Horizons ETFs Reduces Management Fees on Certain ETFs
Apr 03, 2017, 16:03 ET
TORONTO, April 3, 2017 /CNW/ - Horizons ETFs Management (Canada) Inc. ("Horizons ETFs") is pleased to announce that it has reduced the management fee on the Horizons S&P/TSX Capped Energy Index ETF ("HXE") and the Horizons S&P/TSX Capped Financials Index ETF ("HXF") to 0.25% from 0.35% for each ETF, effective April 1, 2017.
HXE seeks to replicate, to the extent possible, the performance of the S&P/TSX Capped Energy Index (Total Return), net of expenses. The S&P/TSX Capped Energy Index (Total Return) is designed to measure the performance of Canadian energy sector equity securities included in the S&P/TSX Composite Index. The relative weight of any single index constituent security is capped.
HXF seeks to replicate, to the extent possible, the performance of the S&P/TSX Capped Financials Index (Total Return), net of expenses. The S&P/TSX Capped Financials Index is designed to measure the performance of Canadian financial sector equity securities included in the S&P/TSX Composite Index. The relative weight of any single index constituent security is capped.
"HXE and HXF were already the lowest-cost ETFs in Canada offering exposure to the S&P/TSX Capped Energy Index and S&P/TSX Capped Financials Index, respectively. Now with management fees of only 25 basis points, these two ETFs are less than half the cost of the leading competitor ETFs that track these same or similar indices," said Steve Hawkins, Co-CEO and President of Horizons ETFs. "Typically, a passive index ETF will not generate a return that is higher than the index it replicates, so the lower the fee to get that index exposure, the better the performance should be versus a higher fee ETF that tracks the same index."
Not only do HXE and HXF have a fee-advantage versus competitor ETFs, they also have significant after-tax advantages due to their unique total return structure. HXE and HXF use Horizons ETFs' innovative total return index ("TRI") structure to provide tax-efficient exposure to the total returns of their respective indices.
TRI ETFs are low-cost, index-replicating ETFs that use a synthetic replication structure to receive the pre-tax total return of an index. Unlike physically-replicated ETFs, no distributions are expected to be paid by the ETF. Instead, the value of any dividend or interest income is directly reflected in the performance of the ETF. This leads to greater tax efficiency for investors who hold the ETF in non-registered investment accounts. In addition, the potential for tracking error is also reduced in TRI ETFs since there are no portfolio trading costs.
"We think the combination of industry-low fees and significant after-tax advantages, make HXE and HXF very compelling ETFs to use for passive index exposure to energy and financial stocks, the two largest sectors in Canada," said Mr. Hawkins.
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. Horizons ETFs has more than $7 billion of assets under management. With 76 ETFs listed on the Toronto Stock Exchange, 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.
Commissions, management fees and applicable sales taxes all may be associated with an investment in the exchange traded funds managed by Horizons ETFs Management (Canada) Inc. (the "ETFs"). The ETFs are not guaranteed, their values change frequently and past performance may not be repeated. The prospectus contains important detailed information about the ETFs. 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.
SOURCE Horizons ETFs Management (Canada) Inc.
For further information: Mark Noble, Head of Sales Strategy, Horizons ETFs Management (Canada) Inc., (416) 640-8254, [email protected]
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