UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM N-CSR
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CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBER 811-06400
THE GLOBAL X FUNDS
(Exact name of registrant as specified in charter)
----------
410 Park Avenue, 4th Floor
New York, NY 10022
(Address of principal executive offices) (Zip code)
SEI Investments Global Fund Services
One Freedom Valley Drive
Oaks, PA 19456
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (888) 493-8631
DATE OF FISCAL YEAR END: OCTOBER 31, 2009
DATE OF REPORTING PERIOD: OCTOBER 31, 2009
ITEM 1. REPORTS TO STOCKHOLDERS.
(GLOBAL X FUNDS LOGO)
The World in your Hands
GLOBAL X/INTERBOLSA FTSE COLOMBIA 20 ETF
GLOBAL X FTSE NORDIC 30 ETF
ANNUAL REPORT
OCTOBER 31, 2009
(GLOBAL X FUNDS LOGO)
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TABLE OF CONTENTS
Management Discussion of Fund Performance 1
Schedules of Investments
Global X\InterBolsa FTSE Colombia 20 ETF 5
Global X FTSE Nordic 30 ETF 8
Statements of Assets and Liabilities 12
Statements of Operations 13
Statements of Changes
Global X\InterBolsa FTSE Colombia 20 ETF 14
Global X FTSE Nordic 30 ETF 15
Financial Highlights
Global X\InterBolsa FTSE Colombia 20 ETF 16
Global X FTSE Nordic 30 ETF 17
Notes to Financial Statements 18
Report of Independent Registered Public Accounting Firm 28
Disclosure of Fund Expenses 29
Supplemental Information 31
Board Considerations in Approving the Investment Advisory Agreement 33
Trustees and Officers of the Trust 36
The Funds will file their complete schedules of Fund holdings with the
Securities and Exchange Commission for the first and third quarters of each
fiscal year on Form N-Q within sixty days after the end of the period. The
Funds' Forms N-Q will be available on the Commission's website at
http://www.sec.gov, 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, will be available (i)
without charge, upon request, by calling 1-888-GXFund-1; and (ii) on the
Commission's website at http://www.sec.gov.
(GLOBAL X FUNDS LOGO)
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MANAGEMENT DISCUSSION OF FUND PERFORMANCE
GLOBAL X/INTERBOLSA FTSE COLOMBIA 20 ETF
The Global X/InterBolsa FTSE Colombia 20 ETF (the "Fund") seeks to provide
investment results that correspond generally to the price and yield performance,
before fees and expenses, of the Global X/InterBolsa 20 Index (the "Index"). The
Fund generally seeks to replicate the Index but may at times invest in a
representative sample of securities that collectively has an investment profile
similar to the index and as a result may or may not hold all the securities that
are included in the index.
The Index is a market capitalization-weighted index of the 20 most liquid stocks
in the Colombian market. The Index is designed to measure broad based equity
market performance in Colombia. The Fund is the first ETF globally focused
exclusively on Colombia.
For the period from the Fund's commencement date on February 5, 2009 through
October 31, 2009 (the "reporting period"), the Fund increased 85.60%, while the
Index increased 85.63%. The Fund commenced operations with a net asset value of
$15.00 per share on February 5, 2009 and ended the period with a net asset value
of $27.84 on October 31, 2009.
Colombia was among the world's top performing countries for the reporting
period. None of the Fund's twenty holdings as of October 31, 2009 decreased in
value during the reporting period. The best performers were Compania Colombiana
de Inversiones S.A. and Corporacion Financiera Colombiana S.A., both producing
returns of over 100%. The worst performer was Textiles Fabricato Tejicondor
S.A., which was flat for the reporting period, followed by Compania Colombiana
de Tejidos S.A., which nevertheless generated double-digit returns.
GLOBAL X FTSE NORDIC 30 ETF
The Global X FTSE Nordic 30 ETF (the "Fund") seeks to provide investment results
that correspond generally to the price and yield performance, before fees and
expenses, of the FTSE Nordic 30 Index (the "Index"). The Fund generally seeks to
replicate the index but may at times invest in a representative sample of
securities that collectively has an investment profile similar to the index and
as a result may or may not hold all the securities that are included in the
index.
The Index is a market capitalization-weighted index of the 30 largest and most
liquid stocks in Sweden, Denmark, Norway and Finland. The Index is designed to
measure broad based equity market performance in these countries. The Fund is
the nation's first ETF focused exclusively on the Nordic region.
1
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MANAGEMENT DISCUSSION OF FUND PERFORMANCE
For the period from the Fund's commencement date on August 17, 2009 through
October 31, 2009 (the "reporting period"), the Fund increased 10.83%, while the
Index increased 11.60%. The Fund commenced operations with a net asset value of
$14.50 per share on August 17, 2009 and ended the period with a net asset value
of $16.07 on October 31, 2009.
Twenty-eight of the Fund's thirty holdings as of October 31, 2009 increased in
value for the reporting period, led by Telenor ASA and DnB NOR ASA, which
returned 44.99% and 35.28% respectively. The worst performers were Renewable
Energy Corp. ASA and Vestas Wind Systems A/S, which returned -14.88% and -4.34%
respectively.
2
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MANAGEMENT DISCUSSION OF FUND PERFORMANCE
GLOBAL X/ INTERBOLSA FTSE COLOMBIA 20 ETF
GROWTH OF A $10,000 INVESTMENT
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDED OCTOBER 31, 2009*
Cumulative Inception to Date
85.60%
(PERFORMANCE GRAPH)
Initial Investment Date 2/5/09 Apr 09 Oct 09
- ------------------------ ------- ------- -------
Global X/InterBolsa FTSE
Columbia 20 ETF Fund $10,000 $11,787 $18,560
FSTE Columbia 20 Index $10,000 $11,675 $18,563
* FUND COMMENCED OPERATIONS ON FEBRUARY 5, 2009.
THE PERFORMANCE DATA QUOTED HEREIN REPRESENTS PAST PERFORMANCE AND THE RETURN
AND VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT, WHEN REDEEMED,
MAY BE WORTH LESS THAN ITS ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE OF
FUTURE PERFORMANCE AND SHOULD NOT BE CONSIDERED AS A REPRESENTATION OF THE
FUTURE RESULTS OF THE FUND. THE FUND'S PERFORMANCE ASSUMES THE REINVESTMENT OF
ALL DIVIDENDS AND ALL CAPITAL GAINS. INDEX RETURNS ASSUME REINVESTMENT OF
DIVIDENDS AND, UNLIKE A FUND'S RETURNS, DO NOT REFLECT ANY FEES OR EXPENSES. IF
SUCH FEES AND EXPENSES WERE INCLUDED IN THE INDEX RETURNS, THE PERFORMANCE WOULD
HAVE BEEN LOWER. PLEASE NOTE THAT ONE CANNOT INVEST DIRECTLY IN AN UNMANAGED
INDEX.
THERE ARE NO ASSURANCES THAT THE FUND WILL MEET ITS STATED OBJECTIVES.
THE FUND'S HOLDINGS AND ALLOCATIONS ARE SUBJECT TO CHANGE AND SHOULD NOT BE
CONSIDERED RECOMMENDATIONS TO BUY INDIVIDUAL SECURITIES.
RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
SEE DEFINITION OF COMPARATIVE INDICES IN MANAGEMENT DISCUSSION OF FUND
PERFORMANCE.
3
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MANAGEMENT DISCUSSION OF FUND PERFORMANCE
GLOBAL X FTSE NORDIC 30 ETF
GROWTH OF A $10,000 INVESTMENT
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDED OCTOBER 31, 2009*
Cumulative Inception to Date
10.83%
(PERFORMANCE GRAPH)
Initial Investment Date 8/17/09 Oct 09
- -------------------------------- ------- -------
Global X FTSE Nordic 30 ETF Fund $10,000 $11,083
FSTE Nordic 30 Index $10,000 $11,160
* FUND COMMENCED OPERATIONS ON AUGUST 17, 2009.
THE PERFORMANCE DATA QUOTED HEREIN REPRESENTS PAST PERFORMANCE AND THE RETURN
AND VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT, WHEN REDEEMED,
MAY BE WORTH LESS THAN ITS ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE OF
FUTURE PERFORMANCE AND SHOULD NOT BE CONSIDERED AS A REPRESENTATION OF THE
FUTURE RESULTS OF THE FUND. THE FUND'S PERFORMANCE ASSUMES THE REINVESTMENT OF
ALL DIVIDENDS AND ALL CAPITAL GAINS. INDEX RETURNS ASSUME REINVESTMENT OF
DIVIDENDS AND, UNLIKE A FUND'S RETURNS, DO NOT REFLECT ANY FEES OR EXPENSES. IF
SUCH FEES AND EXPENSES WERE INCLUDED IN THE INDEX RETURNS, THE PERFORMANCE WOULD
HAVE BEEN LOWER. PLEASE NOTE THAT ONE CANNOT INVEST DIRECTLY IN AN UNMANAGED
INDEX.
THERE ARE NO ASSURANCES THAT THE FUND WILL MEET ITS STATED OBJECTIVES.
THE FUND'S HOLDINGS AND ALLOCATIONS ARE SUBJECT TO CHANGE AND SHOULD NOT BE
CONSIDERED RECOMMENDATIONS TO BUY INDIVIDUAL SECURITIES.
RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY
ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
SEE DEFINITION OF COMPARATIVE INDICES IN MANAGEMENT DISCUSSION OF FUND
PERFORMANCE.
4
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SCHEDULE OF INVESTMENTS
GLOBAL X/ INTERBOLSA FTSE COLOMBIA 20 ETF
OCTOBER 31, 2009
SECTOR WEIGHTINGS (UNAUDITED)+:
(BAR CHART)
Financials 47.2%
Energy 18.6%
Utilities 10.2%
Consumer Staples 9.0%
Materials 8.5%
Short-Term Investments 2.9%
Telecommunication Services 1.8%
Consumer Discretionary 1.3%
Industrials 0.5%
+ Percentages based on total investments.
COMMON STOCK -- 98.2++%
SHARES VALUE
----------- ----------
COLOMBIA -- 98.2%
Consumer Discretionary -- 1.3%
Cia Colombiana del Tejidos *.................. 109,880,512 $ 53,399
Textiles Fabricato Tejicondor *............... 3,726,064 39,202
----------
92,601
----------
Consumer Staples -- 9.1%
Almacenes Exito............................... 21,906 170,551
Almacenes Exito * (A)......................... 16,657 129,684
Grupo Nacional de Chocolates.................. 31,674 330,705
----------
630,940
----------
Energy -- 18.8%
Ecopetrol ADR................................. 50,782 1,309,668
----------
Financials -- 47.8%
Banco de Bogota............................... 21,094 338,180
BanColombia ADR............................... 36,555 1,446,847
Bolsa de Valores de Colombia.................. 11,205,715 157,756
Cia Colombiana de Inversiones................. 14,066 341,784
Financiera Colombiana......................... 29,331 326,227
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
5
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SCHEDULE OF INVESTMENTS (CONTINUED)
GLOBAL X/ INTERBOLSA FTSE COLOMBIA 20 ETF
OCTOBER 31, 2009
COMMON STOCK -- CONTINUED
SHARES VALUE
----------- ----------
Financials -- continued
Grupo Aval Acciones y Valores.................. 698,170 $ 258,491
Grupo de Inversiones Suramericana.............. 28,191 317,784
Helm Bank...................................... 339,159 73,405
Interbolsa..................................... 56,885 67,401
----------
3,327,875
----------
Industrials -- 0.5%
Tableros y Maderas de Caldas................... 11,508,923 32,981
----------
Materials -- 8.6%
Cementos Argos................................. 62,569 313,472
Inversiones Argos.............................. 37,562 285,667
----------
599,139
----------
Telecommunication Services -- 1.8%
Empresa de Telecomunicaciones de Bogota........ 256,278 123,902
----------
Utilities -- 10.3%
Interconexion Electrica........................ 54,682 318,339
Isagen......................................... 379,175 397,982
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716,321
----------
TOTAL COLOMBIA.................................... 6,833,427
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TOTAL COMMON STOCK
(Cost $5,300,463).............................. 6,833,427
==========
TIME DEPOSIT -- 2.9%
Brown Brothers, 0.03%.......................... 202,133 202,133
----------
TOTAL CASH EQUIVALENT
(Cost $202,133)................................ 202,133
==========
TOTAL INVESTMENTS -- 101.1%
(Cost $5,502,596).............................. $7,035,560
==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
6
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SCHEDULE OF INVESTMENTS (CONTINUED)
GLOBAL X/ INTERBOLSA FTSE COLOMBIA 20 ETF
OCTOBER 31, 2009
The following is a summary of inputs used as of October 31, 2009 in valuing the
Fund's investments carried at value (See note 2 for full description of the
levels):
INVESTMENTS IN
SECURITIES LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
- -------------- ---------- -------- ------- -------------
Common Stock $6,703,743 $129,684 $-- $6,833,427
Time Deposit 202,133 -- -- 202,133
---------- -------- --- ----------
Total Investments
in Securities $6,905,876 $129,684 $-- $7,035,560
========== ======== === ==========
PERCENTAGES ARE BASED ON NET ASSETS OF $6,960,054.
++ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING PURPOSES.
* NON-INCOME PRODUCING SECURITY DURING THE PERIOD.
(A) SECURITY IS FAIR VALUED USING METHODS DETERMINED IN GOOD FAITH BY THE FAIR
VALUE COMMITTEE OF THE FUND. THE TOTAL VALUE OF SUCH SECURITIES AS OF
OCTOBER 31, 2009, WAS $129,684 AND REPRESENTED 1.86% OF NET ASSETS.
ADR -- AMERICAN DEPOSITARY RECEIPT
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
7
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SCHEDULE OF INVESTMENTS
GLOBAL X FTSE NORDIC 30 ETF
OCTOBER 31, 2009
SECTOR WEIGHTINGS (UNAUDITED)+:
(BAR CHART)
Financials 29.1%
Industrials 20.3%
Information Technology 13.9%
Energy 7.7%
Health Care 7.7%
Materials 6.5%
Telecommunication Services 6.1%
Consumer Discretionary 3.9%
Utilities 2.5%
Consumer Staples 2.1%
Short-Term Investments 0.2%
+ Percentages based on total investments.
COMMON STOCK -- 100.0%
SHARES VALUE
------ ----------
DENMARK-- 19.7%
Consumer Staples -- 2.1%
Carlsberg, Cl B ................................. 1,000 $ 70,587
----------
Financials -- 3.9%
Danske Bank ..................................... 5,600 129,824
----------
Health Care -- 7.7%
Novo Nordisk ADR ................................ 4,200 261,030
----------
Industrials -- 6.0%
A P Moller - Maersk, Cl B 13 89,450
Vestas Wind Systems * ........................... 1,600 113,413
----------
202,863
----------
TOTAL DENMARK ...................................... 664,304
----------
FINLAND-- 15.3%
Financials -- 3.3%
Sampo, Cl A ..................................... 4,600 110,439
----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
8
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SCHEDULE OF INVESTMENTS (CONTINUED)
GLOBAL X FTSE NORDIC 30 ETF
OCTOBER 31, 2009
COMMON STOCK -- CONTINUED
SHARES VALUE
------ ----------
Industrials -- 1.4%
Kone, Cl B ...................................... 1,300 $ 48,672
----------
Information Technology -- 6.6%
Nokia ADR ....................................... 17,700 223,197
----------
Materials -- 1.5%
UPM-Kymmene ..................................... 4,200 50,541
----------
Utilities -- 2.5%
Fortum .......................................... 3,600 85,424
----------
TOTAL FINLAND ...................................... 518,273
----------
NORWAY-- 18.8%
Energy -- 7.8%
Seadrill ........................................ 1,000 20,887
Statoil ADR ..................................... 10,200 241,332
----------
262,219
----------
Financials -- 2.7%
DnB* ............................................ 7,900 90,989
----------
Industrials -- 2.7%
Orkla ........................................... 8,200 76,186
Renewable Energy * .............................. 2,600 15,611
----------
91,797
----------
Materials -- 3.1%
Norsk Hydro* .................................... 7,200 47,468
Yara International .............................. 1,700 56,588
----------
104,056
----------
Telecommunication Services -- 2.5%
Telenor* ........................................ 6,600 85,468
----------
TOTAL NORWAY ....................................... 634,529
----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
9
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SCHEDULE OF INVESTMENTS (CONTINUED)
GLOBAL X FTSE NORDIC 30 ETF
OCTOBER 31, 2009
COMMON STOCK -- CONTINUED
SHARES VALUE
------ ----------
SWEDEN-- 46.2%
Consumer Discretionary -- 3.9%
Hennes & Mauritz, Cl B .......................... 2,300 $ 132,303
----------
Financials -- 19.4%
Investor, Cl B .................................. 3,600 64,663
Nordea Bank ..................................... 32,100 352,327
Skandinaviska Enskilda Banken, Cl A ............. 17,000 106,418
Svenska Handelsbanken, Cl A* .................... 4,900 129,325
----------
652,733
----------
Industrials -- 10.1%
Atlas Copco, Cl A ............................... 5,000 68,732
Sandvik ......................................... 9,500 107,419
SKF, Cl B ....................................... 3,200 51,658
Volvo, Cl B ..................................... 11,600 112,274
----------
340,083
----------
Information Technology -- 7.3%
Ericsson ADR .................................... 23,800 247,520
----------
Materials -- 1.9%
Svenska Cellulosa, Cl B ......................... 4,700 65,569
----------
Telecommunication Services -- 3.6%
TeliaSonera ..................................... 17,900 119,900
----------
TOTAL SWEDEN ....................................... 1,558,108
----------
TOTAL COMMON STOCK
(Cost $3,110,018) ............................... 3,375,214
==========
TIME DEPOSIT -- 0.2%
Brown Brothers, 0.03% ........................... 6,509 6,509
----------
TOTAL CASH EQUIVALENT
(Cost $6,509) ................................... 6,509
==========
TOTAL INVESTMENTS-- 100.2%
(Cost $3,116,527) ............................... $3,381,723
==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
10
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SCHEDULE OF INVESTMENTS (CONTINUED)
GLOBAL X FTSE NORDIC 30 ETF
OCTOBER 31, 2009
The following is a summary of inputs used as of October 31, 2009 in valuing the
Fund's investments carried at value (See note 2 for full description of the
levels):
INVESTMENTS IN SECURITIES LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
- ------------------------- ---------- ------- ------- -------------
Common Stock $3,375,214 $-- $-- $3,375,214
Time Deposit 6,509 -- -- 6,509
---------- --- --- ----------
Total Investments in Securities $3,381,723 $-- $-- $3,381,723
========== === === ==========
PERCENTAGES ARE BASED ON NET ASSETS OF $3,374,644.
* NON-INCOME PRODUCING SECURITY DURING THE PERIOD.
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
11
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STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 2009
GLOBAL X/
INTERBOLSA
FTSE GLOBAL X
COLOMBIA 20 FTSE NORDIC
ETF 30 ETF
----------- -----------
ASSETS:
Cost of Investments $5,502,596 $3,116,527
---------- ----------
Investments at Value $7,035,560 $3,381,723
Foreign Currency at Value (Cost $25,937, $0) 25,937 --
Dividend and Interest Receivable 3,336 --
Unrealized Appreciation on Spot Currency
Contracts 2,058 --
Receivable for Investment Securities Sold -- 18,140
---------- ----------
TOTAL ASSETS 7,066,891 3,399,863
---------- ----------
LIABILITIES:
Payable for Investment Securities Purchased 99,502 --
Foreign Currency at Value (Proceeds $0, $22,341) -- 22,341
Payable due to Investment Adviser 3,567 1,378
Other Accrued Expenses 3,768 1,500
---------- ----------
TOTAL LIABILITIES 106,837 25,219
---------- ----------
NET ASSETS $6,960,054 $3,374,644
========== ==========
NET ASSETS CONSIST OF:
Paid-in Capital $5,304,500 $3,109,401
Undistributed Net Investment Income (Loss) 116,542 (2,006)
Accumulated Net Realized Gain on Investments 3,547 2,157
Net Unrealized Appreciation on Investments 1,532,964 265,196
Net Unrealized Appreciation (Depreciation) on
Foreign Currency Translations 2,501 (104)
---------- ----------
NET ASSETS $6,960,054 $3,374,644
========== ==========
Outstanding Shares of Beneficial Interest
(unlimited authorization -- no par value) 250,000 210,000
Net Asset Value, Offering and Redemption Price
Per Share $ 27.84 $ 16.07
========== ==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
12
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STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED OCTOBER 31, 2009
GLOBAL X/
INTERBOLSA GLOBAL X
FTSE COLOMBIA FTSE NORDIC
20 ETF* 30 ETF**
------------- -----------
INVESTMENT INCOME:
Dividend Income $ 90,957 $ --
Interest Income 15 1
Less: Foreign Taxes Withheld (2,163) --
---------- --------
TOTAL INVESTMENT INCOME 88,809 1
---------- --------
EXPENSES:
Supervision and Administration Fees(1) 15,892 2,690
Custodian Fees 4,206 --
---------- --------
TOTAL EXPENSES 20,098 2,690
---------- --------
NET INVESTMENT INCOME (LOSS) 68,711 (2,689)
---------- --------
NET REALIZED GAIN ON:
Investments 3,547 2,575
Foreign Currency Transactions 47,831 265
---------- --------
NET REALIZED GAIN ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS 51,378 2,840
---------- --------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION ) ON:
Investments 1,532,964 265,196
Foreign Currency Transactions 2,501 (104)
---------- --------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS 1,535,465 265,092
---------- --------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS 1,586,843 267,932
---------- --------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $1,655,554 $265,243
========== ========
* THE FUND COMMENCED OPERATIONS ON FEBRUARY 5, 2009.
** THE FUND COMMENCED OPERATIONS ON AUGUST 17, 2009.
(1) THE SUPERVISION AND ADMINISTRATION FEES REFLECT THE SUPERVISORY AND
ADMINISTRATIVE FEE, WHICH INCLUDES FEES PAID BY THE FUNDS FOR THE
INVESTMENT ADVISORY SERVICES PROVIDED BY THE ADVISER.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
13
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STATEMENT OF CHANGES IN NET ASSETS
GLOBAL X/ INTERBOLSA FTSE COLOMBIA 20 ETF
PERIOD ENDED
OCTOBER 31,
2009 *
------------
OPERATIONS:
Net Investment Income $ 68,711
Net Realized Gain on Investments and Foreign Currency
Transactions 51,378
Net Change in Unrealized Appreciation (Depreciation) on
Investments and Foreign Currency Transactions 1,535,465
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 1,655,554
----------
CAPITAL SHARE TRANSACTIONS:
Issued 5,304,500
----------
INCREASE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS 5,304,500
----------
TOTAL INCREASE IN NET ASSETS 6,960,054
----------
NET ASSETS:
Beginning of Period --
----------
End of Period (Includes undistributed net investment income of
$116,542) $6,960,054
==========
SHARE TRANSACTIONS:
Issued 250,000
----------
NET INCREASE IN SHARES OUTSTANDING FROM SHARE TRANSACTIONS 250,000
==========
* THE FUND COMMENCED OPERATIONS ON FEBRUARY 5, 2009.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
14
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STATEMENT OF CHANGES IN NET ASSETS
GLOBAL X FTSE NORDIC 30 ETF
PERIOD ENDED
OCTOBER 31,
2009*
------------
OPERATIONS:
Net Investment Loss $ (2,689)
Net Realized Gain on Investments and Foreign Currency
Transactions 2,840
Net Change in Unrealized Appreciation (Depreciation) on
Investments and Foreign Currency Transactions 265,092
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 265,243
----------
CAPITAL SHARE TRANSACTIONS:
Issued 3,109,401
----------
INCREASE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS 3,109,401
----------
TOTAL INCREASE IN NET ASSETS 3,374,644
----------
NET ASSETS:
Beginning of Period --
----------
End of Period (Includes accumulated net investment
loss of $2,006) $3,374,644
==========
SHARE TRANSACTIONS:
Issued 210,000
----------
NET INCREASE IN SHARES OUTSTANDING FROM SHARE TRANSACTIONS 210,000
==========
* THE FUND COMMENCED OPERATIONS ON AUGUST 17, 2009.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
15
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FINANCIAL HIGHLIGHTS
GLOBAL X/INTERBOLSA FTSE COLOMBIA 20 ETF
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
PERIOD ENDED
OCTOBER 31,
2009*
------------
Net Asset Value,
Beginning of Period $ 15.00
-------
Income from
Investment Operations:
Net Investment Income(1) 0.50
Net Realized and Unrealized Gains on Investments 12.34
-------
Total from Investment Operations 12.84
-------
Dividends and Distributions:
Net Investment Income --
Net Realized Gains --
-------
Total from Investment Operations --
-------
Net Asset Value, End of Period $ 27.84
=======
Total Return(2) 85.60%
=======
Net Assets, End of Period (000) $ 6,960
Ratio of Net Expenses to Average Net Assets 0.86%+
Ratio of Net Investment Income to Average Net Assets 2.93%+
Portfolio Turnover Rate 1.94%
* THE FUND COMMENCED OPERATIONS ON FEBRUARY 5, 2009.
(1) PER SHARE CALCULATIONS WERE CALCULATED USING AVERAGE SHARES.
(2) TOTAL RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
RETURNS SHOWN DO NOT REFLECT THE DEDUCTIONS OF TAXES THAT A SHAREHOLDER
WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
+ ANNUALIZED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
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FINANCIAL HIGHLIGHTS
GLOBAL X FTSE NORDIC 30 ETF
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
PERIOD ENDED
OCTOBER 31,
2009*
------------
Net Asset Value,
Beginning of Period $14.50
------
Income from Investment Operations:
Net Investment Loss(1) (0.02)
Net Realized and Unrealized Gains on Investments 1.59
------
Total from Investment Operations 1.57
------
Dividends and Distributions :
Net Investment Income --
Net Realized Gains --
------
Total from Investment Operations --
------
Net Asset Value, End of Period $16.07
======
Total Return(2) 10.83%
======
Net Assets, End of Period (000) $3,375
Ratio of Net Expenses to Average Net Assets 0.50%+
Ratio of Net Investment Loss to Average Net Assets (0.50)%+
Portfolio Turnover Rate 0.70%
* THE FUND COMMENCED OPERATIONS ON AUGUST 17, 2009.
(1) PER SHARE CALCULATIONS WERE CALCULATED USING AVERAGE SHARES.
(2) TOTAL RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
RETURNS SHOWN DO NOT REFLECT THE DEDUCTIONS OF TAXES THAT A SHAREHOLDER
WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
+ ANNUALIZED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
17
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NOTES TO FINANCIAL STATEMENTS
October 31, 2009
1. ORGANIZATION
The Global X Funds (the "Trust") is a Delaware Statutory Trust formed on March
6, 2008. The Trust is registered with the Securities and Exchange Commission
under the Investment Company Act of 1940, as amended, as an open-end management
investment company with nineteen investment portfolios: Global X FTSE Nordic 30
ETF, Global X FTSE Denmark 30 ETF, Global X FTSE Finland 30 ETF, Global X FTSE
Norway 30 ETF, Global X FTSE Argentina 20 ETF, Global X/InterBolsa FTSE Colombia
20 ETF, Global X FTSE Egypt 30 ETF, Global X FTSE Peru 20 ETF, Global X FTSE
Philippines 30 ETF, Global X FTSE Poland 30 ETF, Global X FTSE United Arab
Emirates 20 ETF, Global X Emerging Africa NRX 40 ETF, Global X Pakistan KSE30
ETF, Global X China Consumer ETF, Global X China Energy ETF, Global X China
Financials ETF, Global X China Industrials ETF, Global X China Materials ETF and
Global X China Technology ETF. As of October 31, 2009, only the Global
X/InterBolsa FTSE Colombia 20 ETF and the Global X FTSE Nordic 30 ETF (the
"Funds") are operational. The Funds seek to provide investment results that
correspond generally to the price and yield performance, before fees and
expenses, of its underlying index. Global X Management Company LLC (the
"Adviser"), a Delaware Limited Liability Company, serves as the investment
adviser and the administrator for the Fund. Subject to the supervision of the
Board of Trustees (the "Board"), the Adviser is responsible for managing the
investment activities of the Fund, the Funds' business affairs and other
administrative matters.
2. SIGNIFICANT ACCOUNTING POLICIES
FINANCIAL ACCOUNTING STANDARDS BOARD ("FASB") LAUNCHES ACCOUNTING STANDARDS
CODIFICATION
The FASB has issued FASB ASC 105 (formerly FASB Statement No. 168), The "FASB
Accounting Standards Codification(TM)" and the Hierarchy of Generally Accepted
Accounting Principles ("GAAP") ("ASC 105"). ASC 105 established the FASB
Accounting Standards Codification(TM) ("Codification" or "ASC") as the single
source of authoritative GAAP recognized by the FASB to be applied by
nongovernmental entities. Rules and interpretive releases of the Securities and
Exchange Commission ("SEC") under authority of federal securities laws are also
sources of authoritative GAAP for SEC registrants. The Codification supersedes
all existing non-SEC accounting and reporting standards. All other
non-grandfathered, non-SEC accounting literature not included in the
Codification will become non-authoritative.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 2009
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Following the Codification, the FASB will not issue new standards in the form of
Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts.
Instead, it will issue Accounting Standards Updates, which will serve to update
the Codification, provide background information about the guidance and provide
the basis for conclusions on the changes to the Codification.
GAAP is not intended to be changed as a result of the FASB's Codification
project, but it will change the way the guidance is organized and presented. As
a result, these changes will have a significant impact on how companies
reference GAAP in their financial statements and in their accounting policies
for financial statements issued for interim and annual periods ending after
September 15, 2009. The Funds have implemented the Codification as of October
31, 2009.
The following is a summary of the Significant Accounting Policies followed by
the Funds.
USE OF ESTIMATES -- The preparation of financial statements in conformity with
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 differ from those estimates, and could have a
material impact to the Funds.
SECURITY VALUATION -- Securities listed on a securities exchange, market or
automated quotation system for which quotations are readily available (except
for securities traded on 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 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 (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. 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 may be valued at their amortized cost, which
approximates market value. The prices for foreign securities are reported in
local currency and converted to U.S. dollars using currency exchange rates.
Prices for most securities held in the Funds are
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 2009
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
Securities for which market prices are not "readily available" are valued in
accordance with Fair Value Procedures established by the Board. The Funds' Fair
Value Procedures are implemented through a Fair Value Committee (the
"Committee") designated by the Board. Some of the more common reasons that may
necessitate that a security be valued using Fair Value Procedures include: the
security's trading has been halted or suspended; the security has been de-listed
from a national 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. When a security is valued in
accordance with the Fair Value Procedures, the Committee will determine the
value after taking into consideration relevant information reasonably available
to the Committee.
For securities that principally trade on a foreign market or exchange, a
significant gap in time can exist between the time of a particular security's
last trade and the time at which the Funds calculated their net asset value. The
closing prices of such securities may no longer reflect their market value at
the time the Funds calculated net asset value if an event that could materially
affect the value of those securities (a "Significant Event") has occurred
between the time of the security's last close and the time that the Funds
calculate net asset value. A Significant Event may relate to a single issuer or
to an entire market sector. 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 net asset
value, it may request that a Committee meeting be called. In addition, the
Funds' Sub-administrator, SEI Investments Global Fund Services ("SEIGFS"),
monitors price movements among certain selected indices, securities and/or
baskets of securities that may be an indicator that the closing prices received
earlier from foreign exchanges or markets may not reflect market value at the
time the Funds calculate net asset value. If price movements in a monitored
index or security exceed levels established by the administrator, the
administrator notifies the Adviser that such limits have been exceeded. In such
event, the Adviser makes the determination whether a Committee meeting should be
called based on the information provided.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 2009
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
In accordance with the authoritative guidance on fair value measurements and
disclosure under GAAP, ASC 820 (formerly FASB Statement No. 157), the Funds
disclose 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). The three levels of the fair value
hierarchy under ASC 820 are described below:
Level 1 - Unadjusted quoted prices in active markets for identical, unrestricted
assets or liabilities that the Fund has the ability to access at the measurement
date;
Level 2 - Quoted prices which are not active, or inputs that are observable
(either directly or indirectly) for substantially the full term of the asset or
liability; and
Level 3 - Prices, inputs or exotic modeling techniques which are both
significant to the fair value measurement and unobservable (supported by little
or no market activity).
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.
A financial instrument's level within the fair value hierarchy is based upon the
lowest level of any input that is significant to the fair value measurement.
However, the determination of what constitutes "observable" requires significant
judgment by the Adviser. The Adviser considers observable data to be market data
which is readily available, regularly distributed or updated, reliable and
verifiable, not proprietary, and provided by independent sources that are
actively involved in the relevant market.
For the year ended October 31, 2009 there has been no significant changes to the
Funds' fair valuation methodologies.
FEDERAL INCOME TAXES -- It is the Funds' intention to continue to qualify as a
regulated investment company for Federal income tax purposes by complying with
the appropriate provisions of the Subchapter M of the Internal Revenue Code of
1986, as amended. Accordingly, no provisions for Federal income taxes have been
made in the financial statements.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 2009
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
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 provision in the current period.
However, management's conclusions regarding tax positions taken 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 3 tax year ends, as
applicable), on-going analysis of and changes to tax laws, regulations and
interpretations thereof.
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on trade date. Costs used in determining realized gains and losses
on the sale of investment securities are based on specific identification.
Dividend income is recorded on the ex-dividend date. Interest income is
recognized on the accrual basis from the settlement date.
FOREIGN CURRENCY 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 (i) investment securities, (ii)
income and (iii) 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 Statement of
Operations. Net realized and unrealized gains and losses on foreign currency
transactions represent net foreign exchange gains or losses from foreign
currency exchange 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.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- The Funds may enter into forward
foreign currency exchange contracts to protect the value of securities held and
related receivables and payables against changes in future foreign exchange
rates. A forward currency contract is an agreement between two parties to buy
and sell currency at a set price on a future date. The market value of the
contract will fluctuate with changes in currency exchange rates. The contract is
marked-to-
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 2009
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
market daily using the current forward rate and the change in market value is
recorded by the Funds as unrealized gain or loss. The Funds recognize realized
gains or losses when the contract is closed, equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. Risks may arise from the unanticipated movements in the value of a
foreign currency relative to the U.S. dollar. Risks may also arise upon entering
into these contracts from the potential inability of counterparties to meet the
terms of their contracts and are generally limited to the amount of unrealized
gain on the contracts, if any, at the date of default. As of October 31, 2009,
there were no open forward foreign currency exchange contracts.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Funds distribute
substantially all of their net investment income annually. Any net realized
capital gains are distributed annually. All distributions are recorded on
ex-dividend date.
CREATION UNITS -- The Global X/InterBolsa FTSE Colombia 20 ETF and the Global X
FTSE Nordic ETF issue and redeem Shares at NAV and only in large blocks of
50,000 and 70,000 Shares, respectively (each block of 50,000 and 70,000 Shares
respectively, called a "Creation Unit" or multiples thereof). Purchasers of
Creation Units at NAV must pay a standard Creation Transaction Fee of $2,600 and
$1,500 respectively, per transaction (assuming 50,000 and 70,000 Shares
respectively, in each Creation Unit). The fee is a single charge and will be the
same regardless of the number of Creation Units purchased by an investor on the
same day. The value of a Creation Unit as of first creation was approximately
$750,000 and $1,015,000, respectively. An Authorized Participant who holds
Creation Units and wishes to redeem at NAV would also pay a standard Redemption
Fee of $2,600 and $1,500, respectively, per transaction (assuming 50,000 and
70,000 Shares, respectively, in each Creation Unit), 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, a higher Transaction Fee will
be charged.
ACCOUNTING PRONOUNCEMENTS -- In March 2008 the FASB issued an update to ASC 815,
Derivatives and Hedging that amends and expands disclosure requirements for
derivative and hedging activities. The topic is effective for financial
statements issued for fiscal years beginning after November 15, 2008. Management
has adopted and there is no affect on the financial statements.
3. RELATED PARTY TRANSACTIONS
The Adviser serves as the investment adviser and the administrator for the
Funds. Subject to the supervision of the Board of Trustees, the Adviser is
responsible for managing the investment activities of the Funds and the Funds'
business affairs and
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 2009
3. RELATED PARTY TRANSACTIONS (continued)
other administrative matters. Subject to the general supervision of the Board of
Trustees of the Trust, the Adviser 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 its service to the Funds, under the Supervision and
Administration Agreement, Global X/InterBolsa FTSE Colombia 20 ETF pays a
monthly a fee to the Adviser at the annual rate (stated as a percentage of the
average daily net assets of the Fund) of 0.68%, and Global X FTSE Nordic ETF
pays a monthly a fee to the Adviser at the annual rate (stated as a percentage
of the average daily net assets of the Fund) of 0.50%. 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 and governmental fees, brokerage fees, commissions and other
transaction expenses, costs of borrowing money, including interest expenses and
extraordinary expenses (such as litigation and indemnification expenses). With
respect to the Global X/InterBolsa FTSE Colombia 20 ETF, that Fund bears custody
expenses, whereas the Adviser bears the cost of the custody services with
respect to the Global X FTSE Nordic 30 ETF. The Funds incurred $15,892 and
$2,690 respectively, of Supervision and Administration Fees for the year ended
October 31, 2009, of which $3,567 and $1,378, respectively, were outstanding as
of October 31, 2009.
The Adviser and InterBolsa S.A. ("InterBolsa"), one of the leading
broker-dealers located in Colombia, have entered into an agreement, pursuant to
which InterBolsa agrees to provide certain marketing, marketing-related and
other services and allows the use of InterBolsa's name and brand with respect to
the Global X/InterBolsa FTSE Colombia 20 ETF. Under this agreement, InterBolsa
has agreed to make an initial payment to the Adviser regarding certain start up
expenses for the Fund and the Adviser has agreed to share with InterBolsa fifty
percent (50%) of the Adviser's legitimate profits with respect to the Global
X/InterBolsa FTSE Colombia 20 ETF.
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 the preparation and filing of all reports,
registration statements, proxy statements and all other materials required to be
filed or furnished by the Funds under federal and state securities laws. As
compensation for these services,
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 2009
3. RELATED PARTY TRANSACTIONS (continued)
the Sub-Administrator 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.
SEI Investments Distribution Co. ("SIDCO") serves as each Fund's underwriter and
distributor of Shares pursuant to a Distribution Agreement. Under the
Distribution Agreement, SIDCO, as agent, receives orders to create and redeem
shares in Creation Unit Aggregations and transmits such orders to the Trust's
custodian and transfer agent. The Distributor has no obligation to sell any
specific quantity of Fund shares. SIDCO bears the following costs and expenses
relating to the distribution of shares: (i) the costs of processing and
maintaining records of creations of Creation Units; (ii) all costs of
maintaining the records required of a registered broker/dealer; (iii) the
expenses of maintaining its registration or qualification as a dealer or broker
under federal or state laws; (iv) filing fees; and (v) all other expenses
incurred in connection with the distribution services as contemplated in the
Distribution Agreement.
4. INVESTMENT TRANSACTIONS
For the period ended October 31, 2009, the purchases and sales of investments in
securities other than long-term U.S. Government and short-term securities were:
SALES AND
GLOBAL X FUNDS PURCHASES MATURITIES
- -------------- ---------- ----------
InterBolsa FTSE Colombia 20 ETF $5,362,525 $65,604
FTSE Nordic 30 ETF $3,125,686 $18,243
There were no purchases or sales of long-term U.S. Government securities for the
Global X/InterBolsa FTSE Colombia 20 ETF and the Global X FTSE Nordic 30 ETF.
5. 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. generally accepted accounting principles. 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.
The following differences, primarily attributable to foreign currency and net
operating losses, have been reclassified to/from the following accounts during
the fiscal period ended October 31, 2009.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 2009
5. TAX INFORMATION (continued)
UNDISTRIBUTED
NET ACCUMULATED
INVESTMENT NET REALIZED
GLOBAL X FUNDS INCOME LOSS
- -------------- ------------- ------------
InterBolsa FTSE
Colombia 20 ETF $47,831 $(47,831)
FTSE Nordic 30 ETF $ 683 $ (683)
There were no distributions from either Fund during the period ended October 31,
2009.
As of October 31, 2009, the components of Distributable Earnings on a tax basis
were as follows:
GLOBAL X/
INTERBOLSA FTSE GLOBAL X FTSE
COLOMBIA 20 ETF NORDIC 30 ETF
--------------- -------------
UNDISTRIBUTED ORDINARY INCOME $ 215,829 $ 2,157
UNREALIZED APPRECIATION ON INVESTMENTS AND
FOREIGN CURRENCY 1,441,777 263,086
OTHER TEMPORARY DIFFERENCES (2,052) --
---------- --------
TOTAL DISTRIBUTABLE EARNINGS $1,655,554 $265,243
========== ========
For Federal income tax purposes, capital loss carryforwards represent realized
losses of the Funds that may be carried forward for a maximum period of eight
years and applied against future gains. As of October 31, 2009, the Funds had no
capital loss carryforwards.
The Federal tax cost and aggregate gross unrealized appreciation and
depreciation on investments held by the Funds at October 31, 2009 were as
follows:
AGGREGATED AGGREGATED
GROSS GROSS NET
FEDERAL UNREALIZED UNREALIZED UNREALIZED
GLOBAL X FUNDS TAX COST APPRECIATION DEPRECIATION APPRECIATION
- -------------- ---------- ------------ ------------ ------------
InterBolsa FTSE
Colombia 20 ETF $5,596,284 $1,492,920 $(53,644) $1,439,276
FTSE Nordic 30 ETF $3,118,533 $ 285,920 $(22,730) $ 263,190
6. CONCENTRATION OF RISKS
The Funds invest in securities of foreign issuers in several 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
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 2009
6. CONCENTRATION OF RISKS (continued)
future political and economic developments and the level of governmental
supervision and regulation of securities markets in the respective countries.
The Funds may be subject to taxes imposed by countries in which it invests. Such
taxes are generally based on either income or gains earned or repatriated. The
Funds accrue and apply such taxes to net investment income, net realized gains
and net unrealized gains as income and/or capital gains are earned.
7. OTHER
At October 31, 2009, 100% of total shares outstanding were held by two
shareholders for the Global X/InterBolsa FTSE Colombia 20 ETF and 100% of total
shares outstanding were held by one shareholder for the Global X FTSE Nordic 30
ETF.
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. Additionally; in the normal course of
business, the Funds enter into contracts that provide general indemnifications.
The Funds' maximum exposure under these arrangements is dependent on future
claims that may be made against the Funds and, therefore, cannot be established.
8. SUBSEQUENT EVENT
The Funds have evaluated the need for disclosures and/or adjustments resulting
from subsequent events through December 22, 2009, (i.e., the date the financial
statements were available to be issued).
Subsequent to year end, the following investment portfolios of the Trust
commenced operations.
FUND NAME COMMENCED OPERATIONS
- --------- --------------------
Global X China Consumer ETF November 30, 2009
Global X China Industrials ETF November 30, 2009
Global X China Technology ETF December 8, 2009
Global X China Financials ETF December 10, 2009
Global X China Energy ETF December 15, 2009
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REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
October 31, 2009
To the Shareholders and Board of Trustees of the Global X Funds
We have audited the accompanying statement of assets and liabilities of the
Global X/ InterBolsa FTSE Colombia 20 ETF, a series of the Global X Funds,
including the schedule of investments, as of October 31, 2009 and the related
statements of operations, changes in net assets and financial highlights for the
period February 5, 2009 (commencement of investment operations) through October
31, 2009. We have also audited the accompanying statement of assets and
liabilities of the Global X FTSE Nordic 30 ETF, a series of the Global X Funds,
including the schedule of investments, as of October 31, 2009 and the related
statements of operations, changes in net assets and financial highlights for the
period August 17, 2009 (commencement of investment operations) through October
31, 2009. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities and cash owned as of October 31, 2009, by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Global X/ InterBolsa FTSE Colombia 20 ETF and Global X FTSE Nordic 30 ETF, as of
October 31, 2009, the results of their operations, changes in their net assets
and the financial highlights for the periods indicated above, in conformity with
accounting principles generally accepted in the United States of America.
(SANVILLE & COMPANY)
Abington, Pennsylvania
December 22, 2009
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DISCLOSURE OF FUND EXPENSES (UNAUDITED)
All funds have operating expenses. As a shareholder of a fund, your investment
is affected by these ongoing costs, which include (among others) costs for Fund
management, administrative services, and shareholder reports like this one. It
is important for you to understand the impact of these costs on your investment
returns.
Operating expenses such as these are deducted from a fund's gross income and
directly reduce your final investment return. These expenses are expressed as a
percentage of the fund's average net assets; this percentage is known as the
fund's expense ratio.
The following examples use the expense ratio and are intended to help you
understand the ongoing costs (in dollars) of investing in your Fund and to
compare these costs with those of other funds. The examples are based on an
investment of $1,000 made at the beginning of the period shown and held for the
entire period.
The table on the next page illustrates your Fund's costs in two ways:
ACTUAL FUND RETURN. This section helps you to estimate the actual expenses after
fee waivers that your Fund incurred over the period. The "Expenses Paid During
Period" column shows the actual dollar expense cost incurred by a $1,000
investment in the Fund, and the "Ending Account Value" number is derived from
deducting that expense cost from the Fund's gross investment return.
You can use this information, together with the actual amount you invested in
the Funds, to estimate the expenses you paid over that period. Simply divide
your actual account value by $1,000 to arrive at a ratio (for example, an $8,600
account value divided by $1,000 = $8.6), then multiply that ratio by the number
shown for your Funds under "Expenses Paid During Period."
HYPOTHETICAL 5% RETURN. This section helps you compare your Fund's costs with
those of other funds. It assumes that the Funds had an annual 5% return before
expenses during the year, but that the expense ratio (Column 3) for the period
is unchanged. This example is useful in making comparisons because the
Securities and Exchange Commission requires all funds to make this 5%
calculation. You can assess your Fund's comparative cost by comparing the
hypothetical result for your Fund in the "Expense Paid During Period" column
with those that appear in the same charts in the shareholder reports for other
funds.
NOTE: Because the return is set at 5% for comparison purposes -- NOT your Fund's
actual return -- the account values shown may not apply to your specific
investment.
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DISCLOSURE OF FUND EXPENSES (UNAUDITED) (CONTINUED)
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
05/01/09 10/31/09 RATIOS PERIOD
--------- --------- ---------- --------
GLOBAL X\INTERBOLSA FTSE COLOMBIA 20 ETF(1)
ACTUAL FUND RETURN $1,000.00 $1,574.70 0.86% $5.58
HYPOTHETICAL 5% RETURN 1,000.00 1,020.87 0.86 4.38
GLOBAL X FTSE NORDIC 30 ETF
ACTUAL FUND RETURN $1,000.00 $1,108.30 0.50% $1.07(2)
HYPOTHETICAL 5% RETURN 1,000.00 1,022.68 0.50 2.55(1)
(1) EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO MULTIPLIED BY THE
AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED 184/365 (TO REFLECT THE
ONE-HALF YEAR PERIOD.)
(2) COMMENCED OPERATIONS ON AUGUST 17, 2009. EXPENSES ARE EQUAL TO THE FUND'S
ANNUALIZED EXPENSE RATIO MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE
PERIOD, MULTIPLIED BY 74/365 (TO REFLECT THE PERIOD FROM INCEPTION TO
DATE.)
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SUPPLEMENTAL INFORMATION (UNAUDITED)
Net asset value, or "NAV", is the price per share at which the Funds issue and
redeems shares. It is calculated in accordance with the standard formula for
valuing mutual fund shares. The "Market Price" of the Funds generally is
determined using the midpoint between the highest bid and the lowest offer on
the stock exchange on which the shares of the Funds are listed for trading, as
of the time that the Funds' NAV is calculated. The Funds' Market Price may be
at, above or below their NAV. The NAV of the Funds will fluctuate with changes
in the market value of their Funds holdings. The Market Price of the Funds will
fluctuate in accordance with changes in its NAV, as well as market supply and
demand.
Premiums or discounts are the differences (expressed as a percentage) between
the NAV and Market Price of the Funds on a given day, generally at the time NAV
is calculated. A premium is the amount that the Funds are trading above the
reported NAV, expressed as a percentage of the NAV. A discount is the amount
that the Funds are trading below the reported NAV, expressed as a percentage of
the NAV.
The following information shows the frequency distributions of premiums and
discounts for the Global X/InterBolsa FTSE Colombia 20 ETF Fund. The information
shown for the Global X/InterBolsa FTSE Colombia 20 ETF Fund is for the full
calendar quarter completed after the inception date of the Global X/InterBolsa
FTSE Colombia 20 ETF Fund through the date of the most recent calendar quarter
end.
Information for the Global X FTSE Nordic 30 ETF showing the frequency
distributions of premiums and discounts for the Fund is not presented as it
commenced operations on August 17, 2009, and did not have a full quarter of
information as of October 31, 2009.
Each line in the table shows the number of trading days in which the Global X/
InterBolsa FTSE Colombia 20 ETF Fund traded within the premium/discount range
indicated. The number of trading days in each premium/discount range is also
shown as a percentage of the total number of trading days in the period covered
by each table. All data presented here represents past performance, which cannot
be used to predict future results.
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SUPPLEMENTAL INFORMATION (UNAUDITED)
GLOBAL X/INTERBOLSA FTSE COLOMBIA 20 ETF
NUMBER OF PERCENTAGE OF
PREMIUM/DISCOUNT RANGE DAYS TOTAL DAYS
- ---------------------- --------- -------------
Greater than 3.5% 1 0.54%
Greater than 3.0% and Less than 3.5% 3 1.63
Greater than 2.0% and Less than 2.5% 6 3.26
Greater than 1.5% and Less than 2.0% 15 8.15
Greater than 1.0% and Less than 1.5% 22 11.96
Greater than 0.5% and Less than 1.0% 29 15.76
Between 0.5% and -0.5% 34 18.48
Less than -0.5% and Greater than -1.0% 15 8.15
Less than -1.0% and Greater than -1.5% 21 11.41
Less than -1.5% and Greater than -2.0% 15 8.15
Less than -2.0% and Greater than -2.5% 10 5.43
Less than -2.5% and Greater than -3.0% 5 2.72
Less than -3.0% and Greater than -3.5% 3 1.63
Less than -3.5% and Greater than -4.0% 2 1.09
Less than -4.0% and Greater than -4.5% 2 1.09
Less than -4.5% and Greater than -5.0% 1 0.55
--- ------
Total 184 100.00%
--- ------
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BOARD CONSIDERATIONS IN APPROVING THE
INVESTMENT ADVISORY AGREEMENT
GLOBAL X FTSE NORDIC 30 ETF
Section 15(c) of the Investment Company Act of 1940, as amended ("1940 Act"),
requires that each mutual fund's board of trustees, including a majority of
those trustees who are not "interested persons" of the mutual fund, as defined
in the 1940 Act ("Independent Trustees"), consider and approve the terms of the
mutual fund's investment advisory agreement.
As you are aware, the Global X FTSE Nordic 30 ETF ("Fund") commenced operations
on August 17, 2009. However, the investment advisory agreement ("Agreement")
between the Global X Funds ("Trust"), on behalf of the Fund and Global X
Management LLC ("Global X Management") was approved at an in person meeting of
the Board of Trustees ("Board') of the Trust meeting held on September 26, 2008.
At that meeting, the Board of Trust, including each of the Independent Trustees,
unanimously voted to approve the Agreement between the Trust, on behalf of the
Fund and Global X Management. In advance of the September 26, 2008 Board
meeting, the Board reviewed written responses from Global X Management to
questions posed to them on behalf of the Independent Trustees and supporting
materials relating to those questions and responses.
In determining to approve the Agreement, the Board concluded that the Agreement
was fair and reasonable and in the best interests of the Fund and its
shareholders. The Board considered the following categories of material factors,
among others, relating to the agreements. Based upon its review of these various
factors, as well as other information, the Board concluded that it is in the
best interests of the Fund and its shareholders for the Board to approve the
Agreement. In reaching this decision, the Board did not assign relative weights
to the factors discussed below or deem any one factor or group of them to be
controlling in and of themselves.
NATURE, EXTENT AND QUALITY OF SERVICES
The Board considered information and data concerning the nature, extent, and
quality of the services to be provided to the Fund by Global X Management. The
Board considered, among other things, the terms of the Agreement and the range
of services to be provided to the Fund in accordance with the Agreement. The
Board reviewed information about Global X Management's key personnel and the
portfolio managers who would provide investment advisory services to the Fund.
The Board also considered Global X Management's responsibilities under the
Agreement to, among other things, (i) manage the investment operations of the
Fund and the composition of the Fund's assets, including the purchase, retention
and disposition of its holdings, (ii)
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BOARD CONSIDERATIONS IN APPROVING THE
INVESTMENT ADVISORY AGREEMENT (CONTINUED)
provide quarterly reports to the Trust's officers and Board, (iii) vote proxies,
exercise consents, and exercise all other rights appertaining to securities and
assets held by the Fund, (iv) select broker-dealers to execute portfolio
transactions for the Fund, (v) assist in the preparation and filing of reports
and proxy statements (if any) to the shareholders of the Fund, the periodic
updating of the registration statement, prospectus, statement of additional
information, and other reports and documents for the Fund required to be filed
by the Trust with the Securities and Exchange Commission and other governmental
bodies, and (vi) monitor anticipated purchases and redemptions of the shares
(including creation units) of the Fund by shareholders and new investors. The
Board also considered the quality of the services to be provided and the quality
of Global X Management's resources that would be made available to the Fund. The
Board evaluated Global X Management's proposed administrative services, and
information the Board received regarding the experience and professional
qualifications of Global X Management's key personnel.
Based on these considerations, the Board concluded that it was satisfied with
the nature, extent and quality of the services to be provided to the Fund by
Global X Management.
PERFORMANCE
The Board considered that, because the Fund had not started operations,
meaningful data relating to its performance was not available and could not be a
factor in approving the Agreement.
COST OF SERVICES AND PROFITABILITY
The Board reviewed information regarding Global X Management's cost to provide
investment management and related services to the Fund and the profitability to
it from managing the Fund. The Board considered the proposed advisory fee
schedule and considered information about the profitability to Global X
Management from all services to be provided to the Fund and all aspects of its
relationships with the Fund. The Board noted that Global X Management expected
that it would not be generating any profits from its services to the Fund during
the first year of the Fund's operations.
Based on these considerations, the Board concluded that the profits anticipated
to be realized by Global X Management from its relationship with the Fund would
not be excessive.
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BOARD CONSIDERATIONS IN APPROVING THE
INVESTMENT ADVISORY AGREEMENT (CONTINUED)
COMPARISON OF FEES AND SERVICES
The Board considered comparative information with respect to the investment
advisory fee to be paid by the Fund to Global X Management. In this regard, the
Board considered the proposed unitary fee structure and the projected total
expense ratios for the Fund. The Board noted that, under a Supervision and
Administration Agreement, Global X Management would be responsible for certain
expenses of the Fund, including the cost of advisory services, fund
administration, transfer agency services, custody, legal, audit, and other
services for the Fund, except taxes and governmental fees, brokerage fees,
commissions and other transaction expenses, costs of borrowing money, including
interest expenses and extraordinary expenses (such as litigation and
indemnification expenses). The Board considered comparative expense data for the
Fund, including the fees and expenses paid by other comparable country and
regional focused exchange traded funds.
Based on these considerations, the Board concluded that the Fund's investment
advisory fee, in conjunction with the information about quality of services,
profitability, and other matters discussed, supports the conclusion that the
investment advisory fee is fair and reasonable.
ECONOMIES OF SCALE
The Board considered the extent to which economies of scale would be realized as
the Fund grows and whether the proposed fees for the Fund reflected these
economies of scale. The Board reviewed the Fund's fee arrangements and noted
that Global X Management does not expect to make a profit from its services to
the Fund for at least the first year of operations of the Fund and the
significant investment of time and resources that Global X Management has made
in the Fund. In addition, the Trustees considered that the implementation of a
unitary fee provides certainty of the total expenses for the Fund and its
shareholders. Based on these considerations, the Board concluded that a flat
advisory fee was fair and reasonable.
OTHER BENEFITS
In addition to the categories discussed above, the Board considered whether
there were other benefits that may be realized by Global X Management as a
result from its relationship with the Fund. The Board reached no conclusion as
to what if any other benefits Global X Management might realize from its
relationship with the Fund.
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TRUSTEES AND OFFICERS OF THE TRUST
Set forth below are the names, addresses, ages, position with the Trust, Term of
Office and Length of Time Served, the principal occupations for the last five
years, number of Funds in fund complex overseen by trustee, and other
directorships outside the fund complex of each of the persons currently serving
as Trustees and Officers of the Trust.
NUMBER OF
NAME, FUNDS IN OTHER
ADDRESS POSITION(S) PRINCIPAL OCCUPATION(S) TRUST DIRECTORSHIPS
(YEAR OF HELD DURING OVERSEEN BY HELD
BIRTH) WITH FUNDS THE PAST 5 YEARS DIRECTOR BY TRUSTEES
- ------------- ----------------- --------------------------- ----------- -------------
INDEPENDENT TRUSTEES
Sanjay Ram Director President of Risk Advisors 2(2) None.
Bharwani (since Inc. (since 2007); Chief
410 Park 2008) Information Officer, M.
Ave, Safra & Co (2004-2006);
4th floor President, Atze Consulting
New York, Inc. (2002-2004)
NY 10022
(1974)
Scott R. Director Founder and President, 2(2) None.
Chichester(1) (since DirectPay USA LLC (since
410 Park 2008) 2006); Chief Financial
Ave, Officer, Ong Corporation
4th floor (2002-2008).
New York,
NY 10022
(1970)
Kartik Director Senior Product Manager, 2(2) None.
Kiran Shah (since Wireless Generation (since
410 Park 2008) 2008); Manager, Amgen
Ave, (2003-2006)
4th floor
New York,
NY 10022
(1977)
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TRUSTEES AND OFFICERS OF THE TRUST (CONTINUED)
The Trust's Statement of Additional Information ("SAI") includes additional
information about the Trustees and Officers. The SAI may be obtained without
charge by calling 1-888-493-8631. The following chart lists Trustees and
Officers as of October 31, 2009.
NUMBER OF
NAME, FUNDS IN OTHER
ADDRESS POSITION(S) PRINCIPAL OCCUPATION(S) TRUST DIRECTORSHIPS
(YEAR OF HELD DURING OVERSEEN BY HELD
BIRTH) WITH FUNDS THE PAST 5 YEARS DIRECTOR BY TRUSTEES
- ------------- ----------------- --------------------------- ----------- -------------
INTERESTED TRUSTEE / OFFICERS
Bruno del Director (since Chief Executive Officer, 2(2) None.
Ama 2008), Global X Management
410 Park President, Chief Company LLC (since
Ave, Executive 2008); Head of Global
4th floor Officer Structured Products
New York, (since 2008) Operations at Radian
NY 10022 Asset Assurance (2004-
(1976) 2008); Senior Manager at
Oliver Wyman (1998-
2004).
Jose C. Chief Operating Founder and President of N/A N/A
Gonzalez Officer, Chief GWM Group, Inc. (since
410 Park Compliance 2006); Financial Advisor,
Ave, Officer and Broad Street Securities,
4th floor Chief Financial Inc. (2004-2006);
New York, Officer, Financial Advisor, Lloyd,
NY 10022 Secretary Scott, & Valenti, Ltd.
(1976) (since 2008) (2002-2004).
Joseph Assistant Corporate Counsel of Sub- N/A N/A
Gallo(3) Secretary Administrator (since
One 2007); Associate Counsel,
Freedom ICMA Retirement
Valley Corporation (2004-2007).
Drive
Oaks, PA
19456
(1973)
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TRUSTEES AND OFFICERS OF THE TRUST (CONTINUED)
NAME, OTHER
ADDRESS POSITION(S) PRINCIPAL OCCUPATION(S) DIRECTORSHIPS
(YEAR OF HELD DURING HELD
BIRTH) WITH FUNDS THE PAST 5 YEARS BY TRUSTEES
- ------------- ----------------- --------------------------- --------------
Stephen Assistant Fund Accounting N/A
Panner(3) Treasurer Director of the Sub-
One Freedom Administrator since
Valley Drive 2005. Fund
Oaks, Administration Manager,
PA 19456 Old Mutual Fund
(1970) Services, 2000-2005.
Chief Financial Officer,
Controller and Treasurer,
PBHG Funds and PBHG
Insurance Series Fund,
2004-2005. Assistant
Treasurer, PBHG Funds
and PBHG Insurance
Series Fund, 2000-2004.
Assistant Treasurer, Old
Mutual Advisors Fund,
2004-2005.
- ----------
(1) Mr. Chichester is currently married to a sister of Mr. del Ama's wife.
While an "immediate family member" as defined in Section 2(a) (19) of the
1940 Act of Mr. del Ama would be considered an Interested Person, Mr.
Chichester is not considered an immediate family member for this purpose.
Although this fact was taken into consideration in determining whether Mr.
Chichester should be considered to be an independent trustee for purposes
of the Section 2(a)(19) of the 1940 Act, it was determined that this
relationship was not one that should disqualify Mr. Chichester from serving
as an independent trustee of the Trust.
(2) The Trust consists of nineteen investment portfolios. However, as of
October 31, 2009, only the Global X/InterBolsa FTSE Colombia 20 ETF Fund
and the Global X FTSE Nordic 30 ETF Fund were operational.
(3) These officers of the Trust also serve as officers of one or more mutual
funds for which SEI Investments Company or an affiliate acts as investment
manager, administrator or distributor.
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410 Park Ave, 4th floor
New York, NY 10022
1-888-GXFund-1
(1-888-493-8631)
www.globalxfunds.com
INVESTMENT ADVISER:
Global X Management Company LLC
410 Park Ave, 4th floor
New York, NY 10022
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
LEGAL COUNSEL:
Dechert LLP
1175 I Street
Washington, DC 20006-2401
This information must be preceded or accompanied by a current prospectus for the
Funds described.
GLX-AR-001-0100
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, comptroller 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 trustees has determined that the registrant has
at least one audit committee financial expert serving on the audit committee.
(a)(2) The audit committee financial expert is Scott Chichester and is
independent as defined in Form N-CSR Item 3(a)(2).
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Fees billed by Sanville & Company related to the Trust.
Sanville & Company billed the Trust aggregate fees for services rendered to the
Trust for the last fiscal year was as follows:
2009
----------------------------------------------------------------------------------
All fees and services All fees and services to All other fees and services to
to the Trust that were service affiliates that service affiliates that did
pre-approved were pre-approved not require pre-approval
---------------------- ------------------------ ------------------------------
(a) Audit Fees $31,000 $0 $0
(b) Audit-Related
Fees $ 0 $0 $0
(c) Tax Fees $ 0 $0 $0
(d) All Other
Fees $ 0 $0 $0
(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 Sanville & Company:
2009
----
Audit-Related Fees 0%
Tax Fees 0%
All Other Fees 0%
(f) Not applicable.
(g) The aggregate non-audit fees and services billed by Sanville & Company for
the last fiscal year was $0.
(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.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to open-end management investment companies.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to open-end management investment companies.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to open-end management investment companies. Effective for
closed-end management investment companies for fiscal years ending on or after
December 31, 2005
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT COMPANY AND
AFFILIATED PURCHASERS.
Not applicable to open-end management investment companies.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The certifying officers, whose certifications are included herewith, have
evaluated the registrant's disclosure controls and procedures 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 significant changes in the registrant's internal control over
financial reporting that occurred during the registrant's last fiscal half-year
that has materially affected, or is reasonably likely to materially affect, the
registrants internal control over financial reporting.
ITEMS 12. EXHIBITS.
(a)(1) Not applicable for semi-annual report.
(a)(2) 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 Investment Company Act of 1940, as amended (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 (17 CFR 270.30a-2(b)) also accompany this filing
as an Exhibit.
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) The Global X Funds
By (Signature and Title)* \s\ Bruno del Ama
-------------------------------------
Bruno del Ama
President
Date: January 7, 2010
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\ Bruno del Ama
-------------------------------------
Bruno del Ama
President
Date: January 7, 2010
By (Signature and Title)* \s\ Jose C. Gonzalez
-------------------------------------
Jose C. Gonzalez
CFO
Date: January 7, 2010
* Print the name and title of each signing officer under his or her
signature.