Down On The Farm: Global X Fertilizer ETF Debuts Today

Global X, the rapidly growing New York-based ETF issuer with over $1.8 billion in assets under management, continues sewing the seeds of growth as the firm rolls out its 33rd ETF today in the form of the Global X Fertilizers/Potash ETF SOIL. With an expense ratio of 0.69%, SOIL with track the Solactive Global Fertilizers/Potash Index. SOIL is Global X's first foray into the agriculture equities arena, but the firm is no stranger to commodities plays, offering the Global X Uranium ETF URA, the Global X Silver Miners ETF SIL and the Global Oil Equities ETF XOIL, among others. SOIL represents the tenth Global X fund offering exposure to commodities producers. While the firm is known for being first-to-market with many of its ETFs, SOIL enters an arena with some stout competition, namely the Market Vectors Agribusiness ETF MOO. IndexIQ, Jefferies and PowerShares also offer equity-based agriculture ETFs. At the country level, the U.S. gets an allocation of almost 22% while Israel chimes in at nearly 14% and Canada accounts for nearly 12% of SOIL's weight. Looking at SOIL's equity holdings, one difference is obvious when compared against MOO and other large-cap plays on the agriculture theme: Potash Corp. POT does not receive the large weight in SOIL that it does in rival ETFs. CF Industries CF is the ETF's largest holding with a weight of almost 5.3%. Norway's Yara International is next 5%. Incitec Pivot is the third-largest holding at 4.92% while Potash, the world's largest fertilizer producer, is SOIL's sixth-largest holding. Mosaic MOS and Agrium AGU are also found among SOIL's top-10 holdings. Even with the competition, SOIL very well could find a foothold with investors looking for something different beyond MOO. Global fertilizer demand is expected to keep growing and China and India currently account for more than 40% of global consumption. “As the population in emerging economies continues to increase their food consumption and purchasing power, these nations have to increase farming yields,” said Global X CEO Bruno del Ama. “We are starting to see how these fertilizer and potash companies stand to benefit from this demand.” SOIL is the sixth ETF introduced by Global X this month and the second this week.