Global X Funds launched the Global X Social Media Index ETF (SOCL), the first ETF to target social media companies. The underlying Solactive Social Media Index is designed to reflect the performance of companies providing social networking, file sharing, and other web-based media applications.

The index methodology allows for a range of 25-50 companies, with current constituents numbering 26. Each stock is weighted by its free float market capitalization. Weightings are capped at 10% as of each 6-month rebalancing. Any index component not considered a “pure social media company” is capped at 4.75%. Additionally, the cumulative weight of all components with greater than a 5% allocation is limited to 48%.

Currently, the process gives China the index’s largest country weighting at 36.9%. Other country representations include the U.S. 26.3%, Japan 19.5%, Russia 9.5%, Germany 2.2%, and others 5.6%.

The fund has 26 holdings as of 11/25/11, including Tencent Holdings Ltd. (China) 10.2%, DeNA Co. Ltd. (Japan) 10.2%, Inc ADR (NTES) 10.1%, Sina Corp US (SINA) 10.1%, Gree Inc. (Japan) 7.8%, Group GDR (MLRUY) 5.1%, Google (GOOG) 4.9%, Yandex NV-A (YNDX) 4.8%, Renren Inc ADR (RENN) 4.7%, and LinkedIn Corp A (LNKD) 4.6%.

The indexing methodology also allows for the quick inclusion of IPOs. Angie’s List (ANGI) was listed on November 17 and is already part of the fund’s holdings. Recently-issued Groupon (GRPN) was originally capped at 4.75%, but now stands at only a 3.7% weighting thanks to a -36% drubbing last week.

SOCL has a maximum expense ratio of 0.65%. Additional information can be found in the press release (pdf), overview page, profile sheet (pdf), fact sheet (pdf), and prospectus (pdf).