TORONTO, Dec. 13 /CNW/ - Jovian Capital Corporation ("Jovian") (JOV:TSX) and its subsidiary AlphaPro Management Inc. ("AlphaPro"), manager of the Horizons AlphaPro family of exchange traded funds, have launched Canada's first actively managed floating rate bond exchange traded fund, the Horizons AlphaPro Floating Rate Bond ETF (the "Floating Rate Bond ETF" or "HFR").
The Floating Rate Bond ETF will begin trading today on the Toronto Stock Exchange under the symbol HFR. The sub-advisor to the Floating Rate Bond ETF is Natcan Investment Management Inc. ("Natcan").
The investment objective of the Floating Rate Bond ETF is to generate income that is consistent with prevailing short-term corporate bond yields while stabilizing its market value from the effects of interest rate fluctuations.
The Floating Rate Bond ETF invests primarily in a portfolio of Canadian debt securities and hedges the portfolio's interest rate risk to generally maintain a portfolio duration of less than two years. It may also invest in debt securities of U.S. companies, directly, or through investments in securities of other investment funds, including exchange traded funds. The Floating Rate Bond ETF may use derivatives, including interest rate swaps, to deliver a floating rate of income. To the best of its ability, the Floating Rate Bond ETF will seek to hedge its non-Canadian dollar currency exposure to the Canadian dollar at all times.
"The Floating Rate Bond ETF is designed to give investors exposure to a portfolio of quality corporate bond issuers while earning a yield that is anticipated to move as short-term interest rates change," said Ken McCord, President of AlphaPro "This is the third ETF we've launched that is sub-advised by Natcan. They have done an excellent job in managing the Horizons AlphaPro Corporate Bond ETF and we expect the same level of exceptional portfolio management on this ETF as well as the recently launched Horizons AlphaPro Preferred Share ETF."
Natcan will continue to use a comprehensive bond selection process similar to that which it uses for the Horizons AlphaPro Corporate Bond ETF to find quality corporate issues for the Floating Rate Bond ETF's portfolio. Natcan expects the Floating Rate Bond ETF's initial portfolio will hold between 25 and 40 issues, have an average duration of less than 1-year and an average S&P credit rating of A-.
The Floating Rate Bond ETF is initially expected to use an interest rate swap overlay to help achieve its duration target while allowing the yield on the portfolio to fluctuate or float with prevailing Canadian short-term interest rates.
"A corporate bond portfolio that offers a floating interest rate can give income seeking investors peace of mind in knowing that their investment is expected to provide some measure of protection against changing interest rates," Mr. McCord said. "We're offering an investment solution that potentially delivers a much lower risk profile than the majority of corporate bond and high yield options currently available to Canadian investors."
The Floating Rate Bond ETF has closed the offering of its initial units and will begin trading on the Toronto Stock Exchange when the market opens this morning.
References to HFR's initial portfolio composition above are only descriptions of Natcan's current expectation; the composition of the portfolio may change at any time as market conditions change and investment opportunities arise. Commissions, management fees and expenses all may be associated with an investment in the Floating Rate Bond ETF. The Floating Rate Bond ETF is not guaranteed, its value changes frequently and past performance may not be repeated. Please read the prospectus before investing.
About Natcan Investment Management (www.natcan.com)
Founded in 1990, Natcan Investment Management Inc. is a subsidiary of the National Bank of Canada. Since the firm's founding, Natcan has privileged shared ownership between the parent company and its key professionals. Recognized as a leading portfolio management firm in Canada, Natcan provides investment solutions to institutional clients, and acts as sub-advisor for mutual funds and private wealth portfolios. With approximately $25 billion in assets under management as of September 30, 2010, the firm has about 45 investment professionals across its Montreal and Toronto offices.
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 $490 million as of November 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 November 30, 2010. BetaPro is a subsidiary of Jovian.
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 $12.5 billion of client assets ($7.5 billion in assets under management and $5.0 billion in assets under administration). Additional information is available at www.sedar.com.
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
Ken McCord, President, AlphaPro Management Inc., (416) 933-5746.