Press release from CNW Group
Horizons Enhanced U.S. Equity Income Fund Announces Exercise of Over-Allotment Option
Friday, July 15, 2011
Horizons Enhanced U.S. Equity Income Fund Announces Exercise of Over-Allotment Option10:10 EDT Friday, July 15, 2011TORONTO, July 15, 2011 /CNW/ - Horizons Exchange Traded Funds Inc. ("Horizons ETFs") and AlphaPro Management Inc. ("AlphaPro") are pleased to announce that the syndicate of agents for the initial public offering of the Horizons Enhanced U.S. Equity Income Fund (the "Fund") has exercised its over-allotment option for an additional 139,000 Class A units of the Fund. In total, the Fund has issued 3,139,000 Class A units, for aggregate gross proceeds of $31,390,000. The Class A units are listed for trading on the Toronto Stock Exchange ("TSX") under the symbol HES.UN.The Fund is expected to automatically convert into an exchange traded fund ("ETF") by no later than November 30, 2012.The Fund's investment objectives are to provide holders of units with: (a) the performance of an equal weighted portfolio of equity securities of large capitalization U.S. companies; (b) the opportunity for capital appreciation; (c) monthly distributions; and (d) lower overall volatility of portfolio returns than would be experienced by owning the Portfolio Securities (as defined below) without employing a covered call option strategy. To mitigate the downside risks associated with holding the Portfolio Securities, generate cashflow and allow for potential capital appreciation, the Fund generally writes short-term, "out-of-the-money" covered call options on 100% of the Portfolio Securities. The level of covered call option writing may vary based on market volatility and other factors. The Fund generally seeks to hedge substantially all of its exposure to the U.S. dollar back to the Canadian dollar.The Fund invests, on an approximately equally weighted basis, in a portfolio (the "Portfolio") of securities of the 50 largest and most liquid U.S. companies, as measured by market capitalization, listed on the NYSE or NASDAQ (the "Portfolio Securities"). The Portfolio will be rebalanced semi-annually on an equally weighted basis. The call options will be written with strike prices that are generally 5% above the current market price of the Portfolio Securities, with terms of one to two months depending on the prevailing levels of volatility.The Fund's strategy does not involve managing the Portfolio to achieve a specific distribution target therefore the Fund will not have a fixed distribution. The Fund intends to pay monthly distributions based on, among other things, the actual dividends received on the Portfolio Securities, actual net premiums from call options received in respect of the month the distribution is paid and the Fund's estimated liabilities and expenses, including estimates of near term obligations relating to closing out option positions that are in-the-money.The syndicate of agents for the offering was co-led by CIBC and BMO Capital Markets, and included National Bank Financial Inc., TD Securities Inc., GMP Securities L.P., HSBC Securities (Canada) Inc., Canaccord Genuity Corp., Desjardins Securities Inc., Macquarie Private Wealth Inc., Raymond James Ltd., Dundee Securities Ltd., Industrial Alliance Securities Inc., Mackie Research Capital Corporation, MGI Securities Inc., Rothenberg Capital Management Inc. and Wellington West Capital Markets Inc.About Horizons Exchange Traded Funds Inc. (www.horizonsetfs.com)Horizons ETFs is an innovative financial services company offering the Horizons ETFs family of ETFs. 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 $3 billion in assets under management and more than 70 listings on the TSX, the Horizons ETFs family makes up the largest selection of ETFs in Canada. Horizons ETFs is a member of the Jovian Capital Corporation (TSX: JOV) group of companies.For further information: please visit www.horizonsetfs.com or contact: Howard Atkinson, President, AlphaPro (416) 777-5167 or 1-866-641-5739, firstname.lastname@example.org.