Horizons ETFs Launches Canada's First Floating Rate Preferred Share ETF

TORONTO, Oct. 2, 2013 /CNW/ - Horizons ETFs Management (Canada) Inc. ("Horizons ETFs") and its affiliate AlphaPro Management Inc. are pleased to announce the launch of the Horizons Active Floating Rate Preferred Share ETF ("HFP"), which will for the first time give Canadian investors the opportunity to gain floating rate exposure from North American preferred shares through an exchange traded fund.

Class E units and Advisor Class units of the HFP will begin trading today on the Toronto Stock Exchange ("TSX") under the ticker symbols below.

Name of ETF TSX Ticker Symbol
Class E Units Advisor Class Units
Horizons Active Floating Rate Preferred Share ETF HFP HFP.A


HFP will seek to generate income consistent with prevailing short-term preferred share yields while stabilizing its market value from the effects of interest rate fluctuations. HFP will invest primarily in the preferred shares of Canadian companies. It may also invest, to a lesser extent, in the preferred shares of companies located in the United States, as well as the fixed-income securities of Canadian and U.S. issuers, including other income-generating securities and exchange traded funds.

HFP will generally maintain a portfolio duration of less than two years. Duration is an important metric generally used to gauge the interest rate sensitivity of a fixed-income security that has a maturity, call or reset date. Typically, the longer the duration of such a security, the more sensitive its market price will be to interest rate fluctuations.

"Preferred shares have become popular with Canadian investors looking for a higher level of tax-efficient income in today's low-rate environment," said Howard Atkinson, President of Horizons ETFs. "However, preferred shares have demonstrated that their prices can be just as sensitive to interest rate fluctuations as bond prices, as we saw in June of this year, when a slight rise in rates caused a sharp decline in the market prices of many preferred shares. We feel it's important to bring to the market an ETF that can offer a floating rate of income and a much lower risk profile than other options available to Canadian preferred share investors."

HFP will be sub-advised by Fiera Capital Corporation ("Fiera"), one of the largest preferred share managers in Canada. It will be overseen by the same portfolio management team that sub-advises the Horizons Active Floating Rate Bond ETF (HFR:TSX) and the Horizons Active Preferred Share ETF (HPR:TSX).

"HFR, our floating rate bond ETF, has attracted more than $200 million in assets over the last 12 months, which we attribute to growing concerns over interest rates, as well as to Fiera's excellent performance track record," said Mr. Atkinson. "HFP will offer a similar floating rate approach to preferred shares combined with the exceptional preferred share management capabilities of Fiera."

HFP has closed the offering of its initial Class E units and Advisor Class units and will begin trading on the TSX when the market opens this morning.

Commissions, trailing commissions, management fees and expenses all may be associated with an investment in exchange traded funds. Exchange traded funds are not guaranteed, their values change frequently and past performance may not be repeated. The prospectus contains important detailed information. Please read the prospectus before investing.

Certain statements contained in this news release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as "may," "will," "should," "expect," "anticipate," "believe," "intend" or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Horizons ETFs undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

About Fiera Capital Corporation (www.FieraCapital.ca)
With close to $66 billion in assets under management, Fiera is a prominent Canadian investment management firm. It is one of only a handful of independent investment firms providing extensive expertise in Canadian active and structured fixed income, Canadian and foreign equity, asset allocation and non-traditional investment solutions through a broad range of strategies and services. Fiera believes that integrated solutions diversified by asset class and investment style, and supported by a disciplined risk management framework, are key to achieving superior returns.

About Horizons ETFs Management (Canada) Inc. (www.HorizonsETFs.com)
Horizons ETFs Management (Canada) Inc. and its affiliate AlphaPro Management Inc. are innovative financial services companies 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 73 ETFs listed on the TSX, the Horizons ETFs family makes up one of the largest families of ETFs in Canada. Horizons ETFs Management (Canada) Inc. and AlphaPro Management Inc. are members of the Mirae Asset Global Investments Group. 

 

SOURCE: Horizons ETFs Management (Canada) Inc.

For further information:

Howard Atkinson, President, Horizons ETFs Management (Canada) Inc.
(416) 777-5167 or hatkinson@horizonsetfs.com


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