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Press release from CNW Group

Horizons Enhanced U.S. Equity Income Fund Completes Conversion into ETF

Friday, August 31, 2012

Horizons Enhanced U.S. Equity Income Fund Completes Conversion into ETF17:01 EDT Friday, August 31, 2012TORONTO, Aug. 31, 2012 /CNW/ - Horizons Exchange Traded Funds Inc. ("Horizons ETFs") and its affiliate AlphaPro Management Inc. ("AlphaPro") are pleased to announce the conversion of the Horizons Enhanced U.S. Equity Income Fund (the "Fund") into an open-end exchange traded fund. The Fund has been renamed the Horizons Enhanced US Equity Income ETF (the "ETF") and the Class E units of the ETF (the "Class E Units") will begin trading on the Toronto Stock Exchange (the "TSX") on September 4, 2012, under the symbol HES.Concurrent with, but unrelated to, the conversion, the ETF will begin issuing Advisor Class units (the "Advisor Class Units") which will also begin trading on the TSX on September 4, 2012, under the symbol HES.A.The investment objective of the ETF is to provide its unitholders with: (a) exposure to the performance of an equal weighted portfolio of equity securities of large capitalization U.S. companies; and (b) monthly distributions of dividend and call option income.  The ETF will invest primarily in a portfolio of equity and equity-related securities of the 50 largest and most liquid U.S. companies, as measured by market capitalization, listed on the NYSE or the NASDAQ.The ETF will rebalance, on an equal weight basis, the portfolio of constituent securities on a semi-annual basis. To mitigate downside risk and generate income, the ETF will generally write 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 ETF will generally seek to hedge substantially all of its exposure to the U.S. dollar back to the Canadian dollar and will not have exposure to the U.S. dollar in excess of 50% of its net asset value.The Fund, originally a closed-end investment fund, issued approximately 3.1 million Class A units (the "Class A Units") for gross proceeds of approximately $31.4 million since its inception in June 29, 2011.After the close of business today, the Class A Units of the Fund converted on one-for-one basis (1:1) into a total of 3,139,000 Class E Units of the ETF.AlphaPro is the manager and trustee of the ETF, and its affiliate Horizons Investment Management Inc., is responsible for implementing the investment strategies of the ETF's Portfolio. Eden Rahim, Vice-President and Options Strategist, with Horizons Investment Management Inc. leads the investment team providing the portfolio management services to the ETF. Mr. Rahim has more than two decades of experience managing options and hedging strategies for institutional clients.Commissions, trailing commissions, management fees and expenses all may be associated with investments in the ETF. The ETF is not guaranteed, its value will change frequently and past performance may not be repeated. Please read the prospectus before investing.A copy of the ETF's final prospectus is available at www.sedar.com or on the Horizons Exchange Traded Funds website at www.horizonsetfs.com.The ETF has closed the initial offering of its Class E Units and Advisor Class Units and will begin trading on September 4, 2012 on the TSX when the market opens.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 $3.4 billion in assets under management and 82 ETFs listed on the TSX, the Horizons ETFs family makes up one of the largest families of ETFs in Canada. Horizons ETFs is a subsidiary of Horizons ETFs Management (Canada) Inc. and a member of the Mirae Asset Financial Group.SOURCE: Horizons ETFs Management (Canada) Inc.For further information: Martin Fabregas, Investor Relations, (416) 601-2508 or (866) 641-5739