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An ETF for every investor.

HBNK

Horizons Equal Weight Banks Index ETF

Price
$21.09
$0.07
0.33%
NAV
$21.0158
$-0.2306
-1.09%

Benchmark

Sector Equity

Fact Sheet
Learn more about HBNK

SPAY

Horizons Short-Term U.S. Treasury Premium Yield ETF

Price
$27.32
$0.01
0.04%
NAV
$27.3002
$0.0401
0.15%

Active

Fixed Income

Fact Sheet
Learn more about SPAY

CASH

Horizons High Interest Savings ETF

Price
$50.11
$0.01
0.01%
NAV
$50.1003
$0.0066
0.01%

Benchmark

Fixed Income

Fact Sheet
Learn more about CASH
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Equity Essentials: 5 Ways to Own The Big Six Banks

Looking To Get More From Your Core?

Canada’s Big Six Banks – Toronto-Dominion Bank (TD), Royal Bank of Canada (RBC), Bank of Montreal (BMO), Bank of Nova Scotia (BNS), Canadian Imperial Bank of Commerce (CIBC), and National Bank of Canada (NBC) – have traditionally been a source of stable dividend income for investors in one of the country’s largest sectors. Together, they represent approximately 25% of the total market capitalization of the S&P/TSX 60™ Index.

Their size isn’t the only significant factor in their appeal:

Consistent Dividend Growth: The annualized growth rate of dividends for the big six Canadian banks was 9.58% for the 10-year period from January 31, 2013 to January 31, 2023.*
Historical Outperformance: Since 2013, Canada’s big six banks have historically outperformed the broader S&P/TSX Composite Index.*
Historical Stability: Canada has not had a major bank failure in nearly 100 years.
*Source: Bloomberg, as at May 31, 2023.

Horizons ETFs’ Canadian Banks Equity Essentials Suite

Horizons ETFs’ Canadian Banks Equity Essentials suite offers big and bold ways to help you reach your investing goals.

With ETFs offering Core, Covered Call, Enhanced or Enhanced Covered Call exposure, now you can invest your way in Canadian Banks, whether your focus is on total return, monthly income, or potential higher growth.

Until July 31, 2024, Horizons Equal Weight Banks Index ETF (HBNK) will be available to investors for an effective management fee of 0% and the effective management expense ratio (MER) is expected to be 0.00% for the duration of the HBNK Rebate period. Following the year-long rebate period, ending on July 31, 2024, HBNK will continue to have a low management fee of 0.09%.

ETF Name Ticker Equity Exposure Mgmt. Fee
Core Horizons Equal Weight Canada Banks Index ETF HEWB Tax-Efficient Exposure to Canada’s Big Six Banks 0.25%
Horizons Equal Weight Banks Index ETF HBNK Index Exposure to Canada’s Big Six Banks 0.00%1
Targeting Yield Horizons Equal Weight Canadian Bank Covered Call ETF BKCC Covered Call Exposure to Canada’s Big Six Banks 0.39%2
Targeting Growth Horizons Enhanced Equal Weight Canadian Banks ETF BNKL 1.25 times Index Exposure to Canada’s Big Six Banks 0.35%
Targeting
Yield & Growth
Horizons Enhanced Equal Weight Canadian Bank Covered Call ETF BKCL 1.25 times Covered Call Exposure to Canada’s Big Six Banks 0.65%
Plus applicable Sales Tax
1Annual management fee rebated by 0.09% to an effective management fee and management expense ratio (MER) of 0% until July 31, 2024
2Annual management fee reduced from 0.65% to 0.39%, effective July 6, 2023

Access the Canadian Banks with Five Different Ways to Invest:

Tax-Efficient Index Exposure: Horizons ETFs offers products that can provide exposure to all of the major three Equity Essential benchmarks through our Total Return Index (TRI) family of ETFs, including Canadian bank equities. The TRI ETFs are tax-efficient, index-tracking ETFs that provide exposure to a range of equity and fixed-income benchmarks within a corporate class structure.

TRI ETFs are not expected to make taxable distributions, which can offer distinct advantages if held in taxable or non-registered accounts and mean that an investor is generally only expected to be taxed on any capital appreciation of the ETF if, and when, the shares of their ETF are sold. TRI ETFs can offer a greater after-tax return on investment when held in a non-registered account, compared to a traditional, physically-replicated index ETF.

For investors seeking tax efficiency, consider core index exposure to our Canadian Bank Equity Essentials, through the Horizons Equal Weight Canada Banks Index ETF (HEWB).

 

Index Equity Exposure: The most basic and popular way to invest in Equity Essentials is through a traditional index benchmark ETF. These ETFs provide direct exposure to these benchmarks all at competitively low management fees. Horizons ETFs provides traditional index equity exposure to Canadian Bank Equity Essentials through the Solactive Canada Equal Weight Banks Index.

For investors seeking index equity exposure, through our Canadian Bank Equity Essentials, consider the Horizons Equal Weight Banks Index ETF (HBNK).

 

Lightly Levered “Enhanced” Index Exposure: Horizons ETFs offers ETFs that provide approximately 1.25 times (125%) exposure to underlying indices, including the Solactive Canada Equal Weight Banks Index. These ETFs invest in the underlying equity index ETF and then use a modest amount of leverage to enhance both the return profile and the income generated by the underlying ETF exposure.

For investors targeting growth, consider enhanced index exposure to our Canadian Bank Equity Essentials, through the Horizons Enhanced Equal Weight Banks ETF (BNKL)

 

Covered Call ETFs: Horizons ETFs offers covered call exposure for each Equity Essentials categories, including Canadian Bank equities. These ETFs invest in an equity index strategy that provides exposure to an underlying Equity Essential benchmark. An experienced options strategy team then writes covered calls upto 50% of the underlying equity exposure, at the Manager’s discretion, which can increase the amount of income generated by the strategy. Historically, this income gets paid out monthly. More information on our suite of Covered Call ETFs can be found here: https://horizonsetfs.com/covered-call

For investors targeting  yield, consider covered call exposure to our Canadian Bank Equity Essentials, through the Horizons Equal Weight Canadian Bank Covered Call ETF (BKCC).

 

Lightly Levered “Enhanced” Covered Call Exposure: Each of our Equity Essentials covered call strategies have an enhanced version that provides approximately 1.25 times (125%) exposure to the underlying covered call ETF, including for Canadian bank equities. The use of a modest 1.25 times leverage should potentially increase the return potential of the underlying equity exposure and enhance the monthly distribution potential.

For investors targeting growth and yield, consider enhanced index exposure to our Canadian Bank Equity Essentials, through the Horizons Enhanced Equal Weight Canadian Bank Covered Call ETF (BKCL).

Get Exposure Your Way

Looking for traditional, low-cost exposure or seeking a big and bold way to invest in the Canadian Banks?

Our Canadian Banks Equity Essentials Suite offers investors different ways to invest with varying degrees of exposure, yield, and growth potential

1Annualized distribution yield, as at October 31, 2023. 2Annual management fee reduced from 0.65% to 0.39%, effective July 6, 2023

Spotlight: Light Levered “Enhanced” Exposure

Our Canadian Banks Equity Essentials Suite includes lightly leveraged ETFs that offer “Enhanced” exposure to their underlying holdings (about 125%).

This exposure is achieved by applying light leverage to selected covered call and equity ETFs to magnify exposure to their underlying index or assets, which may enhance returns. This strategy can increase the monthly income generated and also provide more growth potential. While these ETFs can provide higher yields and growth, they also carry a higher risk-return profile.

How does it work?

 

These ETFs can be an effective way to increase potential gains for income-focused, or short-term investment strategies. Horizons ETFs’ Enhanced ETFs will seek to achieve its investment objectives by a leverage ratio of approximately 125% through the use of cash borrowing, or as otherwise permitted under applicable securities legislation. The leverage is not reset daily.

Each dollar of your investment in one of our Enhanced ETFs is invested into the underlying ETF. Then, borrowed 25% of the invested amount is also invested in that ETF by us, resulting in you getting magnified gains (or losses), less the cost of borrowing.

Historical effect of light leverage

As evidenced in the chart depicting the historical return trajectory of the Solactive Equal Weight Canada Banks Index with and without the usage of 1.25x, on a historical basis, employing light leverage would have resulted in a greater total return on the Solactive Equal Weight Canada Banks Index between May 31, 2013 and May 31, 2023.

The use of leverage can be particularly beneficial in favourable market conditions. However, leverage can also magnify negative performance when the benchmark falls.

FOR ILLUSTRATIVE PURPOSES ONLY. THE GROWTH OF $10K CHART FOR THE 1.25X LEVERAGED SOLACTIVE EQUAL WEIGHT CANADA BANKS INDEX IS HYPOTHETICAL

Source: Bloomberg, as at May 31, 2023

 

The Growth of 10K chart is based on the Underlying Index historical annual compounded total return including changes in Underlying Index unit value and reinvestment of all distributions and does not take into account sales, transaction, brokerage, redemption, distribution or optional charges or income taxes payable by any investor or investment fund in replicating the Underlying Index, that would have reduced returns. The Underlying Index is not directly investible. Underlying Index returns are not guaranteed, their values change frequently and past performance may not be repeated.

Learn more about The Three Major Equity Essentials Suites below:

 

Large-Cap Canadian Equity

Canada’s largest and most liquid companies typically trade on the Toronto Stock Exchange, with many offering some level of income through dividend yield. Many of these “blue chip” companies are included within the S&P/TSX 60™ Index, which is designed to measure the large-cap segment of the Canadian market.

Click here to learn more.

Large-Cap U.S. Equity

The U.S. equity market represents more than 40% of the global equity market, with large-cap U.S equities representing approximately 70% of the total U.S. market. Many of these “blue chip” companies are included within the S&P 500™ Index, a major stock index designed to measure the large-cap segment of the U.S. market.

Click here to learn more.

Disclaimer


Commissions, management fees and expenses all may be associated with an investment in exchange traded products managed by Horizons ETFs Management (Canada) Inc. (the “Horizons Exchange Traded Products”). The Horizons Exchange Traded Products are not guaranteed, their value changes frequently and past performance may not be repeated. Certain Horizons Exchange Traded Products may have exposure to leveraged investment techniques that magnify gains and losses and which may result in greater volatility in value and could be subject to aggressive investment risk and price volatility risk. Such risks are described in the prospectus. The prospectus contains important detailed information about the Horizons Exchange Traded Products. Please read the relevant prospectus before investing.

Annualized Distribution Yield is the most recent regular distribution (excluding additional year-end distributions) annualized for frequency, divided by Net Asset Value (NAV) as at October 31, 2023.

The payment of distributions, if any, is not guaranteed and may fluctuate at any time. The payment of distributions should not be confused with an Exchange Traded Fund’s (“ETF”) performance, rate of return, or yield. If distributions paid by the ETF are greater than the performance of the ETF, distributions paid may include a return of capital and an investor’s original investment will decrease.  A return of capital is not taxable to the investor, but will generally reduce the adjusted cost base of the securities held for tax purposes. Distributions are paid as a result of capital gains realized by an ETF, and income and dividends earned by an ETF are taxable to the investor in the year they are paid. The investor’s adjusted cost base will be reduced by the amount of any returns of capital. If the investor’s adjusted cost base goes below zero, investors will realize capital gains equal to the amount below zero. Future distribution dates may be amended at any time. To recognize that these distributions have been allocated to investors for tax purposes the amounts of these distributions should be added to the adjusted cost base of the units held. The characterization of distributions, if any, for tax purposes, (such as dividends/other income/capital gains, etc.) will not be known for certain until after the ETF’s tax year-end. Therefore, investors will be informed of the tax characterization after year-end and not with each distribution if any. For tax purposes, these amounts will be reported annually by brokers on official tax statements.  Please refer to the applicable ETF distribution policy in the prospectus for more information.

Horizons Total Return Index ETFs (“Horizons TRI ETFs”) are generally index-tracking ETFs that use an innovative investment structure known as a Total Return Swap to deliver index returns in a low-cost and tax-efficient manner. Unlike a physical replication ETF that typically purchases the securities found in the relevant index in the same proportions as the index, most Horizons TRI ETFs use a synthetic structure that never buys the securities of an index directly. Instead, the ETF receives the total return of the index through entering into a Total Return Swap agreement with one or more counterparties, typically large financial institutions, which will provide the ETF with the total return of the index in exchange for the interest earned on the cash held by the ETF. Any distributions which are paid by the index constituents are reflected automatically in the net asset value (NAV) of the ETF. As a result, the Horizons TRI ETF receives the total return of the index (before fees), which is reflected in the ETF’s share price, and investors are not expected to receive any taxable distributions. Certain Horizons TRI ETFs (Horizons Nasdaq-100 ® Index ETF and Horizons US Large Cap Index ETF) use physical replication instead of a total return swap.

BNKL and BKCL (or the “Enhanced ETFs”) are alternative mutual funds within the meaning of NI 81-102, and are permitted to use strategies generally prohibited by conventional mutual funds, such as the ability to invest more than 10% of the Enhanced ETF’s net asset value in securities of a single issuer, the ability to borrow cash and to employ leverage. While these strategies will only be used in accordance with the applicable investment objectives and strategies of the Enhanced ETFs, during certain market conditions they may accelerate the risk that an investment in Units of such Enhanced ETF decreases in value.

The financial instrument is not sponsored, promoted, sold or supported in any other manner by Solactive AG nor does Solactive AG offer any express or implicit guarantee or assurance either with regard to the results of using the Index and/or Index trade name or the Index Price at any time or in any other respect. The Index is calculated and published by Solactive AG. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards the Issuer, Solactive AG has no obligation to point out errors in the Index to third parties including but not limited to investors and/or financial intermediaries of the financial instrument. Neither publication of the Index by Solactive AG nor the licensing of the Index or Index trade name for the purpose of use in connection with the financial instrument constitutes a recommendation by Solactive AG to invest capital in said financial instrument nor does it in any way represent an assurance or opinion of Solactive AG with regard to any investment in this financial instrument. Certain statements may constitute a forward-looking statement, including those identified by the expression “expect” and similar expressions (including grammatical variations thereof).

Certain statements may constitute a forward-looking statement, including those identified by the expression “expect” and similar expressions (including grammatical variations thereof). The forward-looking statements are not historical facts but reflect the author’s current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking statements. These forward-looking statements are made as of the date hereof and the authors do not undertake to update any forward-looking statement that is contained herein, whether as a result of new information, future events or otherwise, unless required by applicable law.

This communication is intended for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to purchase exchange traded products (the “Horizons Exchange Traded Products”) managed by Horizons ETFs Management (Canada) Inc. and is not, and should not be construed as, investment, tax, legal or accounting advice, and should not be relied upon in that regard. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. Investors should consult their professional advisors prior to implementing any changes to their investment strategies. These investments may not be suitable to the circumstances of an investor.

All comments, opinions and views expressed are generally based on information available as of the date of publication and should not be considered as advice to purchase or to sell mentioned securities. Before making any investment decision, please consult your investment advisor or advisors.