TORONTO, Oct. 31, 2013 /CNW/ - Horizons ETFs Management (Canada) Inc. ("Horizons ETFs") and its affiliate AlphaPro Management Inc. (the "Manager") announced today that certain changes will take place in respect of the following exchange traded funds ("ETFs"):
|Name of ETF||TSX Ticker Symbol|
|Class E Units|| Advisor Class
|Horizons Gold Yield ETF ("Horizons HGY")||HGY||HGY.A|
|Horizons Natural Gas Yield ETF ("Horizons HNY")||HNY||HNY.A|
Changes to the ETFs
Proposed Amendments to Income Tax Act (Canada)
As a result of the proposed amendments to the Income Tax Act (Canada) announced by the Minister of Finance in the federal government's budget on March 21, 2013 (the "Proposed Amendments") the Manager has determined that the ETFs' forward agreements are no longer providing material operational efficiency to unitholders of the ETFs. Specifically, the expiry or termination of the forward agreement to which an ETF is a party, and any increase to the number of Units of an ETF outstanding, are each expected to affect the ability of an ETF to efficiently execute the current investment strategy of the ETFs. Any new subscriptions for Units of an ETF will not increase the size of the applicable forward agreement.
As a result of the Manager's determination that the forward agreements are no longer providing material operational efficiency to unitholders of the ETFs, each ETF intends to acquire, in the market, the same, or substantially the same, assets as those held by the applicable underlying fund (to which an ETF is exposed through its forward agreement) at the time of the expiry or termination of the current forward agreement (the "Proposed Transactions" and each a "Proposed Transaction"). Once a Proposed Transaction is completed in respect of an ETF, the ETF's underlying fund will be terminated in due course.
Changes to Investment Strategy of the ETFs
When the Proposed Transaction described above occurs in respect of an ETF, the applicable forward agreement will be terminated and the ETF will acquire, in the market, the same, or substantially the same, assets as those held by the applicable underlying fund at the time of the expiration or termination of the applicable forward agreement. Each ETF will then directly employ the covered call option writing strategy currently employed by its underlying fund.
The Manager anticipates that the Proposed Transactions and the changes to the ETFs' investment strategy will, all else being equal, have no material impact on the performance of the ETFs.
Changes to Fee Structure of the ETFs
The fee structure of the ETFs will also change. On and after December 1, 2013, each ETF will pay annual management fees (the "Management Fees"), calculated and accrued daily and payable monthly in arrears, to the Manager equal to: (a) an annual percentage of the net asset value of the Class E Units; and (b) an annual percentage of the net asset value of the Advisor Class Units, in each case together with applicable Sales Tax. The Management Fees of the ETFs will be follows:
| Class E units
0.60% of the net asset value of Horizons HGY's Class E units
| Advisor Class units
1.35% of the net asset value of Horizons HGY's Advisor Class units
| Class E units
0.85% of the net asset value of Horizons HNY's Class E units
| Advisor Class Unit
1.60% of the net asset value of Horizons HNY's Advisor Class units
The aggregate management fees paid by unitholders in respect of an ETF will not change as a result of these changes to the fee structure.
Commissions, trailing commissions, management fees and expenses all may be associated with an investment in exchange traded funds. Exchange traded funds are not guaranteed, their values change frequently and past performance may not be repeated. The prospectus contains important detailed information. Please read the prospectus before investing.
Certain statements contained in this news release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as "may," "will," "should," "expect," "anticipate," "believe," "intend" or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Horizons ETFs undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.
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 $4.4 billion in assets under management and 73 ETFs listed on the TSX, 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 Global Investments Group.
SOURCE: Horizons Exchange Traded Funds Inc.
For further information:
Howard Atkinson, President, Horizons ETFs Management (Canada) Inc.
(416) 777-5167 or [email protected]