Horizons ETFs Launches Canada's First Floating Rate Preferred Share ETF
TORONTO, Oct. 2, 2013 /CNW/ - Horizons ETFs Management (Canada) Inc.
("Horizons ETFs") and its affiliate AlphaPro Management Inc. are pleased to
announce the launch of the Horizons Active Floating Rate Preferred Share ETF
("HFP"), which will for the first time give Canadian investors the opportunity
to gain floating rate exposure from North American preferred shares through an
exchange traded fund.
Class E units and Advisor Class units of the HFP will begin trading today on
the Toronto Stock Exchange ("TSX") under the ticker symbols below.
| | TSX Ticker Symbol |
|Name of ETF |_________________________________|
| |Class E Units|Advisor Class Units|
|Horizons Active Floating Rate| HFP | HFP.A |
|Preferred Share ETF | | |
HFP will seek to generate income consistent with prevailing short-term
preferred share yields while stabilizing its market value from the effects of
interest rate fluctuations. HFP will invest primarily in the preferred shares
of Canadian companies. It may also invest, to a lesser extent, in the
preferred shares of companies located in the United States, as well as the
fixed-income securities of Canadian and U.S. issuers, including other
income-generating securities and exchange traded funds.
HFP will generally maintain a portfolio duration of less than two years.
Duration is an important metric generally used to gauge the interest rate
sensitivity of a fixed-income security that has a maturity, call or reset
date. Typically, the longer the duration of such a security, the more
sensitive its market price will be to interest rate fluctuations.
"Preferred shares have become popular with Canadian investors looking for a
higher level of tax-efficient income in today's low-rate environment," said
Howard Atkinson, President of Horizons ETFs. "However, preferred shares have
demonstrated that their prices can be just as sensitive to interest rate
fluctuations as bond prices, as we saw in June of this year, when a slight
rise in rates caused a sharp decline in the market prices of many preferred
shares. We feel it's important to bring to the market an ETF that can offer a
floating rate of income and a much lower risk profile than other options
available to Canadian preferred share investors."
HFP will be sub-advised by Fiera Capital Corporation ("Fiera"), one of the
largest preferred share managers in Canada. It will be overseen by the same
portfolio management team that sub-advises the Horizons Active Floating Rate
Bond ETF (HFR:TSX) and the Horizons Active Preferred Share ETF (HPR:TSX).
"HFR, our floating rate bond ETF, has attracted more than $200 million in
assets over the last 12 months, which we attribute to growing concerns over
interest rates, as well as to Fiera's excellent performance track record,"
said Mr. Atkinson. "HFP will offer a similar floating rate approach to
preferred shares combined with the exceptional preferred share management
capabilities of Fiera."
HFP has closed the offering of its initial Class E units and Advisor Class
units and will begin trading on the TSX when the market opens this morning.
Commissions, trailing commissions, management fees and expenses all may be
associated with an investment in exchange traded funds. Exchange traded funds
are not guaranteed, their values change frequently and past performance may
not be repeated. The prospectus contains important detailed information.
Please read the 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.
About Fiera Capital Corporation (www.FieraCapital.ca)
With close to $66 billion in assets under management, Fiera is a prominent
Canadian investment management firm. It is one of only a handful of
independent investment firms providing extensive expertise in Canadian active
and structured fixed income, Canadian and foreign equity, asset allocation and
non-traditional investment solutions through a broad range of strategies and
services. Fiera believes that integrated solutions diversified by asset class
and investment style, and supported by a disciplined risk management
framework, are key to achieving superior returns.
About Horizons ETFs Management (Canada) Inc. (www.HorizonsETFs.com)
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. With approximately $4.1 billion in assets under management and 73
ETFs listed on the TSX, 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 Global Investments
SOURCE Horizons ETFs Management (Canada) Inc.
Howard Atkinson, President, Horizons ETFs Management (Canada) Inc. (416)
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-0- Oct/02/2013 12:00 GMT
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