TORONTO, June 16, 2011 /CNW/ - Horizons Exchange Traded Funds Inc. ("Horizons ETFs") and AlphaPro Management Inc. ("AlphaPro") are pleased to announce the filing of a final prospectus in respect
of the initial public offering of Class A units (the "Units") of the Horizons Enhanced U.S. Equity Income Fund (the "Fund") priced at $10.00 per Unit for a maximum offering size of $100
Million. The offering is expected to close on or about June 29, 2011.
The Toronto Stock Exchange ("TSX") has conditionally approved the listing of the Units under the symbol
(HES.UN), subject to fulfillment of the standard listing requirements
of the TSX. AlphaPro is the manager and trustee of the Fund.
The Fund's investment objectives are to provide holders of Units with:
(a) the performance of an equal weighted portfolio of equity securities
of large capitalization U.S. companies; (b) the opportunity for capital
appreciation; (c) monthly distributions; and (d) lower overall
volatility of portfolio returns than would be experienced by owning the
Portfolio Securities (as defined below) without employing a covered
call option strategy. To mitigate the downside risks associated with
holding the Portfolio Securities, generate cashflow and allow for
potential capital appreciation, the Fund will generally write
short-term, "out-of-the-money" covered call options on 100% of the
Portfolio Securities. The level of covered call option writing may vary
based on market volatility and other factors. The Fund will generally
seek to hedge substantially all of its exposure to the U.S. dollar back
to the Canadian dollar.
The Fund will invest, on an approximately equally weighted basis, in a
portfolio (the "Portfolio") of securities of the 50 largest and most liquid U.S. companies, as
measured by market capitalization, listed on the New York Stock
Exchange or the NASDAQ Stock Market (the "Portfolio Securities"). The Portfolio will be rebalanced semi-annually on an equally
weighted basis. The call options will be written with strike prices
that are generally 5% above the current market price of the Portfolio
Securities, with terms of one to two months depending on the prevailing
levels of volatility.
The Fund's strategy does not involve managing the Portfolio to achieve a
specific distribution target and, therefore, the Fund will not have a
fixed distribution. The Fund intends to pay monthly distributions based
on, among other things, the actual dividends received on the Portfolio
Securities, actual net premiums from call options received in respect
of the month the distribution is paid, and the Fund's estimated
liabilities and expenses, including estimates of near term obligations
relating to closing out option positions that are in-the-money.
In addition, to enhance overall liquidity, the Fund is expected to
automatically convert into an exchange traded fund ("ETF") by no later than November 30, 2012.
The syndicate of agents for the offering is being co-led by CIBC and BMO
Capital Markets, and includes National Bank Financial Inc., TD
Securities Inc., GMP Securities L.P., HSBC Securities (Canada) Inc.,
Canaccord Genuity Corp., Desjardins Securities Inc., Macquarie Private
Wealth Inc., Raymond James Ltd., Dundee Securities Ltd., Industrial
Alliance Securities Inc., Mackie Research Capital Corporation, MGI
Securities Inc., Rothenberg Capital Management Inc. and Wellington West
Capital Markets Inc.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy securities in the United States, nor
shall there be any sale of the securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful. The Units offered
have not been registered under the U.S. Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws and may not be offered or sold in the
United States or to a U.S. person absent registration under the 1933
Act or an applicable exemption from the registration requirements of
the 1933 Act and applicable state securities laws.
This offering is only made by prospectus. The prospectus contains
important detailed information about the securities being offered.
Copies of the prospectus may be obtained from one of the agents above
or on www.sedar.com. Investors should read the prospectus before making an investment
About Horizons Exchange Traded Funds Inc. (www.horizonsetfs.com)
Horizons ETFs is an innovative financial services company offering the
Horizons ETFs family of 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 approximately $3 billion in
assets under management and more than 70 listings on the TSX, the
Horizons ETFs family makes up the largest selection of ETFs in Canada.
Horizons ETFs is a member of the Jovian Capital Corporation (TSX: JOV)
group of companies.
SOURCE HORIZONS ALPHAPRO ETFS
For further information:
please visit www.horizonsetfs.com or contact:
Ken McCord, President, AlphaPro Management Inc., (416) 933-5746 or 1-866-641-5739, email@example.com.