Global X launched a new equity ETF on Tuesday (3/15/11) that attempts to achieve high correlation to crude oil spot prices. Global X Oil Equities ETF (XOIL) provides exposure to pure-play oil companies with significant oil reserves that are typically not involved in other industries such as natural gas or downstream operations.
The underlying Solactive Global Oil Equities Index tracks the performance of 25 equal-weighted companies that have shown a high correlation to the spot price of oil. Constituents are ranked and chosen by their correlation to the spot price of oil in the quarter preceding the selection day. The index has a global mandate, but only North American stocks passed the most recent correlation screen with 80% currently allocated to the U.S. and 20% to Canada.