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Global X S&P 500 Index Corporate Class ETF (HXS)
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Global X S&P/TSX 60 Index Corporate Class ETF (HXT)
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Global X Cash Maximizer Corporate Class ETF (HSAV)
Q: Global X total return funds have been your recommendation for taxable accounts for quite a while. However, recently, I have observed an alarming trend with the largest of their ETFs, such as HXS, HXT, and HSAV: the premiums have been shrinking significantly, and HXS now trades below NAV. I have more than half of my investments in these three funds, so I am really concerned about this situation. Do you have any explanation as to why the premiums on total return funds have been shrinking and even turned into discounts?
5i Research Answer:
HXS was at a 0.10% premium yesterday; HXT was 0.96%; HSAV was 0.12%. On the latter, Global X has discouraged investors from paying a premium, and this has likely impacted investor interest somewhat. We can't really explain the others, though both are now back at premiums. Any discount is likely related to investor year-end positioning, or simply supply imbalances. We would not see reason for concern.