Percentages are based on Net Assets of $1,826,356.
The accompanying notes are an integral part of the financial statements.
3
| Consolidated Schedule of Investments | October 31, 2024 |
| Global X Bitcoin Trend Strategy ETF |
A list of the open futures contracts held by the Fund at October 31, 2024, is as follows:
| Type of Contract | | Number of
Contracts | | Expiration
Date | | Notional Amount | | | Value | | | Unrealized
Appreciation |
| Long Contracts | | | | | | | | | | | | | | | |
| CME Bitcoin^ | | 5 | | Nov-2024 | | $ | 1,707,198 | | | $ | 1,761,625 | | | $ | 54,427 |
| ^ | Security is held by the Global X Bitcoin Trend Strategy Subsidiary Limited, as of October 31, 2024. |
| (A) | Affiliated investment. |
| (B) | This security or a partial position of this security is on loan at October 31, 2024. The total market value of securities on loan at October 31, 2024 was $563,324. |
| (C) | Interest rate represents the security’s effective yield at the time of purchase. |
| (D) | The rate reported on the Consolidated Schedule of Investments is the 7-day effective yield as of October 31, 2024. |
| (E) | These securities were purchased with cash collateral held from securities on loan. The total value of such securities as of October 31, 2024 was $574,820. The total value of non-cash collateral held from securities on loan as of October 31, 2024 was $0. |
| (F) | Security, or a portion thereof, has been pledged as collateral on futures contracts. The total market value of such securities as of October 31, 2024 was $322,007. |
| (G) | For financial information on the Global X 1-3 Month T-Bill ETF, please go to the Fund’s website at https://www.globalxetfs.com/explore/. |
The following is a summary of the level of inputs used as of October 31, 2024, in valuing the Fund’s investments and other financial instruments carried at value:
| Investments in Securities | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Exchange Traded Fund | | $ | 1,215,445 | | | $ | — | | | $ | — | | | $ | 1,215,445 | |
| U.S. Treasury Obligations | | | — | | | | 446,692 | | | | — | | | | 446,692 | |
| Short-Term Investment | | | 330,094 | | | | — | | | | — | | | | 330,094 | |
| Repurchase Agreement | | | — | | | | 244,726 | | | | — | | | | 244,726 | |
| Total Investments in Securities | | $ | 1,545,539 | | | $ | 691,418 | | | $ | — | | | $ | 2,236,957 | |
| | | | | | | | | | | | | | | | | |
| Other Financial Instruments | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Futures Contracts* | | | | | | | | | | | | | | | | |
| Unrealized Appreciation | | $ | 54,427 | | | $ | — | | | $ | — | | | $ | 54,427 | |
| Total Other Financial Instruments | | $ | 54,427 | | | $ | — | | | $ | — | | | $ | 54,427 | |
| * | Futures contracts are valued at the unrealized appreciation on the instrument. |
The accompanying notes are an integral part of the financial statements.
4
| Consolidated Schedule of Investments | October 31, 2024 |
| Global X Bitcoin Trend Strategy ETF |
The following is a summary of the Fund’s transactions with affiliates for the period ended October 31, 2024:
Value
3/20/2024 | | | Purchases
at Cost | | | Proceeds
from Sales | | | Change in
Unrealized
Appreciation
(Depreciation) | | | Realized Gain
(Loss) | | | Value
10/31/2024 | | | Income | | | Capital Gains |
| Global X 1-3 Month T-Bill ETF | | | | | | | | | | | | | | | | | | | | | | |
| $ | — | | | $ | 2,211,419 | | | $ | (997,222) | | | $ | 1,948 | | | $ | (700) | | | $ | 1,215,445 | | | $ | 42,189 | | | $ | — |
Amounts designated as “—” are $0 or have been rounded to $0.
See “Glossary” for abbreviations.
The accompanying notes are an integral part of the financial statements.
5
| Consolidated Schedules of Investments | October 31, 2024 |
| Glossary (abbreviations which may be used in preceding Consolidated Schedules of Investments): |
Fund Abbreviations
Cl — Class
CME — Chicago Mercantile Exchange
ETF — Exchange-Traded Fund
6
Consolidated Statements of Assets and Liabilities
October 31, 2024
| | | Global X
Blockchain &
Bitcoin Strategy
ETF | | | Global X Bitcoin
Trend Strategy
ETF | |
| Assets: | | | | | | | | |
| Cost of Investments | | $ | 2,972,615 | | | $ | 776,742 | |
| Cost of Affiliated Investments | | | 20,614,771 | | | | 1,213,497 | |
| Cost of Repurchase Agreement | | | — | | | | 244,726 | |
| Investments, at Value | | $ | 2,972,788 | | | $ | 776,786 | * |
| Affiliated Investments, at Value | | | 21,674,400 | | | | 1,215,445 | |
| Repurchase Agreement, at Value | | | — | | | | 244,726 | |
| Dividend, Interest, and Securities Lending Income Receivable | | | 1,945 | | | | 792 | |
| Cash pledged as collateral on Futures Contracts | | | 3,535,204 | | | | 465,069 | |
| Total Assets | | | 28,184,337 | | | | 2,702,818 | |
| Liabilities: | | | | | | | | |
| Obligation to Return Securities Lending Collateral | | | — | | | | 574,820 | |
| Payable for Capital Shares Redeemed | | | 596,541 | | | | — | |
| Payable for Variation Margin on Futures Contracts | | | 393,350 | | | | 51,750 | |
| Payable due to Investment Adviser | | | 7,931 | | | | 1,331 | |
| Payable for Investment Securities Purchased | | | — | | | | 110,523 | |
| Due To Custodian | | | 233,597 | | | | 138,035 | |
| Custodian Fees Payable | | | — | | | | 3 | |
| Total Liabilities | | | 1,231,419 | | | | 876,462 | |
| Net Assets | | $ | 26,952,918 | | | $ | 1,826,356 | |
| Net Assets Consist of: | | | | | | | | |
| Paid-in Capital | | $ | 23,615,611 | | | $ | 1,800,511 | |
| Total Distributable Earnings | | | 3,337,307 | | | | 25,845 | |
| Net Assets | | $ | 26,952,918 | | | $ | 1,826,356 | |
| Outstanding Shares of Beneficial Interest (unlimited authorization — no par value) | | | 377,123 | | | | 70,000 | |
| Net Asset Value, Offering and Redemption Price Per Share | | $ | 71.47 | | | $ | 26.09 | |
| *Includes Market Value of Securities on Loan | | $ | — | | | $ | 563,324 | |
The accompanying notes are an integral part of the financial statements.
7
Consolidated Statements of Operations
For the year/period ended October 31, 2024
| | | Global X
Blockchain &
Bitcoin Strategy
ETF | | | Global X Bitcoin
Trend Strategy
ETF (1) | |
| Investment Income: | | | | | | | | |
| Dividend Income, from Affiliated Investments | | $ | 655,552 | | | $ | 42,189 | |
| Interest Income | | | 92,466 | | | | 16,053 | |
| Security Lending Income | | | — | | | | 732 | |
| Total Investment Income | | | 748,018 | | | | 58,974 | |
| Expenses: | | | | | | | | |
| Supervision and Administration Fees(2) | | | 150,873 | | | | 12,386 | |
| Custodian Fees(3) | | | 86 | | | | 3 | |
| Total Expenses | | | 150,959 | | | | 12,389 | |
| Net Investment Income | | | 597,059 | | | | 46,585 | |
| Net Realized Gain (Loss) on: | | | | | | | | |
| Investments(4) | | | (335 | ) | | | (124 | ) |
| Affiliated Investments | | | 1,456,724 | | | | (700 | ) |
| Futures Contracts | | | 6,261,837 | | | | (672,597 | ) |
| Payment from Adviser(5) | | | 63,070 | | | | 577 | |
| Net Realized Gain (Loss) | | | 7,781,296 | | | | (672,844 | ) |
| Net Change in Unrealized Appreciation (Depreciation) on: | | | | | | | | |
| Investments | | | 113 | | | | 44 | |
| Affiliated Investments | | | 6,630,070 | | | | 1,948 | |
| Futures Contracts | | | (79,196 | ) | | | 54,427 | |
| Net Change in Unrealized Appreciation (Depreciation) | | | 6,550,987 | | | | 56,419 | |
| Net Realized and Unrealized Gain (Loss) | | | 14,332,283 | | | | (616,425 | ) |
| Net Increase (Decrease) in Net Assets Resulting from Operations | | $ | 14,929,342 | | | $ | (569,840 | ) |
| (1) | The Fund commenced operations on March 20, 2024. |
| (2) | The Supervision and Administration fees includes fees paid by the Funds for the investment advisory services provided by the Adviser. (See Note 3 in the Notes to Consolidated Financial Statements.) |
| (3) | See Note 2 in the Notes to Consolidated Financial Statements. |
| (4) | Includes realized gains (losses) as a result of in-kind redemptions. (See Note 5 in the Notes to Consolidated Financial Statements.) |
| (5) | See Note 3 in the Notes to Consolidated Financial Statements. |
The accompanying notes are an integral part of the financial statements.
8
Consolidated Statements of Changes in Net Assets
| | | Global X Blockchain & Bitcoin
Strategy ETF | | | Global X Bitcoin
Trend Strategy
ETF | |
| | | Year Ended
October 31, 2024 | | | Year Ended
October 31,
2023‡ | | | Period Ended
October 31,
2024(1) | |
| Operations: | | | | | | | | | | | | |
| Net Investment Income | | $ | 597,059 | | | $ | 212,423 | | | $ | 46,585 | |
| Net Realized Gain (Loss) | | | 7,781,296 | | | | 616,874 | | | | (672,844 | ) |
| Net Change in Unrealized Appreciation (Depreciation) | | | 6,550,987 | | | | 2,962,162 | | | | 56,419 | |
| Net Increase (Decrease) in Net Assets Resulting from Operations | | | 14,929,342 | | | | 3,791,459 | | | | (569,840 | ) |
| Distributions: | | | (3,225,532 | ) | | | (101,531 | ) | | | (16,376 | ) |
| Capital Share Transactions: | | | | | | | | | | | | |
| Issued | | | 14,494,456 | | | | 2,880,867 | | | | 3,311,518 | |
| Redeemed | | | (12,848,275 | ) | | | (1,028,744 | ) | | | (898,946 | ) |
| Increase in Net Assets from Capital Share Transactions | | | 1,646,181 | | | | 1,852,123 | | | | 2,412,572 | |
| Total Increase in Net Assets | | | 13,349,991 | | | | 5,542,051 | | | | 1,826,356 | |
| Net Assets: | | | | | | | | | | | | |
| Beginning of Year/Period | | | 13,602,927 | | | | 8,060,876 | | | | — | |
| End of Year/Period | | $ | 26,952,918 | | | $ | 13,602,927 | | | $ | 1,826,356 | |
| Share Transactions: | | | | | | | | | | | | |
| Issued | | | 240,000 | | | | 95,000 | | | | 100,000 | |
| Redeemed | | | (220,000 | ) | | | (30,377 | ) | | | (30,000 | ) |
| Net Increase in Shares Outstanding from Share Transactions | | | 20,000 | | | | 64,623 | | | | 70,000 | |
| ‡ | Share transactions have been adjusted to reflect the effect of a 1 for 4 reverse share split on December 19, 2022. (See Note 9 in the Notes to Consolidated Financial Statements.) |
| (1) | The Fund commenced operations on March 20, 2024. |
The accompanying notes are an integral part of the financial statements.
9
Page intentionally left blank.
10
Consolidated Financial Highlights
| Selected Per Share Data & Ratios |
| For a Share Outstanding Throughout the Period |
| | | Net
Asset Value,
Beginning
of Period
($) | | Net Investment
Income
($)* | | Net Realized
and Unrealized
Gain (Loss) on
Investments
($) | | Total from
Operations
($) | | Distribution
from Net
Investment
Income ($) | | Distribution
from Capital
Gains ($) | | Return of
Capital ($) |
| Global X Blockchain & Bitcoin Strategy ETF | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2024 | | | | 38.09 | | | | 1.58 | | | | 39.23 | | | | 40.81 | | | | (7.43 | ) | | | — | | | | — | |
| 2023(1) | | | | 27.56 | | | | 0.62 | | | | 10.21 | | | | 10.83 | | | | (0.30 | ) | | | — | | | | — | |
| 2022(1)(2) | | | | 119.00 | | | | 0.80 | | | | (90.72 | ) | | | (89.92 | ) | | | (1.52 | ) | | | — | | | | — | |
| Global X Bitcoin Trend Strategy ETF | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2024(3) | | | | 33.10 | | | | 0.61 | | | | (7.42 | ) | | | (6.81 | ) | | | (0.20 | ) | | | — | | | | — | |
| * | Per share data calculated using average shares method. |
| ** | Total Return is for the period indicated and has not been annualized. The return shown does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
| † | Annualized. |
| †† | Portfolio turnover rate is for the period indicated and periods of less than one year have not been annualized. Excludes effect of in-kind transfers. |
| # | Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. (See Note 3 in the Notes to Consolidated Financial Statements.) |
| (1) | Per share amounts have been adjusted for a 1 for 4 reverse share split on December 19, 2022. (See Note 9 in the Notes to Consolidated Financial Statements.) |
| (2) | The Fund commenced operations on November 15, 2021. |
| (3) | The Fund commenced operations on March 20, 2024. |
Amounts designated as “—” are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
11
Consolidated Financial Highlights
Total from
Distributions ($) | | Net
Asset Value,
End of
Period ($) | | Total
Return
(%)** | | Net Assets, End of
Period ($)(000) | | Ratio of Expenses
to Average Net
Assets (%) | | Ratio of Net
Investment Income
to Average Net
Assets (%) | | Portfolio
Turnover Rate
(%)†† |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (7.43 | ) | | | 71.47 | | | | 111.98 | | | | 26,953 | | | | 0.65 | # | | | 2.57 | | | | 37.45 | |
| | (0.30 | ) | | | 38.09 | | | | 39.54 | | | | 13,603 | | | | 0.65 | # | | | 1.96 | | | | 24.20 | |
| | (1.52 | ) | | | 27.56 | | | | (76.40 | ) | | | 8,061 | | | | 0.65 | #† | | | 1.96 | † | | | 0.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (0.20 | ) | | | 26.09 | | | | (20.60 | ) | | | 1,826 | | | | 0.95 | #† | | | 3.59 | † | | | 42.49 | |
The accompanying notes are an integral part of the financial statements.
12
Notes to Consolidated Financial Statements
October 31, 2024
1. ORGANIZATION
The Global X Funds (the “Trust”) is a Delaware statutory trust formed on March 6, 2008. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. As of October 31, 2024, the Trust had one hundred portfolios, ninety-seven of which were operational. The financial statements herein and the related notes pertain to the Global X Blockchain & Bitcoin Strategy ETF and Global X Bitcoin Trend Strategy ETF (each a “Fund”, and collectively, the “Funds”). Each Fund has elected non-diversified status under the 1940 Act.
The Global X Bitcoin Trend Strategy ETF commenced operations on March 20, 2024.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed by the Funds:
USE OF ESTIMATES – The Funds are investment companies that apply the accounting and reporting guidance issued in Topic 946 by the U.S. Financial Accounting Standards Board. The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could materially differ from those estimates.
SECURITY VALUATION — Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on the NASDAQ Stock Market (“NASDAQ”)), including securities traded over the counter, are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded (or at approximately 4:00 pm Eastern Standard Time if a security’s primary exchange is normally open at that time), or, if there is no such reported sale, at the most recent mean between the quoted bid and asked prices, which approximates fair value (absent both bid and asked prices on such exchange, the bid price may be used). For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. The prices for foreign securities are reported in local currency and converted to U.S. dollars using currency exchange rates as of the reporting date. The exchange rates used by the Trust for valuation are captured as of the New York or London close each day.
Securities for which market prices are not “readily available” are valued in accordance with fair value procedures (the “Fair Value Procedures”) established by Global X Management Company LLC, the Funds’ investment adviser (the “Adviser”), and approved by the Fund’s Board of Trustees (the “Board”). Pursuant to Rule 2a-5 under the 1940 Act, the Board has designated the Adviser as the “valuation designee” to determine the fair value of securities and other instruments for which no readily available market quotations are available. The fair value procedures are implemented through a fair value committee (the “Committee”)
13
Notes to Consolidated Financial Statements (Continued)
October 31, 2024
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
of the Adviser. Some of the more common reasons that may necessitate that a security be valued using the Fair Value Procedures include: the security’s trading has been halted or suspended; the security has been de-listed from its primary trading exchange; the security’s primary trading market is temporarily closed at a time when, under normal conditions, it would be open; the security has not been traded for an extended period of time; the security’s primary pricing source is not able or willing to provide a price; or trading of the security is subject to local government imposed restrictions. In addition, the Funds may fair value a security if an event that may materially affect the value of the Funds’ security that is traded outside of the United States (a “Significant Event”) has occurred between the Fund’s security, the time of the security’s last close and the time that each Fund calculates its net asset value (“NAV”). A Significant Event may relate to a single issuer or to an entire market sector. Events that may be Significant Events include: government actions, natural disasters, armed conflict, acts of terrorism and significant market fluctuations. If the Adviser becomes aware of a Significant Event that has occurred with respect to a security or group of securities after the closing of the exchange or market on which the security or securities principally trade, but before the time at which the Funds calculate their NAVs, it may request that a Committee meeting be called. When a security is valued in accordance with the Fair Value Procedures, the Committee will determine the value after taking into consideration all relevant information reasonably available to the Committee.
If available, debt securities are priced based upon valuations provided by independent, third-party pricing agents. Such values generally reflect the last reported sales price if the security is actively traded. The third-party pricing agents may also value debt securities at an evaluated bid price by employing methodologies that utilize actual market transactions, broker-supplied valuations, or other methodologies designed to identify the market value for such securities. Debt obligations with remaining maturities of sixty days or less will be valued at their market value. Prices for most securities held by the Funds are provided daily by recognized independent pricing agents. If a security price cannot be obtained from an independent, third-party pricing agent, the Funds seek to obtain a bid price from at least one independent broker.
In accordance with the authoritative guidance on fair value measurements and disclosure under U.S. GAAP, the Funds disclose the fair value of their investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The objective of a fair value measurement is to determine the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Accordingly, the fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).
14
Notes to Consolidated Financial Statements (Continued)
October 31, 2024
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
The three levels of the fair value hierarchy are described below:
Level 1 – Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that the Funds have the ability to access at the measurement date;
Level 2 – Other significant observable inputs (including quoted prices in nonactive markets, quoted prices for similar investments, fair value of investments for which the Funds have the ability to fully redeem tranches at NAV as of the measurement date or within the near term, and short-term investments valued at amortized cost); and
Level 3 – Significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments and fair value of investments for which the Funds do not have the ability to fully redeem tranches at NAV as of the measurement date or within the near term).
Investments are classified within the level of the lowest significant input considered in determining fair value. Investments classified within Level 3 whose fair value measurement considers several inputs may include Level 1 or Level 2 inputs as components of the overall fair value measurement. For details of the investment classification, reference the Consolidated Schedules of Investments.
The unobservable inputs used to determine fair value of Level 3 assets may have similar or diverging impacts on valuation. Significant increases and decreases in these inputs in isolation and interrelationships between those inputs could result in significantly higher or lower fair value measurement.
DUE TO/FROM BROKERS — Due to/from brokers includes cash and collateral balances with the Funds’ clearing brokers or counterparties as of October 31, 2024. The Funds continuously monitors the credit standing of each broker or counterparty with whom they conducts business. In the event a broker or counterparty is unable to fulfill its obligations, the Funds would be subject to counterparty credit risk.
REPURCHASE AGREEMENTS - Securities pledged as collateral for repurchase agreements are held by Brown Brothers Harriman & Co. (“BBH”) or The Bank of New York Mellon (“BNY Mellon”), as appropriate, in their roles as Custodian to respective Funds (each, a “Custodian” and together, the “Custodians”), and are designated as being held on each Fund’s behalf by the Custodian under a book-entry system. Each Fund monitors the adequacy of the collateral on a daily basis and can require the seller to provide additional collateral in the event the market value of the securities pledged falls below the carrying value of the repurchase agreement, including accrued interest.
15
Notes to Consolidated Financial Statements (Continued)
October 31, 2024
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
It is each Fund’s policy to only enter into repurchase agreements with banks and other financial institutions which are deemed by the Adviser to be creditworthy. The Funds bear the risk of loss in the event that the counterparty to a repurchase agreement defaults on its obligations and the Funds are prevented from exercising their rights to dispose of the underlying securities received as collateral. For financial statement purposes, the Funds record the securities lending collateral (included in repurchase agreements, at value or restricted cash) as an asset and the obligation to return securities lending collateral as a liability on the Consolidated Statements of Assets and Liabilities.
Repurchase agreements are entered into by the Funds under Master Repurchase Agreements (“MRA”) which permit the Funds, under certain circumstances, including an event of default (such as bankruptcy or insolvency), to offset payables and/or receivables under the MRA with collateral held and/or posted to the counterparty and create one single net payment due to or from the Funds.
FEDERAL INCOME TAXES — It is each Fund’s intention to qualify, or continue to qualify, as a regulated investment company for Federal income tax purposes by complying with the appropriate provisions of Subchapter M of the Internal Revenue Code of 1986 (the “Code”). Accordingly, no provisions for Federal income taxes have been made in the financial statements except as described below.
The Funds evaluate tax positions taken or expected to be taken in the course of preparing the Funds’ tax returns to determine whether it is “more-likely-than-not” (i.e., greater than 50 percent) that each tax position will be sustained upon examination by a taxing authority based on the technical merits of the position. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. The Funds did not record any tax positions in the current period; however, management’s conclusions regarding tax positions may be subject to review and adjustment at a later date based on factors including, but not limited to, examination by tax authorities (i.e., the last three tax year ends, as applicable), and on-going analysis of and changes to tax laws and regulations, and interpretations thereof. If a Fund has foreign tax filings that have not been made, the tax years that remain subject to examination may date back to the inception of the Fund.
As of and during the reporting period ended October 31, 2024, the Funds did not have a liability for any unrecognized tax benefits. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as an income tax expense on the Consolidated Statements of Operations. During the reporting period, the Funds did not incur any interest or penalties.
SECURITY TRANSACTIONS AND INVESTMENT INCOME – Security transactions are accounted for on the trade date for financial reporting purposes. Costs used in determining realized gains and losses on the sale of investment securities are based on
16
Notes to Consolidated Financial Statements (Continued)
October 31, 2024
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
specific identification. Dividend income is recorded on the ex-dividend date. Interest income is recognized on the accrual basis from the settlement date. Amortization of premiums and accretion of discounts is included in interest income.
FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION – The books and records of the Funds are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars on the date of valuation. Purchases and sales of investment securities, income and expenses are translated into U.S. dollars at the relevant rates of exchange prevailing on the respective dates of such transactions. The Funds do not isolate that portion of realized or unrealized gains and losses resulting from changes in the foreign exchange rate from fluctuations arising from changes in the market prices of the securities. These gains and losses are included in net realized and unrealized gains and losses on investments on the Consolidated Statements of Operations. Net realized and unrealized gains and losses on foreign currency transactions and translations represent net foreign exchange gains or losses from foreign currency spot contracts, disposition of foreign currencies, currency gains or losses realized between trade and settlement dates on securities transactions and the difference between the amount of the investment income and foreign withholding taxes recorded on the Funds’ books and the U.S. dollar equivalent amounts actually received or paid.
FUTURES CONTRACTS – To the extent consistent with its investment objective and strategies, each Fund may use futures contracts for tactical hedging purposes as well as to enhance the Fund’s returns. Initial margin deposits of cash or securities are made upon entering into futures contracts. The contracts are marked to market daily and the resulting changes in value are accounted for as unrealized gains and losses. Variation margin payments are paid or received, depending upon whether unrealized gains or losses are incurred. When the contract is closed, a Fund records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the amount invested in the contract.
Risks of entering into futures contracts include the possibility that there will be an imperfect price correlation between the futures and the underlying securities. Second, it is possible that a lack of liquidity for futures contracts could exist in the secondary market, resulting in an inability to close a position prior to its maturity date. Third, a futures contract involves the risk that the Fund could lose more than the original margin deposit required to initiate a futures transaction.
Futures contracts shall be valued at the settlement price established each day by the board of the exchange on which they are traded. The daily settlement prices for financial futures are provided by an independent source.
17
Notes to Consolidated Financial Statements (Continued)
October 31, 2024
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Finally, the risk exists that losses could exceed amounts disclosed on the Consolidated Statements of Assets and Liabilities. Refer to each Fund’s Consolidated Schedules of Investments for details regarding open futures contracts as of October 31, 2024.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS – The Funds distribute thier net investment income on a pro rata basis. Any net investment income and net realized capital gains are distributed at least annually. All distributions are recorded on the ex-dividend date.
CREATION UNITS – The Funds issue and redeem their shares (“Shares”) on a continuous basis at NAV and only in large blocks of 10,000 Shares, referred to as “Creation Units”. Purchasers of Creation Units (each, an “Authorized Participant”) at NAV must pay a standard creation transaction fee per transaction. The fee is a single charge and will be the same regardless of the number of Creation Units purchased by an Authorized Participant on the same day.
An Authorized Participant who holds Creation Units and wishes to redeem at NAV would also pay a standard redemption fee per transaction to the Fund’s Custodian, on the date of such redemption, regardless of the number of Creation Units redeemed that day.
If a Creation Unit is purchased or redeemed for cash, an additional variable fee may be charged. The following table discloses Creation Unit breakdown:
| | | Creation
Unit
Shares | | Creation
Fee | | Redemption
Fee |
| Global X Blockchain & Bitcoin Strategy ETF | | | 10,000 | | | $ | 50 | | | $ | 50 | |
| Global X Bitcoin Trend Strategy ETF | | | 10,000 | | | | 50 | | | | 50 | |
CASH OVERDRAFT CHARGES – Per the terms of an agreement with BBH, if the Global X Bitcoin Trend Strategy ETF has a cash overdraft on a given day, it is assessed an overdraft charge equal to the applicable BBH Base Rate plus 2.00%. Per the terms of an agreement with BNY Mellon, if the Global X Blockchain & Bitcoin Strategy ETF has a cash overdraft, it will be charged interest at a rate then charged by BNY Mellon to its institutional custody clients in the relevant currency. Cash overdraft charges are included in custodian fees on the Consolidated Statements of Operations.
3. RELATED PARTIES AND SERVICE PROVIDER TRANSACTIONS
On July 2, 2018, the Adviser consummated a transaction pursuant to which it became an indirect, wholly-owned subsidiary of Mirae Asset Global Investments Co., Ltd. (“Mirae”). In this manner, the Adviser is ultimately controlled by Mirae.
18
Notes to Consolidated Financial Statements (Continued)
October 31, 2024
3. RELATED PARTIES AND SERVICE PROVIDER TRANSACTIONS (continued)
The Adviser serves as the investment adviser and the administrator for the Funds. Subject to the supervision of the Board, the Adviser is responsible for managing the investment activities of the Funds and the Funds’ business affairs and other administrative matters and provides or causes to be furnished all supervisory, administrative and other services reasonably necessary for the operation of the Funds, including certain distribution services (provided pursuant to a separate distribution agreement), certain shareholder and distribution-related services (provided pursuant to a separate Rule 12b-1 Plan and related agreements) and investment advisory services (provided pursuant to a separate Investment Advisory Agreement), under what is essentially an “all-in” fee structure.
For the Adviser’s services to the Funds, under a supervision and administration agreement (the “Supervision and Administration Agreement”), the Funds pay a monthly fee to the Adviser at the annual rate (stated as a percentage of the average daily net assets of the Fund) (“Supervision and Administration Fee”). In addition, the Funds bear other expenses that are not covered by the Supervision and Administration Agreement, which may vary and affect the total expense ratios of the Funds, such as taxes, brokerage fees, commissions, certain custodian fees, acquired fund fees and expenses for investments in unaffiliated investment companies, other transaction expenses, interest expenses and extraordinary expenses (such as litigation and indemnification expenses).
The Supervision and Administration Agreement for the Funds provides that the Adviser also bears the costs for acquired fund fees and expenses generated by investments by the Funds in affiliated investment companies. For the year and period ended October 31, 2024, the Adviser paid acquired fund fees and expenses of $63,070 for the Global X Blockchain & Bitcoin Strategy ETF and $577 for the Global X Bitcoin Trend Strategy ETF, and made such reimbursement payments to the Funds on a monthly basis. These amounts are included in Payment from Adviser on the Consolidated Statements of Operations.
The following table discloses supervision and administration fees payable pursuant to the Supervision and Administration Agreement:
| | | Supervision and
Administration Fee |
| Global X Blockchain & Bitcoin Strategy ETF | | 0.65% |
| Global X Bitcoin Trend Strategy ETF | | 0.95% |
SEI Investments Global Funds Services (“SEIGFS”) serves as sub-administrator to the Funds. As sub-administrator, SEIGFS provides the Funds with all required general administrative services, including, without limitation: office space, equipment, and personnel; clerical and general back office services; bookkeeping, internal accounting and secretarial services; the calculation of NAV; and assistance with the preparation and filing of reports, registration statements, proxy statements, and other materials required to be
19
Notes to Consolidated Financial Statements (Continued)
October 31, 2024
3. RELATED PARTIES AND SERVICE PROVIDER TRANSACTIONS (continued)
filed or furnished by the Funds under federal and state securities laws. As compensation for these services, SEIGFS receives certain out-of-pocket costs, transaction fees, and asset-based fees which are accrued daily and paid monthly by the Adviser.
SEI Investments Distribution Co. (“SIDCO”) serves as the Funds’ underwriter and distributor of Creation Units pursuant to a distribution agreement (the “Distribution Agreement”). SIDCO has no obligation to sell any specific quantity of the Funds Shares.
SIDCO bears the following costs and expenses relating to the distribution of Shares: (1) the costs of processing and maintaining records of creations of Creation Units; (2) all costs of maintaining the records required of a registered broker/dealer; (3) the expenses of maintaining its registration or qualification as a dealer or broker under federal or state laws; (4) filing fees; and (5) all other expenses incurred in connection with the distribution services as contemplated in the Distribution Agreement. SIDCO receives no fee from the Fund for its distribution services under the Distribution Agreement, rather, the Adviser compensates SIDCO for certain expenses, out-of-pocket costs, and transaction fees.
BBH serves as Custodian and transfer agent of the Global X Bitcoin Trend Strategy ETF. As Custodian, BBH has agreed to (i) make receipts and disbursements of money on behalf of the Fund; (ii) collect and receive all income and other payments and distributions on account of the Fund’s portfolio investments; (iii) respond to correspondence from shareholders, security brokers and others relating to its duties; and (iv) make periodic reports to the Fund concerning the Fund’s operations. BBH does not exercise any supervisory function over the purchase and sale of securities. As compensation for these services, BBH receives certain out-of-pocket costs, transaction fees and asset-based fees which are accrued daily and paid monthly by the Adviser from its fees. As transfer agent, BBH has agreed to (i) issue and redeem Shares of the Fund; (ii) make dividend and other distributions to shareholders of the Fund; (iii) respond to correspondence by shareholders and others relating to its duties; (iv) maintain shareholder accounts; and (v) make periodic reports to the Funds. As compensation for these services, BBH receives certain out-of-pocket costs, transaction fees and asset-based fees which are accrued daily and paid monthly by the Adviser from its fees.
BNY Mellon serves as Custodian and transfer agent to the Trust on behalf of the Global X Blockchain & Bitcoin Strategy ETF. As Custodian, BNY Mellon may appoint domestic and foreign sub-custodians and use depositories from time to time to hold securities and other instruments purchased by the Trust in foreign countries and to hold cash and currencies for the Trust on behalf of the Fund. Under its transfer agency agreement with the Trust, BNY Mellon has undertaken with the Trust to provide the following services with respect to the Fund: (i) perform and facilitate the performance of purchases and redemptions of Creation Units, (ii) prepare and transmit by means of Depository Trust Company’s (“DTC”) book-entry system payments for dividends and distributions on or with respect to the Shares declared by the Trust on behalf of the Fund, as applicable, (iii) prepare and deliver reports,
20
Notes to Consolidated Financial Statements (Continued)
October 31, 2024
3. RELATED PARTIES AND SERVICE PROVIDER TRANSACTIONS (continued)
information and documents as specified in the transfer agency agreement, (iv) perform the customary services of a transfer agent and dividend disbursing agent, and (v) render certain other miscellaneous services as specified in the transfer agency agreement or as otherwise agreed upon.
4. BASIS FOR CONSOLIDATIONS FOR THE GLOBAL X BITCOIN STRATEGY SUBSIDIARY I AND GLOBAL X BITCOIN TREND STRATEGY SUBSIDIARY LIMITED
The Consolidated Schedules of Investments, Consolidated Statements of Assets and Liabilities, Consolidated Statements of Operations, Consolidated Statements of Changes in Net Assets, and the Consolidated Financial Highlights of the Funds include the accounts of each Fund’s wholly-owned subsidiary (each, a “Subsidiary” and together the “Subsidiaries”). All intercompany accounts and transactions have been eliminated in consolidation for the Funds. The Global X Bitcoin Strategy Subsidiary I and Global X Bitcoin Trend Strategy Subsidiary Limited, have a fiscal year end and conforming tax year end of October 31.
The Subsidiaries are classified as controlled foreign corporation under the Code. Each Subsidiary’s taxable income is included in the calculation of the relevant Funds’ taxable income. Net losses of the Subsidiaries are not deductible by the Funds either in the current period or carried forward to future periods.
The Funds may invest up to 25% of their total assets in their respective Subsidiaries.
A summary of each Fund’s investments in its respective Subsidiary are as follows:
| | | Inception Date of
Subsidiary | | Subsidiary
Net Assets at
October 31, 2024 | | % of Total
Net Assets at
October 31, 2024 |
| Global X Bitcoin Strategy Subsidiary I | | November 15, 2021 | | $5,805,637 | | 21.5% |
| Global X Bitcoin Trend Strategy Subsidiary Limited | | March 20, 2024 | | 432,895 | | 23.7 |
5. INVESTMENT TRANSACTIONS
For the year and period ended October 31, 2024, the purchases and sales of investments in securities excluding in-kind transactions, long-term U.S. Government, and short-term securities, were:
| | | Purchases | | Sales and
Maturities |
| Global X Blockchain & Bitcoin Strategy ETF | | $ | 12,946,949 | | | $ | 6,787,888 | |
| Global X Bitcoin Trend Strategy ETF | | | 582,319 | | | | 826,577 | |
21
Notes to Consolidated Financial Statements (Continued)
October 31, 2024
5. INVESTMENT TRANSACTIONS (continued)
During the year and period ended October 31, 2024, there were no purchases or sales of long-term U.S. Government securities for the Funds.
For the year and period ended October 31, 2024, in-kind transactions associated with creations and redemptions were:
| | | Purchases | | | Sales | | | Realized
Gain/(Loss) | |
| Global X Blockchain & Bitcoin Strategy ETF | | $ | 5,458,965 | | | $ | 8,496,945 | | | $ | 3,343,547 | |
| Global X Bitcoin Trend Strategy ETF | | | 1,876,051 | | | | 170,646 | | | | 374 | |
6. DERIVATIVE TRANSACTIONS
The following tables show the derivatives categorized by underlying risk exposure.
The following tables show the fair value of the derivative financial instruments and the location in the Consolidated Statements of Assets and Liabilities categorized by underlying risk exposure as of October 31, 2024.
| | | Asset Derivatives | | | | | | Liability Derivatives | | |
| | | | Fair Value | | | | | | Fair Value | |
| | | | | | | | | | | |
| Global X Blockchain & Bitcoin Strategy ETF | | | | | | | | |
| Commodity contracts | | Unrealized appreciation on Futures Contracts | $ | 346,647 | * | | Commodity contracts | | Unrealized depreciation on Futures Contracts | $ | — | |
| Total Derivatives not accounted for as hedging instruments | $ | 346,647 | | | | | | $ | — | |
| | | | | | | | | | | | | |
| Global X Bitcoin Trend Strategy ETF | | | | | | | | |
| Commodity contracts | | Unrealized appreciation on Futures Contracts | $ | 54,427 | * | | Commodity contracts | | Unrealized depreciation on Futures Contracts | $ | — | |
| Total Derivatives not accounted for as hedging instruments | $ | 54,427 | | | | | | $ | — | |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Consolidated Schedules of Investments. Only current day’s variation margin is reported within the Consolidated Statements of Assets & Liabilities.
22
Notes to Consolidated Financial Statements (Continued)
October 31, 2024
6. DERIVATIVE TRANSACTIONS (continued)
The effect of derivative instruments on the Consolidated Statements of Operations for the year and period ended October 31, 2024: Amount of realized gain or (loss) on derivatives recognized in income:
| | | Futures Contracts | |
| Global X Blockchain & Bitcoin Strategy ETF | | | |
| Commodity contracts | | 6,261,837 | |
| | | | |
| Global X Bitcoin Trend Strategy ETF | | | |
| Commodity contracts | | (672,597 | ) |
Change in unrealized appreciation or (depreciation) on derivatives recognized in income:
| | | Futures Contracts | |
| Global X Blockchain & Bitcoin Strategy ETF | | | |
| Commodity contracts | | (79,196 | ) |
| | | | |
| Global X Bitcoin Trend Strategy ETF | | | |
| Commodity contracts | | 54,427 | |
For the year and period ended October 31, 2024, the monthly average notional value of the futures contracts held by the Funds were as follows:
| | | Average
Notional
Balance
Short | | Average
Notional
Balance
Long |
| Global X Blockchain & Bitcoin Strategy ETF | | $ | — | | | $ | 11,701,666 | |
| Global X Bitcoin Trend Strategy ETF | | | — | | | | 1,737,175 | |
7. TAX INFORMATION
The amount and character of income and capital gain distributions to be paid, if any, are determined in accordance with Federal income tax regulations, which may differ from U.S. GAAP. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. These book/tax differences may be temporary or permanent. To the extent these differences are permanent in nature, they are charged or credited to undistributed net investment income (loss), accumulated net realized gain (loss) or paid-in capital, as appropriate, in the period that the differences arise.
23
Notes to Consolidated Financial Statements (Continued)
October 31, 2024
7. TAX INFORMATION (continued)
The permanent difference are primarily attributable to redemptions in-kind and investment in wholly owned subsidiary.
The tax character of dividends and distributions declared for the years ending October 31, 2024 and October 31, 2023 was as follows:
| Global X Funds | | Ordinary Income | | Long-Term
Capital Gain | | Return of Capital | | Totals |
| Global X Blockchain & Bitcoin Strategy ETF |
| 2024 | | $ | 3,225,532 | | | $ | — | | | $ | — | | | $ | 3,225,532 | |
| 2023 | | | 101,531 | | | | — | | | | — | | | | 101,531 | |
| Global X Bitcoin Trend Strategy ETF |
| 2024 | | $ | 16,376 | | | $ | — | | | $ | — | | | $ | 16,376 | |
As of October 31, 2024, the components of tax basis distributable earnings were as follows:
| | | Global X
Blockchain &
Bitcoin Strategy
ETF | | Global X Bitcoin
Trend Strategy
ETF |
| Undistributed Ordinary Income | | $ | 6,365,250 | | | $ | 24,931 | |
| Capital Loss Carryforwards | | | (3,712,965 | ) | | | (865 | ) |
| Unrealized Appreciation on Investments and Foreign Currency | | | 685,023 | | | | 1,779 | |
| Other Temporary Differences | | | (1 | ) | | | — | |
| Total Distributable Earnings | | $ | 3,337,307 | | | $ | 25,845 | |
For taxable years beginning after December 22, 2010, a Registered Investment Company within the meaning of the 1940 Act is permitted to carry forward net capital losses to offset capital gains realized in later years, and the losses carried forward retain their original character as either long-term or short-term losses.
The Federal tax cost and aggregate gross unrealized appreciation and depreciation on investments held by the Funds at October 31, 2024 were as follows:
| Global X Funds | | Federal Tax
Cost | | Aggregated
Gross
Unrealized
Appreciation | | Aggregated
Gross
Unrealized
Depreciation | | Net Unrealized
Appreciation |
| Global X Blockchain & Bitcoin Strategy ETF | | | $23,962,165 | | | | $1,059,825 | | | | $(374,802 | ) | | | $685,023 | |
| Global X Bitcoin Trend Strategy ETF | | | 2,235,178 | | | | 1,992 | | | | (213 | ) | | | 1,779 | |
The preceding differences between book and tax cost are primarily due to wash sales.
24
Notes to Consolidated Financial Statements (Continued)
October 31, 2024
8. CONCENTRATION OF RISKS
Bitcoin is a relatively new asset with a limited history. It is subject to unique and substantial risks, and historically has been a highly speculative asset and has experienced significant price volatility. While the Funds will not invest directly in bitcoin, the value of the Funds’ investments in Bitcoin Futures and bitcoin funds is subject to fluctuations in the value of bitcoin, which may be highly volatile. The value of bitcoin is determined by supply and demand in the global market, which consists primarily of transactions of bitcoin on electronic exchanges (“Bitcoin Exchanges”). Pricing on Bitcoin Exchanges and/or other venues could drop precipitously for a variety of reasons, including, but not limited to, regulatory changes, a crisis of confidence, a flaw or operational issue in the bitcoin network (a network on which users may exchange bitcoin directly with one another (the “Bitcoin Network”)), or users preferring competing digital assets and cryptocurrencies. The further development of bitcoin as an asset and the growing acceptance and use of bitcoin in the marketplace are subject to a variety of factors that are difficult to evaluate. Currently, there is relatively limited use of bitcoin in the retail and commercial marketplace, which contributes to price volatility. A lack of expansion, or a contraction in the use of bitcoin, may result in increased volatility in its value. Legal or regulatory changes may negatively impact the operation of the Bitcoin Network or its protocols or restrict the ability to use bitcoin. Additionally, bitcoin transactions are irrevocable, and therefore stolen or incorrectly transferred bitcoin may be irretrievable. The realization of any of these risks could result in a decline in the acceptance of bitcoin and consequently a reduction in the value of bitcoin, Bitcoin Futures, and the Funds. Bitcoin is also subject to the risk of fraud, theft and manipulation, as well as security failures and operational or other problems that impact Bitcoin Exchanges. Unlike the exchanges utilized by traditional assets, such as equity and bond securities, Bitcoin Exchanges are largely unregulated. As a result, individuals or groups may engage in fraud and investors in bitcoin may be more exposed to the risk of theft and market manipulation than when investing in more traditional asset classes. Investors in bitcoin may have little or no recourse should such theft, fraud or manipulation occur and could suffer significant losses, which could ultimately impact bitcoin utilization, the price of bitcoin and the value of Funds’ investments with indirect exposure to bitcoin. Additionally, if one or a coordinated group of miners were to gain control of 51% or more of the Bitcoin Network, they would have the ability to manipulate transactions, halt payments and fraudulently obtain bitcoin. A significant portion of bitcoin is held by a small number of holders, who may have the ability to manipulate the price of bitcoin. In addition, Bitcoin Exchanges are subject to the risk of cybersecurity threats and breach, which has occurred in the past and resulted in the theft and/or loss of digital assets, including bitcoin. A risk also exists with respect to malicious actors or previously unknown vulnerabilities in the Bitcoin Network or its protocols, which may adversely affect the value of bitcoin. Shares of some bitcoin funds in which the Funds invests may trade at a premium or discount to the net asset value of the bitcoin fund itself.
Blockchain companies may be adversely impacted by government regulations or economic conditions. Blockchain technology is new and its uses are in many cases untested or
25
Notes to Consolidated Financial Statements (Continued)
October 31, 2024
8. CONCENTRATION OF RISKS (continued)
unclear. These companies may also have significant exposure to fluctuations in the spot prices of digital assets, particularly to the extent that demand for a company’s hardware or services may increase as the spot price of digital assets increase. Blockchain companies typically face intense competition and potentially rapid product obsolescence. In addition, many Blockchain companies store sensitive consumer information and could be the target of cybersecurity attacks and other types of theft, which could have a negative impact on these companies. Access to a given blockchain may require a specific cryptographic key (in effect a string of characters granting unique access to initiate transactions related to specific digital assets) or set of keys, the theft, loss, or destruction of which, either by accident or as a result of the efforts of a third party, could irrevocably impair a claim to the digital assets stored on that blockchain.
Many Blockchain companies currently operate under less regulatory scrutiny than traditional financial services companies and banks, but there is significant risk that regulatory oversight could increase in the future. For example, companies that operate trading platforms and/or exchanges may face heightened regulatory risks associated with their operations. The U.S. Securities and Exchange Commission (the “SEC”) has made several public statements indicating that some cryptocurrency exchanges may be operating as unregistered securities exchanges in violation of applicable regulations. In August 2021, the SEC settled charges with Poloniex for selling digital asset securities between 2017 and 2019 without registering as a national securities exchange. Higher levels of regulation could increase costs and adversely impact the current business models of some Blockchain companies and could even result in the outright prohibition of certain business activities. For example, on September 24, 2021, multiple Chinese regulators issued prohibitions on all cryptocurrency transactions and mining. Any further restrictions imposed by governments (including China or the U.S.) on cryptocurrency related activities may adversely impact Blockchain companies, and in turn the Funds. Blockchain companies could be negatively impacted by disruptions in service caused by hardware or software failure, or by interruptions or delays in service by third-party data center hosting facilities and maintenance providers. Blockchain companies involved in digital assets may face slow adoption rates and be subject to higher levels of regulatory scrutiny in the future, which could severely impact their viability. Blockchain companies, especially smaller companies, tend to be more volatile than companies that do not rely heavily on technology. The customers and/or suppliers of Blockchain companies may be concentrated in a particular country, region or industry. Any adverse event affecting one of these countries, regions or industries could have a negative impact on Blockchain companies.
Cryptocurrency (notably, bitcoin), often referred to as “virtual currency” or “digital currency,” operates as a decentralized, peer-to-peer financial exchange and value storage that is used like money. The Funds will have exposure to bitcoin, indirectly through investment in Bitcoin Futures, and individual Blockchain Companies held by the Funds may have exposure to cryptocurrencies, including cryptocurrencies other than
26
Notes to Consolidated Financial Statements (Continued)
October 31, 2024
8. CONCENTRATION OF RISKS (continued)
bitcoin. Cryptocurrencies operate without central authority or banks and are not backed by any government. Cryptocurrencies may experience very high volatility, and related investment vehicles that invest in cryptocurrencies may be affected by such volatility. Cryptocurrency is not legal tender. Federal, state or foreign governments may restrict the use and exchange of cryptocurrency, and regulation in the U.S. is still developing. Some cryptocurrency have stopped operating and have permanently shut down due to fraud, technical glitches, hackers or malware. Cryptocurrency exchanges are new, largely unregulated, and may be more exposed to fraud. In November 2022, FTX, a Bahamas-based crypto asset exchange, collapsed due to a liquidity crisis of the company’s token, FTT, thus leading FTX to file for bankruptcy. An investigation into the collapse uncovered unauthorized movements and use of client assets to a sister company of FTX, Alameda Research, a crypto asset hedge fund. The collapse of FTX resulted in a ripple effect across the crypto asset industry, with the price of bitcoin falling to the lowest levels in calendar year 2022. Further, some crypto trading platforms may be operating out of compliance with regulation and are, or may become, subject to enforcement actions by regulatory authorities. In June 2023, the SEC charged the owners and operators of Binance, the largest crypto asset exchange in the world, with operating unregistered exchanges, broker-dealers, and clearing agencies; misrepresenting trading controls and oversight of its platform; and the unregistered offer and sale of securities. In November 2023, the SEC similarly charged Payward Inc. and Payward Ventures Inc., together known as Kraken, with operating an unregistered securities exchange, broker, dealer, and clearing agency.
A futures contract may generally be described as an agreement for the future sale by one party and the purchase by another of a specified security or instrument at a specified price and time. The risks of futures contracts include but are not limited to: (1) the Adviser’s ability to predict movements in the prices of individual currencies or securities, fluctuations in markets and movements in interest rates; (2) an imperfect or no correlation between the changes in market value of the currencies or securities and the prices of futures contracts; and (3) there being no guarantee that an active market will exist for the contracts at any particular time. Trading in the cash bitcoin market remains difficult as compared to more traditional cash markets, and in particular, short selling bitcoin remains challenging and costly. As a result of these features of the bitcoin cash market, market makers and arbitrageurs may not be as willing to participate in the Bitcoin Futures market as they are in other futures markets. Each of these factors may increase the likelihood that the price of Bitcoin Futures will be volatile and/or will deviate from the price of bitcoin. Bitcoin Futures may experience significant price volatility. Exchange-specified collateral for Bitcoin Futures is substantially higher than for most other futures contracts, and collateral may be set as a percentage of the value of the contract, which means that collateral requirements for long positions can increase if the price of the contract rises. In addition, futures commission merchants (“FCMs”) may require collateral beyond the exchange’s minimum requirement. FCMs may also restrict trading activity in Bitcoin Futures by imposing position limits, prohibiting short selling of Bitcoin Futures or prohibiting trades where the executing broker
27
Notes to Consolidated Financial Statements (Continued)
October 31, 2024
8. CONCENTRATION OF RISKS (continued)
places a trade on behalf of another broker (so-called “give-up transactions”). Although the Funds will only take long positions in Bitcoin Futures, restrictions on the ability of certain market participants to take short Bitcoin Futures positions may ultimately constrain the Funds’ ability to take long positions in Bitcoin Futures or may impact the price at which the Funds are able to take such positions. Bitcoin Futures are subject to daily limits that may impede a market participant’s ability to exit a position during a period of high volatility.
The Funds may invest in securities of foreign issuers in various countries. These investments may involve certain considerations and risks not typically associated with investments in the United States as a result of, among other factors, the possibility of future political and economic developments, the level of governmental supervision and regulation of securities markets in the respective countries.
The securities markets of emerging market countries are less liquid, subject to greater price volatility, and have a smaller market capitalization than those of U.S. securities markets. In certain countries, there may be fewer publicly traded securities and the market may be dominated by a few issuers or sectors. Issuers and securities markets in such countries are not subject to as extensive and frequent accounting, financial and other reporting requirements or as comprehensive government regulations as are issuers and securities markets in the United States. In particular, the assets and profits appearing on the financial statements of emerging market country issuers may not reflect their financial position or results of operations in the same manner as financial statements for U.S. issuers. Substantially less information may be publicly available about emerging country issuers than is available about issuers in the United States.
The Global X Bitcoin Trend Strategy ETF uses a replication strategy. A replication strategy is an indexing strategy that involves investing in the securities of an underlying index (also known as a secondary index) in approximately the same proportions as in the underlying index. A representative sampling strategy is an indexing strategy that involves investing in a representative sample of securities (including indirect investments through underlying ETFs) that collectively has an investment profile similar to an underlying index in terms of key risk factors, performance attributes and other characteristics. The Fund may utilize a representative sampling strategy with respect to its underlying index when a replication strategy might be detrimental to its shareholders, such as when there are practical difficulties or substantial costs involved in compiling a portfolio of equity securities to follow its underlying index, or, in certain instances, when securities in the underlying index become temporarily illiquid, unavailable or less liquid, or due to legal restrictions.
The Funds may be subject to taxes imposed by countries in which they invest. Such taxes are generally based on either income or gains earned or repatriated. Each Fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or capital gains are earned.
28
Notes to Consolidated Financial Statements (Continued)
October 31, 2024
8. CONCENTRATION OF RISKS (continued)
Please refer to each Fund’s prospectus and statement of additional information for a more complete description of risks.
9. REVERSE SHARE SPLIT
The Board approved a reverse share split of one to four (1:4) of the issued and outstanding shares of the Global X Blockchain & Bitcoin Strategy ETF (the “Reverse Share Split”). The Reverse Share Split was completed after the close of business on December 19, 2022. The effect of this transaction for the Fund was to divide the number of outstanding shares of the Fund by four, resulting in a corresponding increase in the NAV per Share. The capital share activity presented on the Consolidated Statements of Changes in Net Assets and the per share data in the Consolidated Financial Highlights for the period then ended, have been given retroactive effect to reflect this reverse share split. There were no changes in net assets, results of operations or total return as a result of this transaction.
10. CONTRACTUAL OBLIGATION
The Funds enter into contracts in the normal course of business that contain a variety of indemnifications. The Funds’ maximum exposure under these contracts is unknown; however, the Funds have not had prior gains or losses pursuant to these contracts. Management has reviewed the Funds’ existing contracts and expects the risk of loss to be remote.
Pursuant to the Trust’s organizational documents, the Trustees of the Trust and the Trust’s officers are indemnified against certain liabilities that may arise out of the performance of their duties.
11. LOANS OF PORTFOLIO SECURITIES
Each Fund may lend portfolio securities having a market value up to one-third of its total assets. Security loans made pursuant to securities lending agreements with BBH and BNY Mellon are initially required to be secured by collateral equal to at least 102% of the value of domestic equity securities and American Depositary Receipts (“ADRs”) and 105% of the value of foreign equity securities (other than ADRs). Such collateral received in connection with these loans will be cash and can be invested in repurchase agreements, short-term investments or U.S. Treasury obligations, and is recognized in the Consolidated Schedules of Investments and Consolidated Statements of Assets and Liabilities. The obligation to return securities lending collateral is also recognized as a liability in the Consolidated Statements of Assets and Liabilities. It is each Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan.
29
Notes to Consolidated Financial Statements (Continued)
October 31, 2024
11. LOANS OF PORTFOLIO SECURITIES (continued)
Securities pledged as collateral for repurchase agreements held in the Funds are held by BBH or BNY Mellon, as appropriate, and are designated as being held on the Fund’s behalf under a book-entry system. The Funds monitor the adequacy of the collateral on a daily basis and can require the seller to provide additional collateral in the event the market value of the securities pledged falls below the carrying value of the repurchase agreement, including accrued interest. It is each Fund’s policy to only enter into repurchase agreements with banks and other financial institutions which are deemed by the Adviser to be creditworthy. The Funds bear the risk of loss in the event the other party to a repurchase agreement defaults on its obligations and the Fund is prevented from exercising its rights to dispose of the underlying securities received as collateral and the risk of a possible decline in the value of the underlying securities during the period. For financial statement purposes, the Funds record the securities lending collateral (including in repurchase agreements, at value or restricted cash) as an asset and the obligation to return securities lending collateral as a liability on the Consolidated Statements of Assets and Liabilities.
Cash collateral received in connection with securities lending is invested in repurchase agreements and short-term investments by the lending agent. The Funds do not have effective control of the non-cash collateral and therefore it is not disclosed in each Fund’s Schedule of Investments.
Securities lending transactions are entered into by the Funds under the Securities Lending Agreement, which permits a Fund, under certain circumstances such as an event of default, to offset amounts payable by the Fund to the same counterparty against amounts receivable from the counterparty to create a net payment due to or from the Fund.
The following is a summary of securities lending agreements held by the Funds, with cash collateral of overnight maturities and non-cash collateral, which would be subject to offset as of October 31, 2024.
| | | Gross Amount
of Recognized
Assets (Value
of Securities on
Loan) | | Value of
Cash
Collateral
Received(1) | | Value of
Non-Cash
Collateral
Received(1) | | Net Amount |
| Global X Bitcoin Trend Strategy ETF | | $ | 563,324 | | | $ | 563,324 | | | $ | — | | | $ | — | |
| (1) | Collateral and non-cash collateral received in excess of market value of securities on loan is not presented in this table. The total cash collateral received by the Fund is disclosed in the Consolidated Statements of Assets and Liabilities. |
The value of loaned securities and related collateral outstanding at October 31, 2024 are shown in the Consolidated Schedules of Investments. The value of the collateral held may be temporarily less than that required under the lending contract. As of October 31, 2024, the cash collateral was invested in repurchase agreements and short term investments and
30
Notes to Consolidated Financial Statements (Concluded)
October 31, 2024
11. LOANS OF PORTFOLIO SECURITIES (continued)
the non-cash collateral consisted of U.S. Treasury Bills, Notes, Bonds and U.S. Treasury Inflation Indexed Bonds with the following maturities:
| | | Overnight and
Continuous | | <30 Days | | Between
30 & 90
Days | | >90 Days | | Total |
| Global X Bitcoin Trend Strategy ETF | | | | | | | | | | | | | | | | | | | | |
| Repurchase Agreement | | $ | 244,726 | | | $ | — | | | $ | — | | | $ | — | | | $ | 244,726 | |
| Short Term Investment | | | 330,094 | | | | — | | | | — | | | | — | | | | 330,094 | |
| Total | | $ | 574,820 | | | $ | — | | | $ | — | | | $ | — | | | $ | 574,820 | |
12. NEW ACCOUNTING PRONOUNCEMENT
In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update No. 2023-07 (“ASU 2023-07”), Segment Reporting (“Topic 280”). ASU 2023-07 clarifies the guidance in Topic 280, which requires public entities to provide disclosures of significant segment expenses and other segment items. The guidance requires public entities to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually and also applies to public entities with a single reportable segment. Entities are permitted to disclose more than one measure of a segment’s profit or loss if such measures are used by the Chief Operating Decision Maker to allocate resources and assess performance, as long as at least one of those measures is determined in a way that is most consistent with the measurement principles used to measure the corresponding amounts in the consolidated financial statements. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. Management is currently evaluating the implications, if any, of the additional requirements and their impact on a Fund’s financial statements.
13. SUBSEQUENT EVENTS
The Funds have been evaluated by management regarding the need for additional disclosures and/or adjustments resulting from subsequent events. Based on this evaluation, no additional adjustments were required to the financial statements.
31
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Global X Funds and Shareholders of each of the Funds listed in the table below
Opinions on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of assets and liabilities, including the consolidated schedules of investments, of each of the funds listed in the table below (two of the funds constituting Global X Funds, hereafter collectively referred to as the “Funds”) as of October 31, 2024, the related consolidated statements of operations and of changes in net assets for each of the periods indicated in the table below, including the related notes, and the consolidated financial highlights for each of the periods indicated therein (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of each of the Funds listed in the table below as of October 31, 2024, the results of each of their operations for each of the periods indicated in the table below, the changes in each of their net assets for each of the periods indicated in the table below, and each of the financial highlights for each of the periods indicated therein, in conformity with accounting principles generally accepted in the United States of America.
| Global X Blockchain & Bitcoin Strategy ETF (1) |
| Global X Bitcoin Trend Strategy ETF (2) |
| (1) | Consolidated statement of operations for the year ended October 31, 2024, consolidated statement of changes in net assets for each of the two years in the period ended October 31, 2024. |
| (2) | Consolidated statement of operations and consolidated statement of changes in net assets for the period March 20, 2024 (commencement of operations) through October 31, 2024. |
Basis for Opinions
These consolidated financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,
32
Report of Independent Registered Public Accounting Firm (Concluded)
evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our procedures included confirmation of securities owned as of October 31, 2024 by correspondence with the custodian, transfer agent and brokers. We believe that our audits provide a reasonable basis for our opinions.
/s/PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
December 23, 2024
We have served as the auditor of one or more investment companies in Global X Funds since 2016.
33
Notice to Shareholders (unaudited)
For shareholders that do not have an October 31, 2024 tax year end, this notice is for informational purposes only. For shareholders with an October 31, 2024 tax year end, please consult your tax advisor as to the pertinence of this notice. For the fiscal year ended October 31, 2024, the Fund has designated the following items with regard to distributions paid during the year.
| | | Return of Capital | | Long-Term
Capital Gain
Distributions | | Ordinary Income
Distributions | | Total
Distributions | | Qualifying
for Corporate
Dividends
Received
Deduction(1) | | Qualifying
Dividend
Income(2) |
| Global X Blockchain & Bitcoin Strategy ETF |
| | | 0.00% | | 0.00% | | 100.00% | | 100.00% | | 4.35% | | 4.30% |
| Global X Bitcoin Trend Strategy ETF |
| | | 0.00% | | 0.00% | | 100.00% | | 100.00% | | 90.97% | | 90.97% |
(1) Qualifying dividends represent dividends which qualify for the corporate dividends received deduction and is reflected as a percentage of ordinary income distributions (the total of short term capital gain and net investment income distributions).
(2) The percentage in this column represents the amount of “Qualifying Dividend Income” as created by the Jobs and Growth Relief Reconciliation Act of 2003 and its reflected as a percentage of ordinary income distributions (the total of short term capital gain and net investment income distributions). It is the intention of the Fund to designate the maximum amount permitted by law.
| | | | | | | Short Term | | Qualifying | | |
| | | U.S. Government | | Interest Related | | Capital Gain | | Business | | Foreign Tax |
| | | Interest(3) | | Dividends(4) | | Dividends(5) | | Income(6) | | Credit |
| Global X Blockchain & Bitcoin Strategy ETF |
| | | 0.00% | | | 2.73% | | | | 0.00% | | | | 0.00% | | | | 0.00% | |
| Global X Bitcoin Trend Strategy ETF |
| | | 26.14% | | | 13.88% | | | | 0.00% | | | | 0.00% | | | | 0.00% | |
(3) “U.S. Government Interest” represents the amount of interest that was derived from U.S. Government Obligations and distributed during the fiscal year. Generally, interest from direct U.S. Government obligations is exempt from state income tax. However, for shareholders who are residents of California, Connecticut and New York, the statutory threshold requirements were not satisfied to permit exemption of these amounts from state income.
(4) The percentage in this column represents the amount of “Interest Related Dividends” as created by the American Jobs Creation Act of 2004 and is a percentage of net investment income that is exempt from U.S. withholding tax when paid for foreign investors.
(5) The percentage of this column represents the amount of “Short Term Capital Gain Dividend” and is reflected as a percentage of short term capital gain distribution that is exempted from U.S. withholding tax when paid to foreign investors.
(6) The percentage of this column represents that amount of ordinary dividend income that qualified for 20% Business Income Deduction.
The information reported herein may differ from the information and distributions taxable to the shareholders for the calendar year ending December 31, 2024. Complete information will be computed and reported in conjunction with your 2024 Form 1099-DIV.
34
Proxy Voting (Form N-CSR Item 9) (unaudited)
A Special Meeting of Shareholders of the Global X Funds (the “Trust”) was held on August 26, 2024, for the purpose of considering the proposal to elect each of the current Trustees to the Board of Trustees of the Trust. The proposal was approved on August 26, 2024 with the following voting results:
| Trustee | | Shares Voted |
| Charles A. Baker | | | | |
| For | | | 1,000,273,461 | |
| Against | | | 14,064,552 | |
| Abstain | | | 12,508,484 | |
| Toai Chin | | | | |
| For | | | 999,088,606 | |
| Against | | | 14,951,430 | |
| Abstain | | | 12,806,470 | |
| Clifford J. Weber | | | | |
| For | | | 1,000,103,865 | |
| Against | | | 14,142,432 | |
| Abstain | | | 12,600,202 | |
| Ryan O’Connor | | | | |
| For | | | 1,002,852,035 | |
| Against | | | 11,528,537 | |
| Abstain | | | 12,465,958 | |
35
Notes
36
605 Third Avenue, 43rd floor
New York, NY 10158
1-888-493-8631
www.globalxetfs.com
Investment Adviser and Administrator:
Global X Management Company LLC
605 Third Avenue, 43rd floor
New York, NY 10158
Distributor:
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, PA 19456
Sub-Administrator:
SEI Investments Global Funds Services
One Freedom Valley Drive
Oaks, PA 19456
Counsel for Global X Funds and the Independent Trustees:
Stradley Ronon Stevens & Young, LLP
2000 K Street, N.W.
Suite 700
Washington, DC 20006
Custodians and Transfer Agents:
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Independent Registered Public Accounting Firm:
PricewaterhouseCoopers LLP
Two Commerce Square
Suite 1800
2001 Market Street
Philadelphia, PA 19103
This information must be preceded or accompanied by a current prospectus for the Funds described.
GLX-AR-010-0400
| Item 8. | Changes in and Disagreements with Accountants for Open-End Management Investment Companies. |
There were no changes in or disagreements with accountants on accounting and financial disclosure during the period covered by the report.
| Item 9. | Proxy Disclosures for Open-End Management Investment Companies. |
The disclosure regarding any matters submitted during the period covered by the report to a vote of shareholders, if applicable, is included as part of the financial statements filed under Item 7 of this form.
| Item 10. | Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies. |
| (1) | No remuneration was paid by the company during the period covered by the report to any Trustees on the company’s Board of Trustees for regular compensation. |
| (2) | No remuneration was paid by the company during the period covered by the report to any Trustees on the company’s Board of Trustees for special compensation. |
| (3) | No remuneration was paid by the company during the period covered by the report to any Officers of the company. |
| (4) | No remuneration was paid by the company during the period covered by the report to any Officer or Trustee of the company who is an affiliated person. |
| Item 11. | Statement Regarding Basis for Approval of Investment Advisory Contract. |
The disclosure regarding the approval of any investment advisory contract approved during the registrant’s most recent fiscal half-year, if applicable, is included as part of the financial statements filed under Item 7 of this form.
| Item 12. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable to open-end management investment companies.
| Item 13. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable to open-end management investment companies.
| Item 14. | Purchases of Equity Securities by Closed-End Management Company and Affiliated Purchasers. |
Not applicable to open-end management investment companies.
| Item 15. | Submission of Matters to a Vote of Security Holders. |
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of directors.
| Item 16. | Controls and Procedures. |
(a) The certifying officers, whose certifications are included herewith, have evaluated the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act) within 90 days of the filing date of this report. In their opinion, based on their evaluation, the registrant’s disclosure controls and procedures are adequately designed, and are operating effectively to ensure, that information required to be disclosed by the registrant in the reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
| Item 17. | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. |
Not applicable.
| Item 18. | Recovery of Erroneously Awarded Compensation. |
(a) Not applicable.
(a) Not applicable.
(a)(1) Code of Ethics attached hereto.
(a)(2) Not applicable.
(a)(3) A separate certification for the principal executive officer and the principal financial officer of the registrant, as required by Rule 30a-2(a) under the Act (17 CFR § 270.30a-2(a)), are filed herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended, also accompany this filing as exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| (Registrant) | Global X Funds | |
| | | |
| By (Signature and Title) | /s/ Ryan O’Connor | |
| | Ryan O’Connor
Principal Executive Officer | |
Date: January 6, 2025
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By (Signature and Title) | /s/ Ryan O’Connor | |
| | Ryan O’Connor
Principal Executive Officer | |
Date: January 6, 2025
| By (Signature and Title) | /s/ Eric Olsen | |
| | Eric Olsen
Principal Financial Officer | |
Date: January 6, 2025
iso4217:USDxbrli:shares
