TORONTO, Dec. 16 /CNW/ - Jovian Capital Corporation ("Jovian") (JOV:TSX) and its subsidiary BetaPro Management Inc. ("BetaPro"), the manager of the Horizons BetaPro family of exchange traded funds, are pleased to announce the launch of two new exchange traded funds ("ETFs"), the Horizons BetaPro S&P 500 VIX Short-Term Futures™ ETF ("HBP Single VIX ETF" or "HUV") and the Horizons BetaPro S&P 500 VIX Short-Term Futures™ Bull Plus ETF ("HBP Double VIX ETF" or "HVU") (together, the "VIX ETFs") which track the performance of the S&P 500 VIX Short-Term Futures™ Index (the "S&P VIX S-T Index").
These are the first Canadian ETFs tracking the S&P VIX S-T Index, and the HBP Double VIX ETF is the first two-times leveraged ETF tracking the S&P VIX S-T Index to be offered in the world.
The HBP Single VIX ETF is designed to provide investment results, before fees, expenses, distributions, brokerage commissions and other transaction costs, that endeavour to correspond to the performance of the S&P VIX S-T Index. Any U.S. dollar gains or losses as a result of the HBP Single VIX ETF's investments will be hedged back to the Canadian dollar to the best of its ability.
The HBP Double VIX ETF is designed to provide daily investment results, before fees, expenses, distributions, brokerage commissions and other transaction costs, that endeavour to correspond to twice the daily performance of the S&P VIX S-T Index. Any U.S. dollar gains or losses as a result of the HBP Double VIX ETF's investments will be hedged back to the Canadian dollar to the best of its ability. The HBP Double VIX ETF does not seek to achieve its stated investment objective over a period of time greater than one day.
The ticker symbols for the VIX ETFs are as follows:
|Name of ETF|| TSX Ticker
|Horizons BetaPro S&P 500 VIX Short-Term Futures™ ETF||HUV|
|Horizons BetaPro S&P 500 VIX Short-Term Futures™ Bull Plus ETF||HVU|
"These two new ETFs offer investors the opportunity to gain exposure to changes in levels of volatility in the U.S. stock market," said Howard Atkinson, President of BetaPro. "Therefore stock market volatility does not necessarily need to be something that investors have to fear."
Investors cannot gain direct exposure to the Chicago Board of Exchange's Volatility Index (the "VIX Index"), which is commonly used as a measure of U.S. stock market's implied volatility. The S&P VIX S-T Index is a volatility index that is comprised of first and second month futures contracts that are based on the VIX Index (the "VIX Futures"), with the price of the VIX Futures reflecting the market's expectation of future volatility. The S&P VIX S-T Index can be replicated by sophisticated investors using the exchange listed VIX Futures and using the S&P VIX S-T Index methodology, which is available on the Horizons BetaPro ETFs website (www.hbpetfs.com).
"You cannot invest directly in CBOE's VIX Index, but our ETFs will allow investors to access the volatility of the S&P500® Index," Mr. Atkinson said.
Historically, sharp spikes in market volatility occur only during short periods of time. HUV and HVU can be used for diversification or as a partial hedge against market conditions and it is strongly recommended that these ETFs only be used for short periods of time and are monitored on a daily basis.
Similar to most other BetaPro ETFs, HUV and HVU use a forward agreement linked to an underlying index inside the exchange traded fund structure. Returns of the ETFs will be, to the best of the manager's ability, hedged back into Canadian dollars, reflecting the need for Canadian investors to reduce currency risk with equity holdings valued in U.S. dollars.
HUV and HVU have closed the offering of their initial units and will begin trading on the Toronto Stock Exchange on December 16, 2010, when the market opens this morning.
About BetaPro Management Inc. (www.hbpetfs.com)
The Horizons BetaPro family of exchange traded funds (the "Horizons BetaPro ETFs") are managed by BetaPro, Canada's sole provider of investment tools allowing investors to profit when the market is rising or falling or to reduce their risk by hedging their existing market exposure. The Horizons BetaPro ETFs offer several types of structures: single, inverse, leveraged and spread ETFs. BetaPro is a subsidiary of Jovian Capital Corporation and has assets under management of approximately $2.4 billion as of November 30, 2010, amongst 45 ETFs.
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., 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 approximately $12.5 billion of client assets ($7.5 billion in assets under management and $5 billion in assets under administration). Additional information is available at www.joviancapital.com and www.sedar.com.
The HBP Double VIX ETF is subject to leverage risk and uses leveraged investment techniques that magnify gains and losses and result in greater volatility in value. The VIX ETFs are speculative investment tools, are not conventional investments and are subject to aggressive investment risk and price volatility risk, which are described in the HBP VIX ETFs' prospectus. Due to the compounding of daily returns, the HBP Double VIX ETF's returns over periods other than one day will likely differ in amount and possibly direction from the performance of the S&P VIX S-T Index for the same period. The S&P VIX S-T Index tracks market volatility, not market returns, and has tended to have a low to negative correlation to equity market returns. The S&P VIX S-T Index is highly volatile. As a result, it is not generally viewed as a stand-alone long term investment. Historically, the S&P VIX S-T Index has tended to revert to a historical mean. As a result, the performance of the S&P VIX S-T Index is expected to be negative over the longer term and neither the VIX ETFs nor the S&P VIX S-T Index are expected to have positive long term performance. Investors should monitor their holdings, as frequently as daily, to ensure that they remain consistent with their investment strategies. Commissions, management fees and expenses all may be associated with investment in the HBP VIX ETFs. The HBP VIX ETFs are not guaranteed, their values change frequently and past performance may not be repeated. "Standard & Poor's®" and "S&P®" are registered trademarks of Standard & Poor's Financial Services LLC ("S&P"). This mark has been licensed for use by BetaPro Management Inc. The HBP VIX ETFs are not sponsored, endorsed, sold, or promoted by S&P or its affiliated companies and S&P does not make any representation, warranty or condition regarding the advisability of buying, selling and holding units in the HBP VIX ETFs. Please read the prospectus before investing.
For further information: For further information:
Philip Armstrong, Chief Executive Officer, Jovian Capital Corporation, (416) 933-5752; or
Don Sangster, Investor Relations, Jovian Capital Corporation, (416) 933-5744; or
Howard Atkinson, President, BetaPro Management Inc., (416) 777-5167.