TORONTO, Sept. 9, 2014 /CNW/ - Horizons ETFs Management (Canada) Inc. and its affiliate AlphaPro Management Inc. (collectively "Horizons ETFs") are pleased to announce a change to the management fee structure of the Horizons S&P/TSX 60 Equal Weight Index ETF ("HEW").
The change, which is effective immediately, reduces the annual management fee to 0.40% or 40 basis points on any portion of the net assets of HEW over $30 million (the "Fee Reduction"). Previously, the annual management fee was 0.50% on all of the net assets of HEW. The current net assets of HEW are more than $32 million so the Fee Reduction has an immediate impact on the fees charged to HEW and its unitholders will benefit further should the ETF grow in size. HEW's management fees are calculated and accrued daily and payable monthly in arrears.
HEW is the only ETF in Canada to track the S&P/TSX 60 Equal Weight Index (the "Index"). Rather than weight each of the 60 stocks in the Index by their market capitalization, which is the traditional way most large cap stock indices determine stock weights, the Index is rebalanced on a quarterly basis so that each of the 60 constituents is assigned an equal weight.
"The Canadian stock market is heavily concentrated amongst a handful of stocks in three sectors: financials, energy and materials. An equal weight approach tends to reduce the heavy weightings to the largest stocks in the index and provide greater sector diversification," said Howard Atkinson, President of Horizons ETFs. "Generally speaking, greater diversification is a good thing for a portfolio, since we know that the performance of certain sectors and stocks will vary in different market conditions. The quarterly rebalance feature of the Index reduces positions in stocks that have gone up the most and reallocates those proceeds to stocks that have lagged. In effect, the equal weight index sells high and buys low."
This announcement of the Fee Reduction closely follows Horizons ETFs' announcement last week of the continuation of the 2 basis points fee reduction to the annual management fee to its Horizons S&P/TSX 60™ Index ETF (HXT).
"Like any index strategy, fees are a key determinant of long term performance, so we believe this fee reduction only enhances the appeal of HEW for Canadian index investors," Mr. Atkinson said.
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. Horizons ETFs has more than $4.5 billion of assets under management and with 71 ETFs listed on the Toronto Stock Exchange, 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.
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.
SOURCE: Horizons ETFs Management (Canada) Inc.
For further information: Howard Atkinson, President, Horizons ETFs Management (Canada) Inc., (416) 777-5167, firstname.lastname@example.org