Horizons ETFs announces new name for HAF
TORONTO, Aug. 26, 2013 /CNW/ - Horizons ETFs Management (Canada) Inc. ("Horizons ETFs") and its affiliate AlphaPro Management Inc. (the "Manager") announced today that it will change the name of the Horizons Active Advantage Yield ETF ("HAF" or the "ETF") to the Horizons Active Yield Matched Duration ETF. This name change is intended to emphasize the risk-mitigation strategy employed by the ETF to attempt to limit the negative impact that future interest rate increases could have on the value of the ETF. The name change is expected to take effect on September 6, 2013.
HAF's investment objective and sub-advisor, Fiera Capital Corporation ("Fiera"), will remain the same.
Fiera's risk-mitigation strategy seeks to match HAF's yield with its duration. Generally speaking, an interest rate increase of 1% can be expected to cause a 1% decline in the value of a fixed income security for every year of its duration (a measure of the interest rate sensitivity of a fixed income security). By matching duration with yield, HAF aims to mitigate the negative effects of interest rate increases. This strategy complements Fiera's process of selecting fixed income securities based on independent economic, interest rate and credit rating analyses to determine which securities offer the best risk-adjusted return potential.
"HAF is an attractive ETF for investors looking for a low-cost, actively managed global fixed income solution. Fiera is one of the largest fixed income managers in Canada, and its tactical fixed income team has extensive experience in identifying compelling yield opportunities around the world," said Howard Atkinson, President of Horizons ETFs.
"Many investors want to maintain an allocation to bonds, but being a bond investor today has rarely been riskier. With interest rates near historic lows, investors are forced to stretch for yield, which could heighten portfolio risk if rates suddenly rise, as they did in June, causing losses in most Canadian fixed income ETFs," said Atkinson. "The yield/duration matching strategy that HAF employs adds another layer of risk-mitigation."
In addition to the name change, HAF's fee structure will also change. On and after September 1, 2013, the ETF will pay revised management fees, calculated and accrued daily and payable monthly in arrears, to the Manager equal to: (a) 0.45% of the net asset value of the Class E units of the ETF; and (b) 0.95% of the net asset value of the Advisor Class units of the ETF, in each case together with applicable Sales Tax. The aggregate management fees that the Manager receives in respect of HAF will not change as a result of this new fee structure.
Additionally, until March 31, 2013, the Manager was entitled to receive a performance fee. Effective March 31, 2013, the performance fee was removed.
Additional information regarding the fee structure change will be available in the ETF's prospectus.
Commissions, trailing commissions, management fees and expenses all may be associated with an investment in the ETF. The ETF is not guaranteed, its values change frequently and past performance may not be repeated. Please read the prospectus before investing.
About Horizons ETFs Management (Canada) Inc. (www.HorizonsETFs.com)
Horizons ETFs is an innovative financial services company offering the Horizons ETFs family of exchange-traded funds. The Horizons ETFs family includes a broadly diversified range of investment tools with solutions for investors of all experience levels to meet their investment objectives in a variety of market conditions. With approximately $4.1 billion in assets under management and 70 ETFs listed on the TSX, the Horizons ETFs family makes up one of the largest families of ETFs in Canada. Horizons ETFs is a member of the Mirae Asset Financial Group.
SOURCE Horizons ETFs Management (Canada) Inc.For further information:
Howard Atkinson, President, Horizons ETFs Management (Canada) Inc., (416) 777-5167