The Venture Capital of GoldTM

As the world depletes its major existing gold mines, the continual discovery of new mines is essential in order to meet the global demand for gold. Gold explorers are companies focused on searching for new gold deposits, but may not yet produce ore or generate profits. While many gold explorers may fail to find significant deposits, those that do are critical and potentially lucrative components of the mining lifecycle. This makes investing in gold exploration typically a high risk/high reward proposition, similar to that of early stage venture capital investments.
The Global X Gold Explorers ETF provides an alternative method of gaining exposure to gold exploration by investing in a basket of companies within the industry. While investing in a single gold explorer can be extremely risky, investing in a basket of companies can help diversify that risk. For example, if the ETF were to capture high returns from one company, it may smooth over the losses generated by failed projects of others.

Supply Gap & Investment Potential

Supply & Demand Gap: 64% of the world's gold supply is obtained through mining. The gap between the global demand for gold and its supply from mines, however, has increased from $8.4 billion in 2002 to $82.4 billion in 2012. To narrow this supply gap, analysts expect a significant increase in investments towards the exploration of new mines. (Source: World Gold Council)
Increasing Gold Exploration Spend: Gold exploration spend increased from $1.25 billion in 2000 to $9.7 billion in 2012. According to research by MinEx Consulting, the mining industry needs to find double the amount of gold deposits than it mines to ensure an uninterrupted supply in the long run. Therefore, to deliver a sufficient pipeline of new gold mines, the industry needs to increase its focus on exploration. Source: Metals Economics Group, Intierra, Barrick Gold)

Supply Gap & Investment Potential

Large Cash Reserves: Gold explorers' cash reserves have increased, on average, from $0.32 million in 2000 to $70.3 million in 2012. Additionally, their debt levels are averaging 1.8% of total assets. With more cash on hand and potential capacity to carry debt, gold explorers should have ample funding for future exploration projects and continued growth. (Source: Factset)
Low Price to Book Ratio: The average price to book ratio (P/B) for components of the Global X Gold Explorer ETF is currently 1.59x (as of June 2013). This is significantly lower than the 10-year average of 5.3x. In addition, the P/B ratio has also fallen below the P/B for S&P 500 (2.3x), for the first time since December 2008. (Source: Factset)
 
 
 
Register   Share   Get Call Back   Visit Global X Website
DISCLOSURE
Carefully consider the Funds’ investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Funds’ prospectus, which may be obtained by calling 1-888-GX-FUND-1 (1.888.493.8631), or by visiting www.globalxfunds.com. Read the prospectus carefully before investing.

Investing involves risk, including the possible loss of principal. International investing may involve risk of capital loss from unfavorable fluctuations in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Narrowly focused investments may be subject to higher volatility. There are additional risks associated with investing in Gold and the Gold exploration industry. Negative changes in commodity markets could have a great impact on the fund, exploration and development of mineral deposits are highly speculative and exploration companies may be significantly affected by competitive pressures, the price of mineral deposits, and regulatory and political events, all of which may (cause losses or) increase volatility.
Index returns are for illustrative purposes only and do not reflect actual fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. 
Solactive Indexes have been licensed by Solactive AG for use by Global X Management Company, LLC. Global X Funds are not sponsored, endorsed, issued, sold, or promoted by Solactive AG, nor does this company make any representations regarding the advisability of investing in the Global X Funds. Global X Management Company, LLC serves as an advisor to the Global X Funds. The Funds are distributed by SEI Investments Distribution Co., which is not affiliated with Global X Management Company or any of its affiliates.