HORIZONS ETFs COMPLETES UPDATE OF COVERED CALL ETF SUITE
Change includes the introduction of Canada's First NASDAQ-100 Covered Call ETF
TORONTO, June 27, 2022 /CNW/ - Horizons ETFs Management (Canada) Inc. ("Horizons ETFs") announced today that it has substantially completed its updates (the "Updates") for six exchange-traded funds within its covered call ETF suite (the "ETFs"), following approvals by unitholders of the ETFs at special meetings held on June 21, 2022. Updates of the investment objectives were effective on June 24, 2022 with the new names and tickers of the ETFs effective at the open of trading on June 27, 2022.
The ETFs are part of Horizons ETFs' Covered Call family – a suite of ETFs that provide exposure to a variety of sectors and indices, and employ a dynamic covered call option writing program to generate additional income on the portfolio.
"With these updates to our covered call suite, we expect these ETFs to offer investors strategies well equipped to provide additional income to these various exposures throughout all market conditions," said Steve Hawkins, President, and CEO of Horizons ETFs. "The updates, directed by our options strategist team, led by portfolio managers Nick Piquard and Hans Albrecht, has resulted in ETFs that can potentially generate meaningful yield for investors while providing exposure to a number of in-demand indices and sectors."
The Updates were completed following a proposal made by the Manager, published in a circular made available to all unitholders, and announced by a press release dated May 17, 2022, both available at www.sedar.com and www.HorizonsETFs.com. An update to the circular in respect of Horizons Enhanced Income Gold Producers ETF was announced by press release on June 2, 2022, and was subsequently filed on www.sedar.com.
The changes are further described below:
Previous Name and Ticker |
New Name and Ticker |
New Investment Objectives |
Horizons Enhanced Income Equity ETF ("HEX") |
Horizons Canadian Large Cap Equity Covered Call ETF ("CNCC") |
CNCC seeks to provide: (a) exposure to the performance of the large-cap segment of the Canadian equity market; and (b) monthly distributions of dividend and call option income. To mitigate downside risk and generate income, CNCC will employ a dynamic covered call option writing program. |
Horizons Enhanced Income Energy ETF ("HEE") |
Horizons Canadian Oil and Gas Equity Covered Call ETF ("ENCC") |
ENCC seeks to provide, to the extent possible and net of expenses: (a) exposure to the performance of an index of Canadian companies that are involved in the crude oil and natural gas industry (currently, the Solactive Equal Weight Canada Oil & Gas Index); and (b) monthly distributions of dividend and call option income. To mitigate downside risk and generate income, ENCC will employ a dynamic covered call option writing program. |
Horizons Enhanced Income Financials ETF ("HEF") |
Horizons Equal Weight Canadian Bank Covered Call ETF |
BKCC seeks to provide, to the extent possible and net of expenses: (a) exposure to the performance of an index of equal-weighted equity securities of diversified Canadian banks (currently, the Solactive Equal Weight Canada Banks Index); and (b) monthly distributions of dividend and call option income. To mitigate downside risk and generate income, BKCC will employ a dynamic covered call option writing program. |
Horizons Enhanced Income US Equity (USD) ETF ("HEA.U")* |
Horizons US Large Cap Equity Covered Call ETF |
USCC.U seeks to provide: (a) exposure to the performance of the large-cap market segment of the U.S. equity market and (b) monthly U.S. dollar distributions of dividend and call option income. To mitigate downside risk and generate income, USCC.U will employ a dynamic covered call option writing program. USCC.U will not seek to hedge its exposure to the U.S. dollar back to the Canadian dollar. |
Horizons Enhanced Income International Equity ETF ("HEJ") |
Horizons NASDAQ-100 Covered Call ETF |
QQCC seeks to provide, to the extent possible and net of expenses: (a) exposure to the performance of an index of the largest domestic and international nonfinancial companies listed on the NASDAQ stock market (currently, the NASDAQ-100® Index); and (b) monthly U.S. dollar distributions of dividend and call option income. To mitigate downside risk and generate income, QQCC will employ a dynamic covered call option writing program. QQCC will not seek to hedge its exposure to the U.S. dollar back to the Canadian dollar. |
Horizons Enhanced Income Gold Producers ETF ("HEP") |
Horizons Gold Producer Equity Covered Call ETF |
GLCC seeks to provide, to the extent possible and net of expenses: (a) exposure to the performance of an index of equity securities of diversified North American listed gold producers (currently, the Solactive North American Listed Gold Producers Index) and (b) monthly distributions of dividend and call option income. To mitigate downside risk and generate income, GLCC will employ a dynamic covered call option writing program. |
*The Canadian dollar version, "HEA", will change to "USCC".
QQCC will be the first NASDAQ-100 Covered Call ETF listed in the Canadian market. The ETF allows Canadian investors to generate a monthly income from a portfolio that provides exposure to the NASDAQ-100® Index.
"The recent market volatility and rising interest rates have disproportionately impacted the NASDAQ-100, compared to other large-cap North American stock indices. This volatility has also resulted in potentially higher call premiums that can produce attractive yields for investors," said Mr. Hawkins. "QQCC effectively allows investors to invest in the NASDAQ and earn a potentially high level of monthly income, which is something this index has not historically provided. It can potentially be a powerful way for income investors to generate additional income in their equity portfolio."
Mr. Hawkins added that across the board, these new covered call mandates will allow investors to diversify their sources of income beyond traditional fixed income, and potentially generate higher yields from their equity investments.
"More than ever before, investors are looking for opportunities to add additional income to their portfolios; particularly as they seek to outpace inflation and equity market volatility," said Mr. Hawkins. "I am confident that these updates to our covered call suite will offer investors a strong opportunity to create the income conditions needed for today's marketplace."
There are no changes to the management fees of the ETFs. Further details regarding the changes can be found at www.sedar.com and www.HorizonsETFs.com.
Horizons ETFs Management (Canada) Inc. is an innovative financial services company and offers one of the largest suites of exchange traded funds in Canada. The Horizons ETFs product family includes a broadly diversified range of solutions for investors of all experience levels to meet their investment objectives in a variety of market conditions. Horizons ETFs has over $22 billion of assets under management and 104 ETFs listed on major Canadian stock exchanges.
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SOURCE Horizons ETFs Management (Canada) Inc.
Please contact Horizons ETFs at 1-866-641-5739 (toll-free) or (416) 933-5745, [email protected]
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