GET MORE FROM YOUR CORE with HORIZONS ENHANCED ETFS
Three equity categories account for more than $120 billion or approximately 1/3 of all ETF assets under management in Canada (Morningstar as at May 31, 2023):
We consider these three as the “Equity Essentials”, the most important equity categories for Canadians.
At Horizons ETFs, we have built a product suite that provides a variety of ways to get Equity Essentials exposure. We believe this suite represents some of the most cost-effective, diverse and impactful approaches to accessing different types of exposure in these important equity categories.
Whether you’re an investor looking for low-cost index exposure, or seeking higher levels of monthly income, our ETFs could help you meet your goals:
1 Annualized Distribution Yield as at October 31, 2023. 2 Annual management fee reduced from 0.65% to 0.39%, effective July 6, 2023.
| HEWB | Horizons Equal Weight Canada Banks Index ETF | BNKL | Horizons Enhanced Equal Weight Banks Index ETF |
| HXT | Horizons S&P/TSX 60™ Index ETF | CANL | Horizons Enhanced S&P/TSX 60 Index ETF |
| HXS.U | Horizons S&P 500® Index ETF | BKCL | Horizons Enhanced Equal Weight Canadian Banks Covered Call ETF |
| HULC.U | Horizons US Large Cap Index ETF | CNCL | Horizons Enhanced Canadian Large Cap Equity Covered Call ETF |
| HBNK | Horizons Equal Weight Banks Index ETF | USCL | Horizons Enhanced US Large Cap Equity Covered Call ETF |
| BKCC | Horizons Equal Weight Canadian Bank Covered Call ETF | ||
| CNCC | Horizons Canadian Large Cap Equity Covered Call ETF | ||
| USCC | Horizons US Large Cap Equity Covered Call ETF |
Get More Sector Opportunity
With exposure to the NASDAQ stock market (the NASDAQ-100® Index) and the Canadian crude oil and natural gas industry (the Solactive Equal Weight Canada Oil & Gas Index). The ETF offerings outlined below provide varying potential for yield generation and growth, while also offering different risk-return profiles.
1 Annualized Distribution Yield as at October 31, 2023.
| HXQ | Horizons NASDAQ-100® Index ETF | ENCC | Horizons Canadian Oil And Gas Equity Covered Call ETF |
| HXE | Horizons S&P/TSX Capped Energy Index ETF | ENCL | Horizons Enhanced Canadian Oil And Gas Equity Covered Call ETF |
| QQCC | Horizons NASDAQ-100 Covered Call ETF | QQCL | Horizons Enhanced NASDAQ-100 Covered Call ETF |
Cost Effective Access to a Broad Range of Exposure
The new Horizons Equal Weight Banks Index ETF (HBNK) is the lowest-cost Canadian Bank ETF on the market.
It’s annual management fee is rebated by 0.09% to an effective management fee and management expense ratio (MER) of 0% until July 31, 2024. Following the year-long rebate period, ending on July 31, 2024, the ETF will continue to have a low management fee of 0.09%.
| Ticker | Name | Target Exposure | Management Fee1 |
|---|---|---|---|
| HBNK | Horizons Equal Weight Banks Index ETF | Solactive Equal Weights Canadian Banks Index | 0.09%, rebated to 0% until July 31, 2024 |
1Plus applicable sales tax.
Additionally, we have reduced the management fee of the three Covered Call ETFs that are part of our Equities Essentials suite:
| Ticker | Name | Target Exposure | Yield | Management Fee |
|---|---|---|---|---|
| BKCC | Horizons Equal Weight Canadian Bank Covered Call ETF | Covered Call Exposure to the Solactive Equal Weight Canada Banks Index | 14.16%1 | 0.39%2 |
| CNCC | Horizons Canadian Large Cap Equity Covered Call ETF | Covered Call Exposure to Canadian Large-Cap Equities | 10.80%1 | 0.39%2 |
| USCC.U | Horizons US Large Cap Equity Covered Call ETF | Covered Call Exposure to U.S. Large-Cap Equities | 12.08%1 | 0.39%2 |
1Annualized Distribution Yield as at October 31, 2023
2Plus applicable Sales Tax. Annual management fee reduced from 0.65% to 0.39%, effective July 6, 2023
2Plus applicable Sales Tax. Annual management fee reduced from 0.65% to 0.39%, effective July 6, 2023
Learn more about The Three Major Equity Essentials Suites below:
Canada’s Big Six Banks
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 currently represent approximately 25% of the total market capitalization of the S&P/TSX 60™ Index.
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.
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.
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, BKCL, CANL, CNCL, and USCL (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.
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.