TORONTO, April 9, 2014 /CNW/ - Horizons ETFs Management (Canada) Inc. and its affiliate AlphaPro Management Inc. (collectively "Horizons ETFs") are pleased to announce that AlphaPro's family of actively managed and specialty exchange traded funds ("Active ETFs") has reached $2 billion in assets under management ("AUM").
Horizons ETFs offers 28 Active ETFs managed by various portfolio managers, who aim to deliver better risk-adjusted returns than the broader markets they invest in or reference. This is unlike passive or index-tracking ETFs, also offered by Horizons ETFs, which seek to replicate the returns of benchmark indices or multiples thereof.
In Canada, the vast majority of ETF assets typically track an index. However, the recent growth of Horizons ETFs' actively managed funds suggests to us that investors see the value of incorporating both actively managed and passively managed investment strategies within their portfolios.
"Investors are recognizing that ETFs have evolved beyond their initial roots of passively following the market, and can now be actively managed, while retaining their low-cost and flexible structure," said Howard Atkinson, President of Horizons ETFs. "We strive to create ETFs based on the needs of investors and after carefully studying the active management space, we decided that actively managed ETFs could be an ideal solution for income-focused investors looking for portfolio manager expertise in a low-cost and flexible product."
Currently, Active ETFs make up approximately half of Horizons ETFs' $4 billion in AUM and of these assets, more than half are based on income-focused mandates. Actively managed strategies can potentially take advantage of market inefficiencies for income asset classes, unlike passive indexing strategies, and generate better returns.
"As a provider of both index-tracking and actively managed ETF solutions, we believe there is a place for both in investor portfolios," said Mr. Atkinson. "We believe there are certain asset classes where an active approach could provide benefits over an indexing strategy, particularly in Canadian income-focused asset classes like corporate bonds and preferred shares, where indexing can be difficult to execute due to liquidity constraints and valuation issues for some index constituents."
Recently, Horizons ETFs' innovation in the active ETF space was recognized by Morningstar Canada at the 2013 Morningstar Awards, where it received the award for Best Fixed Income ETF for its Horizons Active Floating Rate Bond ETF (HFR:TSX). In addition, the Horizons Active Corporate Bond ETF (HAB:TSX) currently has a five-star rating from Morningstar Canada and received a FundGrade® A+ award from Fundata Canada Inc. in January 2014.
Horizons ETFs believes that a combination of low management fees and portfolio management expertise can result in attractive long-term performance for Canadian investors.
"We have the longest track record of running actively managed ETFs in Canada and it's gratifying to see that many of the ETFs we launched three (or more) years ago have established attractive multi-year track records, which have resulted in industry accolades such as Morningstar Canada and FundGrade® awards," said Mr. Atkinson. "The vast majority of more than $1 trillion invested in mutual funds in Canada are with actively managed mutual funds; we believe that, as active ETFs develop track records of success, they will be viewed by a growing number of investors as a viable low-cost alternative to mutual funds."
The AlphaPro family of Active ETFs also includes a suite of innovative alternative strategy ETFs that give retail investors access to the managed futures asset class, as well as hedge fund-type exposure, which offer potential diversification and performance benefits for an investor's portfolio.
The Horizons Morningstar Hedge Fund Index ETF (HHF:TSX) has been recognized internationally for its innovate features, such as giving investors access to diverse hedge fund-type exposure for their portfolios through an index strategy. It won the prestigious William F. Sharpe Indexing Achievement Award for Best ETF Innovation in December 2012.
"When we launched AlphaPro roughly five years ago, I don't think anyone could have conceived how far ETF innovation would come; today investors are not only embracing actively managed strategies, but through low-cost ETFs, can now gain hedge fund-type exposure, which historically has only been available to institutions and high-net-worth individuals," said Mr. Atkinson. "We continue to demonstrate that ETFs have an untapped potential to transform the investment landscape and offer investors, of all levels, the tools they need to build better portfolios in a lower-cost and diversified manner."
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 $4.1 billion in assets under management and 69 ETFs listed on the Toronto Stock Exchange (as at March 31, 2014), 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 Financial Group.
Note to Editors: All figures in Canadian dollars.
Commissions, trailing commissions, management fees and expenses all may be associated with an investment in exchange traded products managed by AlphaPro Management Inc. (the "Horizons Exchanged Traded Products"). The Horizons Exchange Traded Products are not guaranteed, their values change frequently and past performance may not be repeated. Certain Horizons Exchange Traded Products may have exposure to leveraged investment techniques that magnify gains and losses and which may result in greater volatility in value and could be subject to aggressive investment risk and price volatility risk. The prospectus contains important detailed information about each Horizons Exchange Traded Product. Please read the applicable prospectus before investing.
SOURCE: Horizons ETFs Management (Canada) Inc.
For further information: Howard Atkinson, President, Horizons ETFs Management (Canada) Inc., (416) 777-5167, email@example.com