New ETF gives investors timely access to high dividend yielding companies listed in Hong Kong
TORONTO, January 12, 2016 – Horizons ETFs Management (Canada) Inc. (“Horizons ETFs”) is pleased to announce the launch of the Horizons China High Dividend Yield Index ETF (“HCN”), which provides exposure to high dividend yielding Hong Kong-listed equity securities.
Units of the ETF will begin trading today on the Toronto Stock Exchange (“TSX”) in Canadian dollars under the ticker symbol “HCN”.
China is currently the world’s second largest economy (by GDP), surpassing $10 trillion USD in 2014, and predicted to more than double to $22 trillion by 2030. China’s growth rate is expected to range between 6% and 8% over the next few years, according to Mirae Asset Global Investments (“Mirae Asset”) – nearly four times the growth rate expected for developed economies such as the U.S. and Canada.
HCN seeks investment results that, before fees and expenses, generally correspond to the performance of the Hang Seng High Dividend Yield Index (the “Underlying Index”). The Underlying Index is designed to measure the performance of 50 of the highest dividend yielding equity securities, which include REITs, in the Hang Seng Index.
“Historically, many Canadian investors sought exposure to emerging Asia by holding North American multi-national stocks which have business interests in Asian economies,” said Steve Hawkins, Co-CEO of Horizons ETFs. “The dynamics of the Chinese economy are changing and, in order to really capture China’s long-term economic growth, investors should consider the direct exposure that HCN provides.”
Through HCN, investors gain exposure to China’s robust economic growth through equity securities that have a consistent three-year track record of paying dividends. A significant number of the Hong Kong-listed dividend-paying companies which HCN provides exposure to are China-based companies or have substantial business interests in mainland China.
“By investing in top dividend paying companies listed on the Hong Kong Stock Exchange, investors are not only getting timely exposure to Chinese companies with consistent dividend yields, but are also getting the added benefit of Hong Kong’s modern market reforms, regulatory oversight and structure,” added Mr. Hawkins.
Beginning with the entire universe of large-cap and mid-cap issuers in the Hang Seng Index, the Hang Seng High Dividend Yield Index is created by screening for three factors: liquidity, dividend paying track record, while eliminating listings with the highest one-year volatility.
The Horizons Hang Seng High Dividend Yield ETF, listed on the Hong Kong Stock Exchange and managed by Mirae Asset Global Investments (Hong Kong) Limited, a subsidiary of Horizons ETFs’ parent company Mirae Asset, also tracks the Underlying Index.
“This is essentially the first cross-listed mandate offered in Canada that also exists in our Hong Kong-based ETF business,” said Taeyong Lee, Co-CEO of Horizons ETFs and President, Mirae Asset’s Global ETF Business. “HCN is a great example of the synergy that the Horizons ETFs and Mirae Asset partnership has brought to the Canadian ETF landscape, combining the Asian market expertise of Mirae Asset with Horizons ETFs’ expertise in launching low-cost, innovative ETF solutions in Canada. It’s a unique Asian-equity solution designed to appeal to the Canadian investor.”
HCN has closed the offering of its initial units and it will begin trading on the TSX when the market opens today.