TORONTO, July, 30, 2020 /CNW/
- Horizons ETFs Management (Canada) Inc. ("Horizons ETFs" or the
"Manager") is pleased to announce the successful corporate
class reorganization of the Horizons Global Risk Parity ETF
("HRA") into the Horizons ReSolve Adaptive Asset Allocation
ETF ("HRAA"), a new class of shares of Horizons ETF Corp.
("Horizons MFC"), a multi-class mutual fund corporation
managed by the Manager. Shares of Horizons ReSolve Adaptive Asset
Allocation ETF trade on the Toronto Stock Exchange ("TSX")
under the ticker HRAA.
At a special meeting of unitholders of HRA (the
"Meeting") held on July 14,
2020, unitholders approved all matters related to the merger
(the "Merger") of HRA into HRAA. Within the corporate class
structure, although the value of any net interest income from the
settlement of any derivatives will be reflected in the net asset
value ("NAV") of HRAA, investors in HRAA are not expected to
receive any taxable distributions.
HRAA's investment objective is to seek long-term capital
appreciation by investing, directly or indirectly, in major global
asset classes, including, but not limited to equity indexes, fixed
income indices, interest rates, commodities and currencies. HRAA
provides exposure to these major global asset classes through
derivatives and securities, including futures contracts and forward
agreements. For purposes of applicable securities legislation, HRAA
is an alternative fund, and accordingly, is permitted to use up to
300% leverage in seeking to achieve its investment objectives. HRAA
is sub-advised by ReSolve Asset Management Inc., the same
sub-advisor that was employed by HRA prior to the Merger.
"HRAA further expands our growing line-up of alternative ETFs
and this reorganization enhances the ability of HRAA to take
advantage of global opportunities while still holding risk parity
as a cornerstone of its mandate," said Steve Hawkins, President and CEO of Horizons
ETFs. "I am confident that with the ReSolve team's seasoned
quantitative capabilities, and their use of advanced machine
learning tools, HRAA will be well-positioned to navigate market
volatility – particularly relevant given COVID-19's recent impact
on the global marketplace."
HRAA uses a portfolio allocation strategy commonly known as risk
parity. This is an approach that seeks to ensure that each asset
class in the portfolio contributes an equal amount of risk, thus
creating optimal portfolio diversification. HRAA uses a
quantitative process to dynamically measure the sensitivities of
major asset classes to a set of common risk factors over changing
market conditions. By considering asset allocation from the
perspective of systematic risks, it aims to keep the portfolio's
target level of annualized volatility at or below 12% and reduce
overall correlation to broader equity and fixed income markets.
"HRAA represents the next evolution of the global asset
allocation strategy that has been at the core of our investment
thesis for more than a decade," said Adam Butler, Chief Investment Officer of ReSolve
Asset Management. "Not only will HRAA be empowered to react
dynamically to all market conditions with greater conviction, it
will also be able to provide tax-efficiencies through Horizons
ETFs' corporate class structure."
HRAA will pay an annual management fee to the Manager equal to
0.85%. HRAA will also pay a performance fee to the Manager, if any,
equal to 15% of the amount of out-performance of HRAA over its
annualized benchmark threshold and high-water mark. Please read the
prospectus for further details about HRAA.
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 $14 billion of
assets under management and 92 ETFs listed on major Canadian stock
exchanges.
Commissions, management fees (including performance fees) and
expenses may all be associated with an investment in Horizons
ReSolve Adaptive Asset Allocation ETF ("the ETF") managed by
Horizons ETFs Management (Canada)
Inc. The ETF is an alternative mutual fund within the meaning of
National instrument 81-102 Investment Funds, and is permitted to
use strategies generally prohibited by conventional mutual funds
and ETFs, such as borrowing cash, selling securities short, and
employing leverage of up to 300%, amongst others. The use of these
strategies may accelerate the risk associated with the ETF. The ETF
is not guaranteed, its values change frequently and past
performance may not be repeated. The prospectus contains
important detailed information about the ETF. Please read the
prospectus and its risk disclosure before investing.
SOURCE Horizons ETFs Management (Canada) Inc.