TORONTO, July 14 /CNW/ - Jovian Capital Corporation ("Jovian") (JOV: TSX) and its subsidiary AlphaPro Management Inc. ("AlphaPro"), the manager of the Horizons AlphaPro family of exchange traded funds ("ETFs"), is pleased to announce the listing of the first and only ETF in Canada to track the recently created S&P/TSX 60(TM) Equal Weight Index (the "Equal Weight Index"). The Horizons AlphaPro S&P/TSX 60 Equal Weight Index ETF (the "Equal Weight ETF") will begin trading today on the Toronto Stock Exchange (the "TSX") under the symbol HEW.
The Equal Weight ETF will seek to replicate the performance of the Equal Weight Index, net of expenses.
The Equal Weight Index and the S&P/TSX 60(TM) Index are comprised of 60 of the largest (by market capitalization) and most liquid securities listed on the TSX, selected by Standard & Poor's using its industrial classifications and guidelines for evaluating issuer capitalization, liquidity and fundamentals.
As its name implies, the Equal Weight Index assigns an equal weight to each of the constituent 60 Canadian stocks in the S&P/TSX 60(TM) Index and is rebalanced on a quarterly basis.
ETFs that use the S&P/TSX 60(TM) Index as a benchmark represent a large proportion of Canadian ETF assets. The S&P/TSX 60(TM) Index uses a market-capitalization weighting ("Cap-Weighted") methodology. A Cap-Weighted methodology assigns a weight to each constituent issuer based on its market capitalization and is not rebalanced.
As of June 21, 2010, the last rebalance date of the Equal Weight Index, the 10 largest constituents represented more than 45.4% of the weight of the S&P/TSX 60(TM) Index, whereas these same 10 stocks represented less than 17% of the weight of the Equal Weight Index. In addition, 32.9 % of the S&P/TSX 60(TM) Index was concentrated in the financial sector, while only 16.7% of the Equal Weight Index was in that sector.
"Using an equal weight methodology versus a cap-weighted methodology can result in some subtle but meaningful differences in the composition of an index," said Ken McCord, President of AlphaPro. "Using an equal weight methodology tends to lower the sector concentration of an index and assigns greater exposure to smaller companies in the index."
Mr. McCord points out that investors who allocate all or a portion of their Canadian equity index assets to an equal weight index should be able to reduce both the sector and single stock risks associated with the cap-weighted index.
"An equal weight methodology reduces industry sector concentration. It allocates greater weighting to sectors such as industrials, healthcare, and consumer staples, which can offer greater diversification within an investor's portfolio," Mr. McCord said. "At each quarterly rebalancing, 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."
The Equal Weight ETF has closed the offering of its initial units and will begin trading on the Toronto Stock Exchange today when it opens this morning.
Commissions, trailing commissions, management fees and expenses all may be associated with an investment in the Equal Weight ETF. The Equal Weight ETF is not guaranteed, its value changes frequently and past performance may not be repeated. "Standard & Poor's(R)" and "S&P(R)" are registered trademarks of Standard & Poor's Financial Services LLC ("S&P") and "TSX(R)" is a registered trademark of the TSX Inc. ("TSX"). These marks have been licensed for use by AlphaPro Management Inc. The Equal Weight ETF is not sponsored, endorsed, sold, or promoted by Standard & Poor's or TSX or their affiliated companies and none of these parties make any representation, warranty or condition regarding the advisability of buying, selling or holding units/shares of the Equal Weight ETF. Please read the prospectus before investing.
About AlphaPro Management Inc. (www.HAPETFs.com)
AlphaPro is an innovative financial services company specializing in actively managed exchange traded funds with assets under management of approximately $153 million as of June 30, 2010. AlphaPro is a subsidiary of BetaPro Management Inc. ("BetaPro"). BetaPro is Canada's largest provider of leveraged, inverse leveraged and inverse ETFs. BetaPro manages approximately $2.4 billion in assets as of June 30, 2010. BetaPro is a subsidiary of Jovian Capital Corporation (JOV: TSX).
About Jovian Capital Corporation (www.joviancapital.com)
Jovian acquires, creates and grows financial services companies specializing in wealth and asset management. The Jovian group of companies (AlphaPro Management Inc., BetaPro Management Inc., Horizons Exchange Traded Funds Inc., Hahn Investment Stewards & Company Inc., Horizons Funds Inc., JovFunds Management Inc., JovInvestment Management Inc., Leon Frazer & Associates Inc., MGI Financial Inc., MGI Securities Inc., MGI Securities (USA) Inc. and T.E. Wealth) manages $11.5 billion of client assets ($6.5 billion in assets under management and $5.0 billion in assets under administration). Additional information is available at www.sedar.com.
SOURCE Jovian Capital Corporation
For further information: For further information: Philip Armstrong, Chief Executive Officer, Jovian Capital Corporation, (416) 933-5752; Don Sangster, Investor Relations, Jovian Capital Corporation, (416) 933-5744; or Howard Atkinson, President, BetaPro Management Inc., (416) 777-5167