Global X still likes these funds, del Ama says, but they won't launch them until market conditions improve. Elsewhere in its pipeline, Global X has filed for a Sri Lanka-focused ETF even though it knows the idea isn't ready for prime time.
"As a capital market, Sri Lanka isn't substantively ready," del Ama says. "But when you look at the long-term trends, we believe Sri Lanka will be a much bigger economy with a more developed capital market."

He notes the country is already privatizing some industries, but that the process will probably take a couple of years. "We're ready to go [with a Sri Lanka ETF]," del Ama says. "We've put the seed out there. Their market may never reach the point where we think it will, but we've created the groundwork on the regulatory side."

Broader Appeal
Global X's ideas don't always pan out. Several of its existing funds have very low trading volume, and earlier this year it closed eight ETFs that failed to attract sufficient assets. These included funds that targeted the farming, fishing, food and waste management industries. 

"For a product manufacturer who's gone through the process of understanding the dynamics and sizing of a market, to close a fund because there's little interest is painful," del Ama says. "But you have to put it through the filter of investors not wanting the product."

Todd Rosenbluth, an ETF analyst at S&P Capital IQ, notes that it's hard to keep small ETFs alive for long periods of time, especially for a smaller company such as Global X that lacks a bevy of super-large ETFs that can help offset struggling funds.
But Rosenbluth offers that Global X appeals to a certain segment of investors. "It's a niche player and it serves a need for investors looking for targeted asset allocation," he says.

S&P Capital IQ uses a bottom-up approach to rating ETFs based on analyzing a fund's individual holdings, and it reserves its top "overweight" ranking for ETFs with holdings that combine attractive valuations and modest risk. It has overweight ratings on Global X's FTSE Norway 30 ETF (NORW) and China Financials ETF (CHIX) products.

Regarding Global X's "niche" reputation, del Ama says the company has started to move beyond that during the past year by rolling out products aimed at appealing to a broader audience. These include two dividend-focused ETFs--the Global X SuperDividend ETF (SDIV) and the Global X MLP ETF (MLPA). It also includes the Permanent ETF (PERM), a multi-asset class portfolio with 25% stakes in each of four different asset categories, as well as the Global X Top Guru Holdings Index ETF (GURU), which is described as using a proprietary system to compile the highest-conviction ideas from a select pool of hedge funds based on Form 13F filings.

"In essence, [GURU is] a substitute for the S&P 500 in a portfolio," del Ama says.

Most recently, the company in July launched the Global X SuperIncome Preferred ETF (SPFF) that tracks an index of North American preferred securities (the yield on the underlying index was recently about 7.5%). With its income-oriented products, the company is facing more existing competition than it is with, say, its Global X Fertilizers/Potash ETF (SOIL).

It's All Greek To Me
Despite efforts to broaden its appeal, many investors still know Global X for its niche products, such as the Global X FTSE Greece 20 ETF (GREK) that launched last December. "We understand we took some reputational risk by putting it out there and that it doesn't fit within the broader brand we want to create," del Ama says. "That said, there's something to be said about Greece."