Approaching its ten year anniversary, HXT remains the
lowest-cost ETF in Canada with an
effective management fee of 0.03%
TORONTO, Dec. 30, 2019 /CNW/ - Horizons ETFs Management
(Canada) Inc. ("Horizons
ETFs") is pleased to announce that the four basis point (0.04%)
rebate on the annual management fee of the Horizons
S&P/TSX 60™ Index ETF ("HXT") will remain in effect
until at least December 31, 2020.
This means that the effective annual management fee on HXT
continues at three basis points (0.03%), plus applicable sales
taxes. HXT's published management expense ratio ("MER") has
remained at 0.03% for every reported fiscal period since
January 1, 2016. With the extension
of the rebate, HXT continues to be the lowest-cost Canadian equity
ETF.
HXT seeks to replicate, to the extent possible, the performance
of the S&P/TSX 60™ Index (Total Return), net of expenses. The
S&P/TSX 60™ Index (Total Return) is designed to measure the
performance of the large-cap market segment of the Canadian equity
market.
"HXT continues to be the lowest-cost ETF in Canada, offering Canadians the most
cost-efficient option to invest in large-cap Canadian
equities," said Steve Hawkins,
President and CEO of Horizons ETFs. "For nine plus years now,
HXT has shown investors that our innovative total return ETF
structure can deliver index returns with tax efficiency and low
tracking-error, as HXT has not paid out a taxable distribution
since its inception in 2010."
HXT is Horizons ETFs' oldest Total Return Index ("TRI")
ETF and largest in terms of assets under management ("AUM").
In August of 2018, HXT surpassed $2
billion in AUM, joining only 10 other ETFs in Canada to have achieved that mark at the
time.
On December 2, 2019, Horizons ETFs
announced the completion of the reorganization (the
"Reorganization") of 15 TRI ETFs (the "Reorganized
ETFs"), including HXT, into Horizons ETF Corp., a multi-class
corporate fund structure managed by Horizons ETFs.
Unlike a traditional physical replication ETF that typically
purchases the securities found in the relevant index in the same
proportions as the index, most Horizons TRI ETFs use a synthetic
structure that never buys the securities of an index directly.
Instead, the Horizons TRI ETFs receive the total return of the
applicable index by entering into Total Return Swap agreements with
one or more of the Canadian banks, which provide the ETFs with the
total return of the relevant index.
"With our corporate class reorganization now complete, I am
proud to say that our TRI ETFs maintain all their same
advantages," said Mr. Hawkins. "For all of our TRI ETFs,
including HXT, Canadian investors will continue to enjoy
tax-efficiency for taxable accounts, low tracking-error and
competitive fees."
About Horizons ETFs Management (Canada) Inc.
(www.HorizonsETFs.com)
Horizons ETFs Management (Canada) Inc. is an innovative financial
services company and offers one of the largest suites of exchange
traded funds in Canada. The
Horizons ETFs product family includes a broadly diversified range
of solutions for investors of all experience levels to meet their
investment objectives in a variety of market conditions. Horizons
ETFs has more than $10 billion of
assets under management and 91 ETFs listed on major Canadian stock
exchanges.
Commissions, management fees and expenses all may be
associated with an investment in exchange traded products (the
"Horizons Exchange Traded Products") managed by Horizons ETFs
Management (Canada) Inc. The
Horizons Exchange Traded Products are not guaranteed, their values
change frequently and past performance may not be repeated. The
prospectus contains important detailed information about the
Horizons Exchange Traded Products. Please read the relevant
prospectus before investing.
Horizons Total Return Index ETFs ("Horizons TRI ETFs") are
generally index-tracking ETFs that use an innovative investment
structure known as a Total Return Swap to deliver index returns in
a low-cost and tax-efficient manner. Unlike a physical replication
ETF that typically purchases the securities found in the relevant
index in the same proportions as the index, most Horizons TRI ETFs
use a synthetic structure that never buys the securities of an
index directly. Instead, the ETF receives the total return of the
index through entering into a Total Return Swap agreement with one
or more counterparties, typically large financial institutions,
which will provide the ETF with the total return of the index in
exchange for the interest earned on the cash held by the ETF. Any
distributions which are paid by the Index constituents are
reflected automatically in the net asset value (NAV) of the ETF. As
a result, the Horizons TRI ETF receives the total return of the
index (before fees), which is reflected in the ETF's share price,
and investors are not expected to receive any taxable
distributions. Some Horizons TRI ETFs use physically replication
instead of the total return swap.
SOURCE Horizons ETFs Management (Canada) Inc.