Canada's Lowest Cost ETF Surpasses $1 Billion in Assets

TORONTO, Feb. 11, 2013 /CNW/ - Horizons Exchange Traded Funds Inc. ("Horizons ETFs") and its affiliate Horizons ETFs Management (Canada) Inc. are pleased to announce that the Horizons S&P/TSX 60 Index ETF ("HXT"), Canada's lowest cost ETF, has joined the select few of Canadian ETFs that have surpassed $1 billion in assets under management.

On October 1, 2012, Horizons ETFs announced a management fee rebate of 2 basis points which is in effect until at least September 30, 2013, reducing the annual management fee on HXT during this time from seven basis points (0.07%) to five basis points (0.05%), plus applicable sales taxes. Since then, HXT has raised more than $600 million in additional assets, more than doubling its size while average daily trading volume has also increased to almost 1 million units.

"The announcement of our fee rebate in October coincided with the two-year anniversary of HXT. Not only does Canada's lowest cost ETF have a lower management fee and a tax efficient structure, it also has a top-ranked track record of performance in its category," said Howard Atkinson, CEO of Horizons Exchange Traded Funds Inc. "The combination of these factors has really put HXT on the radar screen of Canadian investors and brought substantial inflows into the ETF."

Launched in September of 2010, HXT seeks to replicate the performance of the S&P/TSX 60 Index (Total Return), net of expenses. The S&P/TSX 60 Index is comprised of 60 of the largest Canadian publicly traded companies, by market capitalization, and accounts for approximately 64% of Canada's total equity market capitalization.

HXT is less than half the cost of any other S&P/TSX 60 Index ETF in Canada, and is the lowest cost Canadian stock index ETF available anywhere. All else being equal, a lower management fee should lead HXT to higher returns and enhance its ability in 2013 to deliver, even more closely, the returns of the S&P/TSX 60™ Index on a total return basis. HXT was the best performing cap-weighted Canadian large-cap stock index ETF in Canada for 2012, with a 7.99% total return.

"The S&P/TSX 60™ Index is the premier large cap Canadian equity benchmark used by Canadian index investors. Achieving $1 billion in assets is an important milestone for HXT, providing it with more than enough size to support inflows from larger institutional investors," Mr. Atkinson said. "We expect that this latest milestone is just the beginning of strong sales for HXT in 2013 and beyond."

HXT is designed to be tax efficient. The value of any distributions paid out by the index constituents are reflected in the net asset value of HXT, but HXT itself has not made, and does not expect to make, any taxable distributions. The only expected tax implications of owning HXT will occur when an investor sells units for a gain (or loss).

"We anticipate that HXT will become more appealing to investors as they start preparing their tax filings for 2012." said Mr. Atkinson. "The taxes paid on distributions can really add up over time. Investors who both defer and pay less in taxes on their portfolio can generate better compounded performance than those who pay more in taxes on their portfolio year after year."

HXT Annualized Performance (as at December 31, 2012)

  6 Month
(%)
1 Year
(%)
2 Year
(%)
Since Inception*
(%)
HXT Annualized Performance 9.19 7.99 -1.86 3.11
*Inception as of September 14, 2010

Commissions, management fees and applicable sales taxes all may be associated with an investment in HXT. The indicated rates of returns in the table are the historical annual compounded total returns including changes in per unit value and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any HXT unitholder that would have reduced returns. HXT is not guaranteed, its value changes frequently and past performance may not be repeated. Please read the prospectus before investing.

About Horizons Exchange Traded Funds Inc. (www.HorizonsETFs.com)

Horizons ETFs is an innovative financial services company offering the Horizons ETFs family of exchange-traded funds (ETFs). 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 currently more than $4.2 billion in assets under management and 76 ETFs listed on the Toronto Stock Exchange, the Horizons ETFs family makes up one of the largest families of ETFs in Canada. Horizons ETFs is a subsidiary of Horizons ETFs Management (Canada) Inc. and a member of the Mirae Asset Financial Group.

SOURCE: Horizons Exchange Traded Funds Inc.

For further information:

Howard Atkinson, CEO, Horizons Exchange Traded Funds Inc.
(416) 777-5167, hatkinson@horizonsetfs.com

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Horizons Exchange Traded Funds Inc.

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