TORONTO, Sept. 17, 2013 /CNW/ - Horizons ETFs Management (Canada) Inc. ("Horizons ETFs") is pleased to announce the launch of two new exchange traded funds ("ETFs") that will provide investors with the lowest-cost ETF exposure to the financials and energy sectors of the Canadian stock market.
The Horizons S&P/TSX Capped Financials Index ETF ("HXF") and the Horizons S&P/TSX Capped Energy Index ETF ("HXE") will begin trading on the Toronto Stock Exchange ("TSX") today under the following ticker symbols:
|ETF Name||Ticker Symbol|| Annual
|Horizons S&P/TSX Capped Financials Index ETF||HXF||0.35%|
|Horizons S&P/TSX Capped Energy Index ETF||HXE||0.35%|
* plus applicable sales taxes
HXF seeks to replicate, to the extent possible, the performance of the S&P/TSX Capped Financials Index (Total Return), net of fees and expenses. Financial companies represent one of the largest sectors of the Canadian economy, accounting for nearly one-third of the market capitalization of the S&P/TSX Composite Index.
HXE seeks to replicate, to the extent possible, the performance of the S&P/TSX Capped Energy Index (Total Return), net of fees and expenses. Energy companies represent one of the largest sectors of the Canadian economy, accounting for about one-quarter of the market capitalization of the S&P/TSX Composite Index.
Both HXF and HXE have a management fee almost 40% less expensive than the next lowest-cost ETF tracking the same index.
"Whenever we add to our line of index-tracking ETFs, costs are always at the top of our mind. Investors should pay as little as possible for index returns. Other issuers have similar ETFs, but we wanted to bring to market products with lower costs, reduced potential for tracking error and more tax efficiency," said Howard Atkinson, President of Horizons ETFs. "We accomplished that with the Horizons S&P/TSX 60TM and S&P 500® ETFs, and investors were urging us to do the same with two of Canada's most important sector indices."
Both HXF and HXE use the same innovative total return swap structure as the Horizons S&P/TSX 60™ Index ETF (HXT) and the Horizons S&P 500® Index ETF (HXS). This structure allows for lower management fees and greater tax efficiency. Since the value of any dividend distributions paid out by index constituents is reflected in the total return of the index and therefore an ETF's net asset value (NAV), these ETFs do not make taxable distributions of those dividends. The only tax implications for an individual investor in HXF or HXE will generally occur when that investor sells their units on an exchange for a capital gain (or loss).
"The S&P/TSX Capped Financials Index is a particularly dividend-rich index, delivering an average annual dividend yield of 4% over the last five calendar years," Mr. Atkinson notes. "Some Canadian investors could see more than a quarter of those distributions going to taxes. The HXE and HXF structure essentially defers this dividend tax liability, so that individual investors only pay taxes when they sell their ETF units on an exchange for a capital gain."
HORIZONS ETFs EXTENDS FEE REBATE ON HXT
To mark the three-year anniversary of the Horizons S&P/TSX 60™ Index ETF ("HXT"), Horizons ETFs is proud to announce the extension of HXT's fee rebate for another year.
Launched in September 2010, HXT seeks to replicate the performance of the S&P/TSX 60™ Index (Total Return), net of fees and expenses. The S&P/TSX 60™ Index is comprised of the 60 largest Canadian stocks and represents more than 70% of the market capitalization of the Canadian stock market.
The fee rebate of 2 basis points (or 0.02%) will remain in effect for another 12 months, continuing the annual management fee investors pay on HXT at 5 basis points (or 0.05%) plus applicable sales taxes until at least September 30, 2014.
At half the cost of other ETFs tracking the S&P/TSX 60™ Index, HXT is the lowest-cost ETF listed in Canada and the lowest-cost Canadian stock index ETF in the world.
To help reduce trading cost for investors on a per-unit basis, HXT recently consolidated its units 1 : 2 after the close on September 6, 2013.
"Since we announced the fee rebate in September 2012, we've seen more than $600 million of net inflows into HXT, primarily from institutional investors, making HXT one of the fastest growing ETFs in Canada," Mr. Atkinson said. "With this fee rebate extension, recent unit consolidation and a fantastic three-year track record - an important milestone for institutional investors - we expect even more investor interest in HXT over the next year."
HXF and HXE have closed the offering of their initial units and will begin trading on the TSX when the market opens this morning.
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 is an innovative financial services company 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 72 ETFs listed on the TSX, the Horizons ETFs family makes up one of the largest families of ETFs in Canada. Horizons ETFs is a member of the Mirae Asset Financial Group.
SOURCE: Horizons ETFs Management (Canada) Inc.
For further information:
Howard Atkinson, President
Horizons ETFs Management (Canada) Inc.
(416) 777-5167 or [email protected]