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Global X Funds, a New York-based provider of exchange-traded funds (ETFs), has announced the launch of the Global X FTSE Portugal 20 ETF (PGAL), the first US-listed ETF to focus exclusively on Portugal.
The fund is linked to the FTSE Portugal 20 Index and has been listed on the NYSE Arca.
The FTSE Portugal 20 Index represents the performance of 20 of the largest Portuguese listed companies ranked by full market capitalization, subject to certain liquidity criteria. The underlying equities trade on the NYSE Euronext Lisbon.
The fund has significant weights in utilities (26.2%), consumer services (22.9%), financials (15.5%) and materials. Major holdings include EDP (20.0%), Galp Energia (14.4%), Jeronimo Martins (13.3%), Banco Espirito Santo (5.0%) and Sonae (4.9%).
Commenting on the launch, Bruno del Ama, chief executive officer of Global X Funds, said: “PGAL provides cost-effective access to the Portuguese equity market. There are a number of encouraging signs coming out of Portugal, and we believe the country is at an inflection point where the Portuguese economy is starting to find its footing.”
A range of indicators suggests investors may begin to pay renewed attention to Portuguese equities. These include the Bank of Portugal’s expectation that the country will generate positive GDP growth in 2014 and that the Portuguese government is set to achieve a budget surplus of approximately 3.5% in 2014 after the European Central Bank’s aid programme ends.
Jay Jacobs, research analyst at Global X Funds, said: “As Europe continues its recovery from the sovereign debt crisis, we see a compelling opportunity for investors to obtain exposure to Portuguese equities.”
The new fund complements Global X Fund’s existing suite of European ETFs, which include the Global X FTSE Greece 20 ETF (GREK), the Global X FTSE Nordic Region ETF (GXF) and the Global X FTSE Norway 30 ETF (NORW).
The fund has total annual expenses of 0.61%.
European investors looking for exposure to Portugal could consider the ComStage PSI 20 UCITS ETF (CD47) listed on Xetra. This fund is linked to the PSI 20 Index which tracks the prices of the twenty listings with the largest market capitalisation and share turnover on the NYSE Euronext Lisbon exchange.