TORONTO, Nov. 6, 2014 /CNW/ - Horizons ETFs Management (Canada) Inc. ("Horizons ETFs") is proud to announce that the Horizons S&P 500® Index ETF ("HXS") and the Horizons NYMEX® Crude Oil ETF ("HUC") won, respectively, the Best U.S. Equity ETF and the Best Commodity ETF at the 2014 Lipper Fund Awards ("Lipper Awards").
"Horizons ETFs is very honoured to have won two of the Lipper ETF awards — globally, the Lipper Awards are among the most prestigious awards that an investment fund can receive," said Howard Atkinson, President of Horizons ETFs and chair of the Canadian ETF Association. "Canada is the first country in the world to have its ETFs recognized by the Lipper Awards. This is a strong testament to the fact that ETFs are a vital part of the Canadian investment landscape."
Lipper ETF awards use similar evaluation criteria as their mutual fund counterparts, and are calculated based on a comparison with other ETFs in the same Canadian Investment Funds Standards Committee (CIFSC) category. The 2014 Lipper ETF Awards are given to the ETF with the best three-year performance as evaluated over the period ending July 31, 2014.
HXS was awarded the 2014 Lipper Fund Award in the U.S. Equity category for the three-year period ending July 31, 2014, ranking first out of the 8 ETFs eligible for consideration in its category. HXS seeks to replicate, to the extent possible, the performance of the S&P 500® (Total Return), net of expenses. HXS uses a total return swap based structure, which means the ETF does not physically hold the underlying stocks of the S&P 500®; this can reduce tracking error and can also minimize taxable distributions. Since its inception in 2010, HXS has not paid any taxable distributions.
Performance for HXS for the period ended September 30, 2014 was as follows: 29.54% (1 year), 26.55% (3 years) and 19.21% (since inception, November 30, 2010). The corresponding Lipper Leader ratings of the ETF for the same period are as follows: N/A (1 year), 5 (3 years).
"I think it's very telling that an index ETF won this award and illustrates how difficult it is to outperform the S&P 500® as an equity investor," said Mr. Atkinson. "There are at least seven ETFs in Canada that offer single-long exposure to the S&P 500®, but we believe that it's the combination of HXS' low management fee, reduced potential for tracking error and greater tax efficiency that have produced outstanding exposure to the index and have garnered HXS a five star rating from Morningstar1."
1 As at October 31, 2014
HUC was named Best Commodity ETF, as the top performing Commodity ETF amongst 8 eligible ETFs in its category for the three-year period ending July 31, 2014. HUC seeks investment results, before fees, expenses, brokerage commissions and other transaction costs, that endeavour to correspond to the performance of the NYMEX® light sweet crude oil futures contract for the next December delivery month.
Performance for HUC for the period ended September 30, 2014 was as follows: 2.05% (1 year), 5.36% (3 years), 2.30% (5 years) and 1.99% (since inception, June 25, 2009). The corresponding Lipper Leader ratings of the ETF for the same period are as follows: N/A (1 year), 5 (3 years), 5 (5 years).
Investors can't physically invest in crude oil, so in order for an ETF to get exposure to crude oil, it typically has to invest in rolling futures contracts which expire every month. Crude oil ETFs often have to pay a premium to roll into the next month's contract, and that premium accounts for factors such as storage costs and future pricing expectations of oil prices. Over time, these costs can erode the long-term performance of oil investing.
"HUC was designed to optimize its exposure to oil through longer-dated futures contracts, so that the contracts rollover less frequently. This structure has reduced costs to HUC, which we believe has helped the long-term performance of the ETF, versus other commodity futures-based funds," said Mr. Atkinson.
Both HXS and HUC are index strategies. Horizons ETFs offers a range of ETF solutions, both index-based and actively managed, for investors to achieve their goals.
"Regardless of whether a strategy is active or passive, our goal is to build ETFs that offer investors new and innovative solutions to asset classes," said Mr. Atkinson. "Having won these awards with two index strategies illustrates the idea that even in the passive ETF space, there is always room for more efficient and creative solutions – which both HXS and HUC demonstrate."
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 $4.7 billion of assets under management and with 72 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 Financial Group.
Commissions, trailing commissions, management fees and expenses all may be associated with an investment in exchange traded products managed by AlphaPro Management Inc. and Horizons ETFs Management (Canada) Inc. (the "Horizons Exchange Traded Products"). The Horizons Exchange Traded Products are not guaranteed, their values change frequently and past performance may not be repeated. Please read the relevant 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.
©2014. Morningstar Research Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The FundGrade rating is used with permission from FundGrade Canada Inc., all rights reserved.
The Lipper Fund Awards are part of the Thomson Reuters Awards for Excellence, a global family of awards that celebrate exceptional performance throughout the professional investment community. The Thomson Reuters Awards for Excellence recognize the world's top investment funds, fund management firms, sell-side firms, research analysts, and investor relations teams. The Thomson Reuters Awards for Excellence also include the Extel Survey Awards and the StarMine Analyst Awards. For more information, please contact [email protected] or visit excellence.thomsonreuters.com.
The Lipper Fund Awards, granted annually, are part of the Thomson Reuters Awards for Excellence awarded by Lipper, Inc. and highlight investment funds that have excelled in delivering consistently strong risk-adjusted performance relative to their peers. The Lipper Fund Awards are based on the Lipper Ratings for Consistent Return, which is a risk-adjusted performance measure calculated over 36, 60 and 120 month periods. The highest 20% of investment funds in each category are named Lipper Leaders for Consistent Return and receive a score of 5, the next 20% receive a score of 4, the middle 20% are scored 3, the next 20% are scored 2 and the lowest 20% are scored 1. The highest Lipper Leader for Consistent Return in each category wins the Lipper Fund Award. Lipper Leader ratings change monthly. For more information, see www.lipperweb.com. Although Lipper makes reasonable efforts to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Lipper.
SOURCE: Horizons ETFs Management (Canada) Inc.
For further information: Howard Atkinson, President, Horizons ETFs Management (Canada) Inc., (416) 777-5167, [email protected]