March 1, 2013
Global X Gold Explorers ETF
NYSE
Arca, Inc:
GLDX
2013 Summary Prospectus
Before you invest, you may want to review
the Fund's prospectus, which contains more information about the Fund and its risks. You can find the Fund's prospectus and other
information about the Fund (including the Fund’s statement of additional information and annual report) online at http://www.globalxfunds.com/investorrelations.php.
You can also get this information at no cost by calling 1-888-GX-FUND-1 or by sending an e-mail request to info@globalxfunds.com.
The Fund’s prospectus and statement of additional information, both dated March 1, 2013, as amended and supplemented from
time to time, along with the financial statements included in the Fund's most recent annual report to shareholders dated October
31, 2012, are incorporated by reference into (legally made a part of) this Summary Prospectus.
FUND SUMMARY
Global X Gold Explorers ETF
Ticker: GLDX Exchange: NYSE Arca, Inc.
INVESTMENT OBJECTIVE
The Global X Gold Explorers ETF (“Fund”)
seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of
the Solactive Global Gold Explorers Index (“Underlying Index”).
FEES AND EXPENSES
This table describes the fees and expenses
that you may pay if you buy and hold shares (“Shares”) of the Fund. You will also incur usual and customary brokerage
commission when buying and selling Shares.
Annual Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your investment):
|
Management Fees:
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0.65%
|
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Distribution and Service (12b-1) Fees:
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None
|
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Other Expenses:
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0.00%
|
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Total Annual Fund Operating Expenses:
|
0.65%
|
Example:
The following example is
intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. This example does not
take into account customary brokerage commissions that you pay when purchasing or selling shares of the Fund in the secondary market.
The example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the
end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
|
One Year
|
Three Years
|
Five Years
|
Ten Years
|
|
$66
|
$208
|
$362
|
$810
|
Portfolio Turnover:
The Fund pays
transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio
turnover rate may indicate higher transaction costs and may result in higher taxes when Shares are held in a taxable account. These
costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During
the most recent fiscal year end, the Fund’s portfolio turnover rate was 43.12% of the average value of its portfolio.
PRINCIPAL INVESTMENT STRATEGIES
The Fund invests at least 80% of its total
assets in the securities of the Underlying Index and in ADRs and GDRs based on the securities in the Underlying Index. Moreover,
at least 80% of the Fund’s total assets are invested in securities that are economically tied to the gold exploration industry.
Companies economically tied to the gold exploration industry include those engaged in the exploration of gold mining projects.
The Fund’s 80% investment policies are non-fundamental and require 60 days’ prior written notice to shareholders before
they can be changed. The Fund may lend securities representing up to one-third of the value of the Fund’s total assets (including
the value of the collateral received).
The Underlying Index is free float adjusted,
liquidity tested and market capitalization-weighted index that is designed to measure broad based equity market performance of
global companies involved in gold exploration, as defined by Structured Solutions AG. As of January 1, 2013, the Underlying Index
had 20 constituents, 18 of which are foreign companies. The Fund’s investment objective and Underlying Index may be changed
without shareholder approval.
The Underlying Index is sponsored by an
organization (“Index Provider”) that is independent of the Fund and Global X Management Company LLC, the investment
adviser for the Fund (“Adviser”). The Index Provider determines the relative weightings of the securities in the Underlying
Index and publishes information regarding the market value of the Underlying Index. The Fund’s Index Provider is Structured
Solutions AG.
The Adviser uses a “passive”
or indexing approach to try to achieve the Fund’s investment objective. Unlike many investment companies, the Fund does not
try to “beat” the Underlying Index and does not seek temporary defensive positions when markets decline or appear overvalued.
The Fund generally will use a replication
strategy. A replication strategy is an indexing strategy that involves investing in the securities of the Underlying Index in approximately
the same proportions as in the Underlying Index. However, the Fund may utilize a representative sampling strategy with respect
to the Underlying Index when a replication strategy might be detrimental to shareholders, such as when there are practical difficulties
or substantial costs involved in compiling a portfolio of equity securities to follow the Underlying Index, in instances in which
a security in the Underlying Index becomes temporarily illiquid, unavailable or less liquid, or as a result of legal restrictions
or limitations (such as tax diversification requirements) that apply to the Fund but not the Underlying Index.
Correlation:
Correlation is the
extent to which the values of different types of investments move in tandem with one another in response to changing economic and
market conditions. An index is a theoretical financial calculation, while the Fund is an actual investment portfolio. The performance
of the Fund and the Underlying Index may vary somewhat due to transaction costs, asset valuations, foreign currency valuations,
market impact, corporate actions (such as mergers and spin-offs), legal restrictions or limitations, illiquid or unavailable securities,
and timing variances.
The Adviser expects that, over time, the
correlation between the Fund’s performance and that of the Underlying Index, before fees and expenses, will exceed 95%. A
correlation percentage of 100% would indicate perfect correlation. If the Fund uses a replication strategy, it can be expected
to have greater correlation to the Underlying Index than if it uses a representative sampling strategy.
Industry Concentration Policy:
The
Fund will concentrate its investments (i.e., hold 25% or more of its total assets) in a particular industry or group of industries
to approximately the same extent that the Underlying Index is concentrated.
SUMMARY OF PRINCIPAL RISKS
As with any investment, you could lose
all or part of your investment in the Fund, and the Fund's performance could trail that of other investments. The Fund is subject
to the principal risks noted below, any of which may adversely affect the Fund's net asset value ("NAV"), trading price,
yield, total return and ability to meet its investment objective, as well as other risks that are described in greater detail in
the
Additional Information About the Fund’s Strategies and Risks
section of the Prospectus and in the Statement of
Additional Information ("SAI").
Asset Class Risk:
Securities in
the Underlying Index or the Fund's portfolio may underperform in comparison to the general securities markets or other asset classes.
Concentration Risk:
Because the
Fund's investments are concentrated in gold exploration companies, the Fund will be susceptible to loss due to adverse occurrences
affecting gold exploration companies. For additional details on these risks, please see “Risks Related to Investing in the
Gold Exploration Industry” and “Risks Related to Investing in the Gold Mining Industry.”
Custody Risk:
Less developed markets
are more likely to experience problems with the clearing and settling of trades.
Emerging Market Risk:
The Fund invests
in securities globally, which may include emerging market countries. The Fund’s investment in an emerging market country
may be subject to a greater risk of loss than investments in developed markets.
Foreign Security Risk:
The Fund
is expected to invest in securities in foreign countries, currently including Canada, Australia and China, a list that might be
expanded as the index rebalances over time. Investments in the securities of foreign issuers (including investments in ADRs and
GDRs) are subject to the risks associated with investing in those foreign markets, such as heightened risks of inflation or nationalization.
In addition, securities of foreign issuers may lose value due to political, economic and geographic events affecting a foreign
issuer or market. During periods of social, political or economic instability in a country or region, the value of a foreign security
traded on United States’ exchanges, nonetheless, could be affected by, among other things, increasing price volatility, illiquidity,
or the closure of the primary market on which the security (or the security underlying the ADR or GDR) is traded. You may lose
money due to political, economic and geographic events affecting a foreign issuer or market.
Geographic Risk:
The Fund is expected
to invest in securities in geographies currently including North America, Australia and Asia, a list that might change as the index
rebalances over time. A natural disaster could occur in a geographic region in which the Fund invests.
Gold Price Relationship Risk:
The
Underlying Index measures the performance of companies primarily involved in gold exploration and not the performance of gold price
itself. The securities of companies involved in gold exploration may not be correlated with the performance of gold price itself
and may under- or over-perform the performance of gold price over the short-term or the long-term.
Issuer Risk:
Fund performance depends
on the performance of individual companies in which the Fund invests. Changes to the financial condition of any of those companies
may cause the value of their securities to decline.
Management Risk:
The Fund is subject
to the risk that the Adviser’s investment management strategy may not produce the intended results.
Market Risk:
The Fund's NAV could
decline over short periods due to short-term market movements and over longer periods during market downturns.
Market Trading Risks:
The Fund faces
numerous market trading risks, including the potential lack of an active market for Shares, losses from trading in secondary markets,
and disruption in the creation/redemption process of the Fund. Any of these factors may lead to the Shares trading at a premium
or discount to NAV.
Micro-Capitalization Risk:
The Fund
may invest in micro-capitalization companies. These companies are subject to substantially greater risks of loss and price fluctuations
because their earnings and revenues tend to be less predictable and their share prices tend to be more volatile and their markets
less liquid than companies with larger market capitalizations. Micro-capitalization companies may be newly formed or in the early
stages of development, with limited product lines, markets or financial resources and may lack management depth.
Non-Diversification Risk:
The Fund
may invest a large percentage of its assets in securities issued by or representing a small number of issuers. As a result, the
Fund’s performance may depend on the performance of a small number of issuers.
Risks Related to Investing in the Gold
Exploration Industry:
The exploration and development of mineral deposits involve significant financial risks over a significant
period of time which even a combination of careful evaluation, experience and knowledge may not eliminate. Few properties which
are explored are ultimately developed into producing mines. Major expenditures may be required to establish reserves by drilling
and to construct mining and processing facilities at a site. In addition, mineral exploration companies typically operate at a
loss and are dependent on securing equity and/or debt financing, which might be more difficult to secure for an exploration company
than for a more established counterpart.
Risks Related to Investing in the Gold
Mining Industry:
Securities in the Fund’s portfolio may be significantly subject to the effects of competitive pressures
in the gold mining industry and the price of gold bullion. The price of gold may be affected by changes in inflation rates, interest
rates, monetary policy, economic conditions and political stability. A significant portion of the world’s gold reserves are
held by governments, central banks and related institutions. If one or more of these institutions sold their holdings of gold in
significant quantities, it could cause gold prices to fall. The price of gold may fluctuate substantially over short periods of
time so the Fund’s share price may be more volatile than other types of investments. In addition, gold mining companies may
also be significantly affected by import controls, worldwide competition, liability for environmental damage, depletion of resources,
and mandated expenditures for safety and pollution control devices.
Securities Lending Risk:
Securities
lending involves the risk that the Fund loses money because the borrower fails to return the securities in a timely manner or at
all. The Fund could also lose money in the event of a decline in the value of the collateral provided for loaned securities or
of investments made with cash collateral. These events could also trigger adverse tax consequences for the Fund. As securities
on loan may not be voted by the Fund, there is a risk that the Fund may not be able to recall the securities in sufficient time
to vote on material proxy matters.
Securities Market Risk:
Because
certain securities markets in the countries in which the Fund may invest are small in size, underdeveloped and are less regulated
and less correlated to global economic cycles than those markets located in more developed countries, the securities markets in
such countries are subject to greater risks associated with market volatility, lower market capitalization, lower trading volume,
illiquidity, inflation, greater price fluctuations and uncertainty regarding the existence of trading markets.
Small- and Mid-Capitalization Companies
Risk:
Small- and mid-capitalization companies often have greater price volatility, lower trading volume and less liquidity
than larger more established companies. In addition, these companies are often subject to less analyst coverage and may be in early
and less predictable periods of their corporate existences. These companies tend to have smaller revenues, narrower product lines,
less management depth and experience, smaller Shares of their product or service markets, fewer financial resources and less competitive
strength than larger companies.
Tracking Error Risk:
The performance
of the Fund may diverge from that of the Underlying Index.
Valuation Risk:
The sales price
the Fund could receive for a security may differ from the Fund’s valuation of the security and may differ from the value
used by the Underlying Index, particularly for securities that trade in low value or volatile markets or that are valued using
a fair value methodology. The value of the securities in the Fund's portfolio may change on days when shareholders will not
be able to purchase or sell the Fund's Shares.
PERFORMANCE INFORMATION
The bar chart and table that follow show
how the Fund performed for the last calendar year and provide an indication of the risks of investing in the Fund by showing the
Fund’s performance and by showing how the Fund’s average annual returns for one year compared with the Fund’s
benchmark index and a broad measure of market performance. The Fund’s past performance (before and after taxes) is not necessarily
indicative of how the Fund will perform in the future. Updated performance information is available online at www.globalxfunds.com.
Annual Total Returns (Years Ended December
31)
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Best Quarter:
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09/30/12
|
|
23.85%
|
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Worst Quarter:
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09/30/11
|
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(24.84)%
|
Average Annual Total Returns (for the
Periods Ended December 31, 2012)
|
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Past One Year Ended December 31, 2012
|
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Since Inception (11/03/2010)
|
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Global X Gold Explorers ETF:
·
Return before taxes
·
Return after taxes on distributions
1
·
Return after taxes on distributions and sale of Fund Shares
1
|
(27.54)%
(28.79)%
(17.94)%
|
|
(26.70)%
(27.58)%
(22.46)%
|
|
|
|
|
|
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Solactive Global Gold Explorers Index
(Index returns do not reflect deductions for
fees, expenses, or taxes)
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(27.38)%
|
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(26.84)%
|
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S&P 500 Index
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16.00%
|
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10.80%
|
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(Index returns do not reflect deductions for fees, expenses, or taxes)
|
|
|
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1
After-tax returns are calculated
using the historical highest individual U.S. federal marginal income tax rates and do not reflect the impact of state and local
taxes. Your actual after-tax returns will depend on your specific tax situation and may differ from those shown above. After-tax
returns are not relevant to investors who hold Shares of the Fund through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts (IRAs).
FUND MANAGEMENT
Investment Adviser:
Global X Management
Company LLC.
Portfolio Managers:
The professionals
primarily responsible for the day-to-day management of the Fund are Bruno del Ama and Jose C. Gonzalez (“Portfolio Managers”).
Mr. del Ama, who is the Chief Executive Officer of the Adviser, and Mr. Gonzalez, who is the Chief Operating Officer of the Adviser,
have been Portfolio Managers of the Fund since November, 2010.
PURCHASE AND SALE OF FUND SHARES
Shares will be listed and traded at market
prices on an exchange. Shares may only be purchased and sold on the exchange through a broker-dealer. The price of Shares is based
on market price, and because exchange-traded fund shares trade at market prices rather than at NAV, Shares may trade at a price
greater than NAV (a premium) or less than NAV (a discount). Only “Authorized Participants” (as defined in the SAI)
who have entered into agreements with the Fund’s distributor, SEI Investments Distribution Co. ("Distributor"),
may engage in creation or redemption transactions directly with the Fund. The Fund will only issue or redeem Shares that have been
aggregated into blocks of 50,000 Shares or multiples thereof ("Creation Units"). The Fund will issue or redeem Creation
Units in return for a basket of cash and/or securities that the Fund specifies each Business Day.
TAX INFORMATION
The Fund intends to make distributions
that may be taxable to you as ordinary income or capital gains, unless you are investing through a tax-deferred arrangement such
as a 401(k) plan or an individual retirement account ("IRA").
PAYMENTS TO BROKER-DEALERS AND OTHER
FINANCIAL INTERMEDIARIES
The Adviser and its related companies may
pay broker/dealers or other financial intermediaries (such as a bank) for the sale of the Fund’s Shares and related services.
These payments create a conflict of interest by influencing your broker/dealer or other intermediary or its employees or associated
persons to recommend the Fund over another investment. Ask your financial adviser or visit your financial intermediary’s
website for more information.
