Alternative Solutions to Diversify Your Portfolio

Large cap U.S. equities set new all-time highs in the first weeks of 2024, prompting some investors to rethink how best to align their portfolios with the evolving market landscape.

Whether you are riding the wave of optimism or bracing for the rally to run out of steam, diversification can be key to reducing risk amid uncertainty. Investors looking to diversify their exposure might consider:

Emerging Market Stocks: Broadly speaking, U.S. investors tend to be underweight in their EM allocations,[1] and low valuations present a window of opportunity as the asset class looks potentially poised for strong growth in 2024.

Covered Calls: Covered call strategies could be an attractive option to generate potential income. Covered call writing historically produces higher yields during periods of volatility, providing a measure of risk management in choppier markets.[2]

Infrastructure: Rollout continues for the Infrastructure Investment and Jobs Act (IIJA), the Inflation Reduction Act (IRA), and the CHIPS and Science Act, as benefits begin to converge and hundreds of billions in federal and private funding continue to fuel momentum in the space.

[1] EM currently account for approximately 11.5% of the global equity market but global equity investors only have a 5.6% allocation to EM equities. (Source: EPFR Global, Thomas Reuters Datastream, HSBC calculations, Global X, data as of 12/31/23)

[2] Covered call writing can limit the upside potential of the underlying security.

Investing involves risk, including the possible loss of principal. Diversification does not ensure a profit or guarantee against a loss. Options strategies may not be suitable for all investors. International investments may involve risk of capital loss from unfavorable fluctuation 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. This information is not intended to be individual or personalized investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.

Carefully consider the funds’ investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the funds’ summary or full prospectus, which may be obtained by calling 888-493-8631 or by visiting globalxetfs.com. Please read the prospectus carefully before investing.

Global X Management Company LLC serves as an advisor to Global X Funds. The Funds are distributed by SEI Investments Distribution Co., which is not affiliated with Global X Management Company LLC.