TORONTO, Oct. 31, 2013 /CNW/ - Horizons ETFs Management (Canada) Inc. ("Horizons ETFs") and its affiliate AlphaPro Management Inc. (the "Manager") announced today that certain changes will take place in respect of
the following exchange traded funds ("ETFs"):
Name of ETF
TSX Ticker Symbol
Class E Units
Horizons Gold Yield ETF ("Horizons HGY")
Horizons Natural Gas Yield ETF ("Horizons HNY")
Changes to the ETFs
Proposed Amendments to Income Tax Act (Canada)
As a result of the proposed amendments to the Income Tax Act (Canada) announced by the Minister of Finance in the federal
government's budget on March 21, 2013 (the "Proposed Amendments") the Manager has determined that the ETFs' forward agreements are no
longer providing material operational efficiency to unitholders of the
ETFs. Specifically, the expiry or termination of the forward agreement
to which an ETF is a party, and any increase to the number of Units of
an ETF outstanding, are each expected to affect the ability of an ETF
to efficiently execute the current investment strategy of the ETFs.
Any new subscriptions for Units of an ETF will not increase the size of
the applicable forward agreement.
As a result of the Manager's determination that the forward agreements
are no longer providing material operational efficiency to unitholders
of the ETFs, each ETF intends to acquire, in the market, the same, or
substantially the same, assets as those held by the applicable
underlying fund (to which an ETF is exposed through its forward
agreement) at the time of the expiry or termination of the current
forward agreement (the "Proposed Transactions" and each a "Proposed Transaction"). Once a Proposed Transaction is completed in respect of an ETF, the
ETF's underlying fund will be terminated in due course.
Changes to Investment Strategy of the ETFs
When the Proposed Transaction described above occurs in respect of an
ETF, the applicable forward agreement will be terminated and the ETF
will acquire, in the market, the same, or substantially the same,
assets as those held by the applicable underlying fund at the time of
the expiration or termination of the applicable forward agreement.
Each ETF will then directly employ the covered call option writing
strategy currently employed by its underlying fund.
The Manager anticipates that the Proposed Transactions and the changes
to the ETFs' investment strategy will, all else being equal, have no
material impact on the performance of the ETFs.
Changes to Fee Structure of the ETFs
The fee structure of the ETFs will also change. On and after December 1,
2013, each ETF will pay annual management fees (the "Management Fees"), calculated and accrued daily and payable monthly in arrears, to the
Manager equal to: (a) an annual percentage of the net asset value of
the Class E Units; and (b) an annual percentage of the net asset value
of the Advisor Class Units, in each case together with applicable Sales
Tax. The Management Fees of the ETFs will be follows:
Class E units
0.60% of the net asset value of Horizons HGY's Class E units
Advisor Class units
1.35% of the net asset value of Horizons HGY's Advisor Class units
Class E units
0.85% of the net asset value of Horizons HNY's Class E units
Advisor Class Unit
1.60% of the net asset value of Horizons HNY's Advisor Class units
The aggregate management fees paid by unitholders in respect of an ETF
will not change as a result of these changes to the fee structure.
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 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 $4.4 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
SOURCE: Horizons Exchange Traded Funds Inc.
For further information:
Howard Atkinson, President, Horizons ETFs Management (Canada) Inc.
(416) 777-5167 or firstname.lastname@example.org