Global X Funds’ uranium ETF to adopt new index

Mar 19th, 2018 | By | Category: Commodities

New York-based ETF provider Global X Funds has announced that the Global X Uranium ETF (URA US) will transition to a new index, the Solactive Global Uranium & Nuclear Components Total Return Index.

Global X Funds Announces Index Change for Uranium ETF

Global X Funds announces index change for uranium ETF

The new index is designed to reduce the fund’s exposure to smaller capitalisation stocks compared to its current index.

The fund will still broadly provide exposure to the equity market performance of global companies involved in the uranium industry including companies that are engaged in uranium mining, exploration for uranium, technologies related to the uranium industry and the production of nuclear components.

Stocks in the new index are screened for liquidity and weighted according to free-float market capitalisation.

A specific capping methodology is used at the time of the semi-annual index review to enhance diversification. The maximum weight of a ‘pure play’ company is 20%, with ‘non-pure play’ company weightings capped at 4.5%. Further, the sum of weights of all components that have a market capitalisation smaller than $100 million must not exceed 5%.

The ETF, which currently tracks the Solactive Global Uranium Total Return Index, will complete the transition in two phases. The phased approach is intended to enable the ETF’s portfolio managers to make the necessary adjustments to portfolio holdings in a manner that minimizes the impact to fund shareholders. The fund is expected to begin implementation of the change on or after 2 April 2018.

In the first phase, the fund will track the Solactive Global Uranium & Nuclear Components Transition TR Index. This is an interim index that will gradually reduce exposure to small-capitalization stocks while proportionately increasing exposure to other stocks based on their weightings in the new index. In the second phase, the fund will track the new index.

The ETF is listed on the NYSE and has $341 million in assets under management. It comes with an expense ratio of 0.70%.

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