TORONTO, Aug. 16, 2012 /CNW/ - Horizons Exchange Traded Funds Inc. ("Horizons ETFs") and its affiliate AlphaPro Management Inc. ("AlphaPro") are pleased to announce that the Horizons Enhanced U.S. Equity Income Fund (the "Fund") will, subject to regulatory approval, convert into an open-end exchange traded fund and be renamed the Horizons Enhanced US Equity Income ETF (the "ETF") after the close of business on August 31, 2012 (the "Conversion").
Upon completion of the Conversion, the Class E units of the ETF (the "Class E Units") will, subject to regulatory approval, begin trading on the Toronto Stock Exchange ("TSX") on September 3, 2012, under the symbol HES. Concurrent with, but unrelated to, the Conversion, the ETF will begin issuing Advisor Class units (the "Advisor Class Units") which will, subject to regulatory approval, also begin trading on the TSX on September 3 2012, under the symbol HES.A.
The Conversion will not impact the monthly distributions declared for the month of August, which will be declared shortly in a separate press release for the Fund's Class A unitholders of record as of August 31, 2012.
The Fund's Class A units were designed to convert into Class E units of an exchange traded fund at ratios based on the relative net asset values of each. The Class A units of the Fund will convert into Class E Units on a one-for-one (1:1) basis at the close of business on August 31, 2012.
The investment objective of the ETF is to provide its unitholders with: (a) exposure to the performance of an equal weighted portfolio of equity securities of large capitalization U.S. companies; and (b) monthly distributions of dividend and call option income. The ETF will invest primarily in a portfolio of equity and equity-related securities of the 50 largest and most liquid U.S. companies, as measured by market capitalization, listed on the NYSE or the NASDAQ.
The ETF will rebalance, on an equal weight basis, the portfolio of constituent securities on a semi-annual basis. To mitigate downside risk and generate income, the ETF will generally write 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 ETF will generally seek to hedge substantially all of its exposure to the U.S. dollar back to the Canadian dollar and will not have exposure to the U.S. dollar in excess of 50% of its net asset value.
AlphaPro is the manager and trustee of the ETF, and its affiliate Horizons Investment Management Inc., is responsible for implementing the investment strategies of the ETF's Portfolio. Eden Rahim, Vice-President and Options Strategist, with Horizons Investment Management Inc. leads the investment team providing the portfolio management services to the ETF. Mr. Rahim has more than two decades of experience managing options and hedging strategies for institutional clients.
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 $3.4 billion in assets under management and 80 ETFs listed on the TSX, the Horizons ETFs family makes up one of the largest families of ETFs in Canada. Horizons ETFs is a subsidiary of Horizons ETFs Management (Canada) Inc. and a member of the Mirae Asset Financial Group.
SOURCE: Horizons Exchange Traded Funds Inc.
For further information:
Martin Fabregas, Investor Relations, (416) 601-2508 or (866) 641-5739