CLARE O’HARA WEALTH MANAGEMENT REPORTER
PUBLISHED MARCH 6, 2024
Horizons ETF Management (Canada) Inc. is changing its name to increase its recognition, as the country’s fourth-largest exchange traded fund company looks to double its assets under management and boost its ETF market share to 10 per cent over the next five years.
In May, Horizons is set to rebrand to Global X Investments Canada Inc. and retire the name with which it has been operating since 2005, when it first opened its doors as one of Canada’s first ETF providers. The new name matches New York-based Global X ETFs, which is owned and operated by Horizons’ parent company, Seoul-based Mirae Asset Financial Group.
Horizons chief executive Rohit Mehta says the move to Global X – which has an existing footprint in Europe, Asia, South America, Australia and the United States – will accelerate Horizons ETFs’ market share in Canada into double digits. It currently manages $30.5-billion in assets, or 7.5-per-cent market share of the industry in Canada, according to a recent report by National Bank Financial. That is up from the $20-billion in assets – or 6.2-per-cent market share – it had at the end of 2021.
“When you take a look at the broader movement in the ETF ecosystem, people want to deal with fewer companies but have deeper relationships. And part of that deeper relationship is making sure you have the bench strength and expertise – which we have in Canada,” Mr. Mehta said in an interview ahead of the rebrand announcement on Wednesday.
“But people didn’t know we had global strength because they did not connect that we were a part of the Mirae boilerplate.”
Mr. Mehta, who joined the company last May after former head Steve Hawkins abruptly retired at the end of 2022, has been busy recruiting new leadership roles at the company – including a new seven-person executive team.
Unlike Horizons, many global companies in Canada don’t have local “on-the-ground” expertise, he said. Rather, they tap into talent in other jurisdictions for certain investment mandates. Mr. Mehta said Horizons will continue to be committed to using Canadian-based investment expertise, even after the rebrand.
Mirae’s ETF businesses have total assets of over $154-billion globally. While Horizons’ suite of 117 ETFs will be updated with the new Global X brand in May, they will continue to trade under their current ticker symbols and mandates.
Horizons is well known by investors for its actively managed ETFs, a group of funds that is one of the largest in the country with about $4.7-billion in assets, as well as launching the world’s first cannabis fund, the Horizons Marijuana Life Sciences Index ETF HMMJ-T. The company also gained popularity with its BetaPro funds, a group of leveraged and inverse investment strategies aimed at more experienced investors. (These funds will continue to run under the BetaPro name.)
In the U.S., Global X ETFs has more than 100 funds that span disruptive tech, equity income, commodities and international funds. Canadians currently own approximately $1-billion of the U.S.-listed Global X funds.
“It goes back to the importance of recognition, as many of the Canadian advisers who were buying Global X funds were not aware it was a part of the same organization as Horizons,” Mr. Mehta said.
Since the appointment of Mr. Mehta 10 months ago, Horizons has added another 18 funds in Canada that have generated sales of more than $2-billion. And while the company has paused new product launches during the transition, Mr. Mehta said there will be future opportunity to see some Global X investments come to the country.
“Over its history, Horizons ETFs has built a reputation as a ‘permanent innovator’ in the Canadian market,” said Hyeon-Joo Park, the founder, chair and global strategy officer at Mirae Asset, in a statement Wednesday. “Now, under the Global X brand, that status and the services that come with it, become exactly that – global.”
Over the next five years, the company will look to expand its existing product shelf to attract new groups of investors. Mr. Mehta said that, under the Global X brand, it is already building partnerships with new index providers, and exploring new fund ideas similar to the launch of the U.S and Canadian T-Bill products Horizons launched last year, which brought in about $1-billion in assets.
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