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Australian native black swans glide in the water as they are silhouetted at sunset on Cherry Lake in Melbourne June 24, 2009.Mick Tsikas/Reuters

On Thursday, a name change will come into effect for two of Horizons ETFs' products. Horizons Canadian Black Swan ETF will be renamed Horizons Cdn Equity Managed Risk ETF. And the Horizons US Black Swan ETF will be renamed Horizons US Equity Managed Risk ETF.

Martin Fabregas, senior vice president, sales operations at Horizons says the decision to change the names of these ETFs, which have been around for two and a half years, was made because of the negative connotation around the term "black swan," which was being construed as "very doomsdayish."

The term black swan was brought into the public consciousness by author and statistician Nassim Nicholas Taleb. His book The Black Swan: The Impact of the Highly Improbable, released in 2007 was a bestseller. Mr. Taleb defined a black swan as a highly improbable event – one that is unpredictable, has a huge impact, and is explained away after the fact in order to appear less random than it was.

The problem is, not only did the ETFs' strategies have little to do with black swan events, they evidently scared the heck out of some would-be investors.

The Horizons Canadian Black Swan ETF allows investors to take a long position in the S&P/TSX 60 Index, but offers some downside protection via options. The objective is to protect investors should the Canadian benchmark index fall by 10 percent or so, over a period of about a month (similar to what happened from mid September to mid October).

Mark Noble, head of sales strategy at Horizons said the term "black swan, in a financial context, tends to suggest unknown, very uncommon risk events." These ETFs were not designed to protect investors during a black swan event, Mr. Noble says, which is something much more drastic.

Mr. Noble says Horizons' marketing department thought attaching the name black swan to these products would generate buzz. There was a lot of name recognition around Mr. Taleb at the time, he says. Unfortunately for Horizons, " people understood the term 'black swan event' too well – they realized you're really talking about unforeseen, catastrophic market events."

With the name changes, Horizons hopes investors will better understand who these ETFs are targeted at, and attract bigger inflows as a result.

"From a very basic level, the most basic marketing you have is the name of your product." said Mr. Noble.

Follow Niall McGee on Twitter: @niallcmcgeeOpens in a new window

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