TORONTO, Aug. 25,
2023 /CNW/ - Horizons ETFs Management (Canada) Inc. ("Horizons ETFs" or the
"Manager") announced today that it has substantially
completed its changes (the "Changes") for three
exchange-traded funds within its asset allocation ETF suite,
currently, the Horizons Conservative Asset Allocation ETF
("HCON"), the Horizons Balanced Asset Allocation ETF
("HBAL"), and the Horizons All-Equity Asset Allocation ETF
("HEQT" and together, the "ETFs").
The Changes follow approvals by unitholders of the ETFs at
special meetings held on August 23,
2023. The Changes to the investment objectives (including
changes to the currency hedging strategy of each ETF), the fee
structure, and distribution policy of each ETF are effective at the
opening of trading today, August 25,
2023.
The ETFs are part of Horizons ETFs' asset allocation family – a
suite of ETFs that provide multi-asset global equity and fixed
income exposure and are designed to deliver a combination of income
and long-term capital growth.
"Asset allocation ETFs continue to be an important solution
for investors seeking simple, low-cost and
well-diversified portfolios," said Rohit Mehta, President and CEO of Horizons ETFs.
"Our improvements to our asset allocation ETF suite are a
recognition and a reflection of the growing demand among Canadians
for investments that can simultaneously offer the potential for
both income and long-term capital growth."
The changes to each ETFs' investment objective are substantially
as follows:
|
ETF
|
Prior Investment
Objective
|
New Investment
Objective
|
|
HCON
|
The investment
objective of the ETF is to seek moderate long-term capital growth
using a conservative portfolio of exchange traded funds.
|
The ETF seeks to
provide a combination of income and moderate long-term capital
growth, primarily by investing in exchange traded funds that
provide exposure to a globally diversified portfolio of fixed
income and equity securities.
|
|
HBAL
|
The investment
objective of the ETF is to seek long-term capital growth using a
balanced portfolio of exchange traded funds.
|
The ETF seeks to
provide a combination of long-term capital growth and a moderate
level of income, primarily by investing in exchange traded funds
that provide exposure to a globally diversified portfolio of equity
and fixed income securities.
|
|
HGRO
|
The investment
objective of the ETF is to seek long-term capital growth using a
portfolio of primarily equity-focussed exchange traded
funds.
|
The ETF seeks to
provide long-term capital growth, primarily by investing in
exchange traded funds that provide exposure to a globally
diversified portfolio of equity securities.
|
The changes to each ETFs' currency hedging strategy are
substantially as follows:
|
ETF
|
Prior Currency
Hedging Disclosure
|
New Currency Hedging
Disclosure
|
|
HCON
|
HCON will use currency
forwards to hedge its non-Canadian dollar currency exposure to the
Canadian dollar at all times.
|
The ETF, at its sole
discretion, may elect to hedge the foreign currency exposure of its
fixed income investments back to the Canadian dollar through the
use of currency forwards or investments in hedged fixed income
exchange traded funds. The ETF will not hedge the foreign currency
exposure of any asset class other than fixed income.
|
|
HBAL
|
HBAL will use currency
forwards to hedge its non-Canadian dollar currency exposure to the
Canadian dollar at all times.
|
The ETF, at its sole
discretion, may elect to hedge the foreign currency exposure of its
fixed income investments back to the Canadian dollar through the
use of currency forwards or investments in hedged fixed income
exchange traded funds. The ETF will not hedge the foreign currency
exposure of any asset class other than fixed income.
|
|
HGRO
|
HGRO will use currency
forwards to hedge its non-Canadian dollar currency exposure to the
Canadian dollar at all times.
|
The ETF will not hedge
its exposure to foreign currencies back to the Canadian
dollar.
|
The changes to each ETF's fee structure are substantially as
follows:
|
ETF
|
Prior Management Fee
Disclosure
|
Current Management
Fee Disclosure
|
|
HCON
|
The management fees
directly payable to the Manager by each ETF are nil.
However, the total
return index exchange traded funds managed by the Manager ("TRI
ETFs") and held by the ETFs will pay management fees and will
incur trading expenses.
The Manager pays all of
the operating and administrative expenses incurred by the ETFs.
Based on the historical management expense ratios of the portfolios
of TRI ETFs held by the ETFs, the total management expense ratios
of HCON, HBAL and HGRO, for the 2022 calendar year, are expected to
be approximately 0.14%, 0.15% and 0.16%, respectively, and will not
exceed 0.15%, 0.16% and 0.17%, respectively, as at any
rebalance.
Based on historical
trading expense ratios of the TRI ETFs held by the ETFs, the
aggregate underlying trading expense ratios of the portfolios of
TRI ETFs held by HCON, HBAL and HGRO, for the 2022 calendar year,
are expected to be approximately 0.10%, 0.09% and 0.08%,
respectively, and are not expected to exceed 0.11%, 0.10% and
0.10%, respectively. As trading expense ratios include expenses
outside of the control of the Manager, the trading expense ratios
of the portfolios of TRI ETFs held by HCON, HBAL and HGRO are
subject to change.
|
Each ETF pays annual
management fees (the "Management Fees") to the Manager equal
to 0.18% of the net asset value of the Units of that ETF, plus
applicable Sales Tax. The Management Fees are calculated and
accrued daily and payable monthly in arrears.
The Manager pays all of
the operating and administrative expenses incurred by the ETFs. The
total management expense ratios of HCON, HBAL, and HGRO are
expected to be approximately 0.20%.
The trading expense
ratio of each ETF is expected to be 0.02%. As trading expense
ratios include expenses outside of the control of the Manager, the
trading expense ratios of the portfolios held by an ETF are subject
to change.
|
|
HBAL
|
Same as
above
|
Same as
above
|
|
HGRO
|
Same as
above
|
Same as
above
|
The Manager is changing the names of each ETF to the names set
forth in the following table, effective at the opening of trading
today, August 25, 2023.
|
ETF
|
Prior ETF
Name
|
New ETF
Name
|
|
HCON
|
Horizons Conservative
TRI ETF Portfolio
|
Horizons Conservative
Asset Allocation ETF
|
|
HBAL
|
Horizons Balanced TRI
ETF Portfolio
|
Horizons Balanced Asset
Allocation ETF
|
|
HGRO
|
Horizons Growth TRI ETF
Portfolio
|
Horizons All-Equity
Asset Allocation ETF
|
Additionally, the Manager is changing the ticker symbol of HGRO
as follows:
|
ETF
|
Prior Ticker
Symbol
|
New Ticker
Symbol
|
|
Horizons Growth TRI ETF
Portfolio
|
HGRO
|
HEQT
|
The change to the ticker symbol of HGRO will be effective at the
opening of trading today, August 25,
2023. The ticker symbols for each of HCON and HBAL will
remain the same.
In connection with the Changes, the Manager expects that
each ETF will make distributions to its unitholders on a
monthly basis. Monthly distributions will be paid in cash.
Unitholders can elect to participate in the distribution
reinvestment plan for the ETFs. For further information regarding
distributions, please read the prospectus and visit
www.HorizonsETFs.com.
Further details regarding the Changes can be found at
www.sedarplus.com and www.HorizonsETFs.com.
About Horizons ETFs Management
(Canada) Inc.
(www.HorizonsETFs.com)
Horizons ETFs Management (Canada) Inc. is an innovative financial
services company with one of the largest suites of exchange traded
funds in Canada. The Horizons ETFs
product family includes a broadly diversified range of solutions
for investors of all experience levels to meet their investment
objectives in a variety of market conditions. Horizons ETFs
currently has more than $27 billion
of assets under management and 110 ETFs listed on major Canadian
stock exchanges. Horizons ETFs is a wholly owned subsidiary of the
Mirae Asset Financial Group, which manages approximately
$710 billion of assets across 13
countries around the world.
Commissions, management fees and expenses all may be
associated with an investment in exchange traded products managed
by Horizons ETFs Management (Canada) Inc. (the "Horizons Exchange Traded
Products"). The Horizons Exchange Traded Products are not
guaranteed, their value changes frequently and past performance may
not be repeated. Certain Horizons Exchange Traded Products may have
exposure to leveraged investment techniques that magnify gains and
losses and which may result in greater volatility in value and
could be subject to aggressive investment risk and price volatility
risk. Such risks are described in the prospectus. The prospectus
contains important detailed information about the Horizons Exchange
Traded Products. Please read the relevant prospectus before
investing.
Horizons Total Return
Index ETFs ("Horizons TRI ETFs") are generally
index-tracking ETFs that use an innovative investment
structure known as a Total Return Swap to deliver index returns in
a low-cost and tax-efficient manner. Unlike a physical
replication ETF that typically purchases the securities
found in the relevant index in the same proportions as the index,
most Horizons TRI ETFs use a synthetic structure
that never buys the securities of an index directly. Instead,
the ETF receives the total return of the index through
entering into a Total Return Swap agreement with one or more
counterparties, typically large financial institutions, which will
provide the ETF with the total return of the index in
exchange for the interest earned on the cash held by the ETF.
Any distributions which are paid by the index constituents are
reflected automatically in the net asset value (NAV) of
the ETF. As a result, the
Horizons TRI ETF receives the total return of the
index (before fees), which is reflected in
the ETF's share price, and investors are not expected to
receive any taxable distributions. Certain
Horizons TRI ETFs (Horizons Nasdaq-100 ®
Index ETF and Horizons US Large Cap Index ETF) use
physical replication instead of a total return swap. The Horizons
Cash Maximizer ETF and Horizons USD
Cash Maximizer ETF use cash accounts and do not
track an index but rather receive interest paid on cash deposits
that can change over time.
Certain statements may constitute a forward-looking
statement, including those identified by the expression "expect"
and similar expressions (including grammatical variations thereof).
The forward-looking statements are not historical facts but reflect
the author's current expectations regarding future results or
events. These forward-looking statements are subject to a number of
risks and uncertainties that could cause actual results or events
to differ materially from current expectations. These and other
factors should be considered carefully and readers should not place
undue reliance on such forward-looking statements. These
forward-looking statements are made as of the date hereof and the
authors do not undertake to update any forward-looking statement
that is contained herein, whether as a result of new information,
future events or otherwise, unless required by applicable
law.
This communication is intended for informational purposes
only and does not constitute an offer to sell or the solicitation
of an offer to purchase exchange traded products (the "Horizons
Exchange Traded Products") managed by
Horizons ETFs Management (Canada) Inc. and is not, and should not be
construed as, investment, tax, legal or accounting advice, and
should not be relied upon in that regard. Individuals should seek
the advice of professionals, as appropriate, regarding any
particular investment. Investors should consult their professional
advisors prior to implementing any changes to their investment
strategies. These investments may not be suitable to the
circumstances of an investor.
SOURCE Horizons ETFs Management (Canada) Inc.