The following four Horizons BetaPro Exchange Traded Funds announce the reimbursement of certain Forward Fees:
BetaPro S&P/TSX 60™ -2x Daily Bear ETF (“HXD”),
BetaPro S&P/TSX Capped Financials™ -2x Daily Bear ETF (“HFD”),
BetaPro S&P/TSX Capped Energy™ -2x Daily Bear ETF (“HED”) and
BetaPro Canadian Gold Miners -2x Daily Bear ETF (“HGD”)
TORONTO – January 6, 2023 – Horizons ETFs Management (Canada) Inc. (“Horizons ETFs”) announces that a processing error has been identified with respect to the calculation of certain forward fee amounts under forward transactions entered into by the four Exchange Traded Funds listed above (the “ETFs”) with one of its derivative counterparties (the “Counterparty”). The Counterparty’s processing error resulted in certain forward fee overstatements under these forward transactions. Effective as of market close today, each ETF was fully reimbursed by the Counterparty for the full amount (with interest) of these forward fee overstatements (the “Reimbursement”).
As a result of this Reimbursement, the net asset value per share (“NAVPS”) of each of the ETFs will reflect an increase on the date hereof as set out in the table below.
| ETF | NAVPS as of January 5, 2023 (prior to the Reimbursement) | Increase in NAVPS as a result of the Reimbursement (dollar amount and as a % of NAVPS) | Maximum Single Day Impact of Processing Error since Nov. 28, 2019 (as a % of NAVPS) | Average Daily Impact of Processing Error since Nov. 28, 2019 (as a % of NAVPS) |
|---|---|---|---|---|
| HXD | $7.1700 | $0.13 (1.81%) | 0.004% | 0.002% |
| HFD | $11.4034 | $0.15 (1.28%) | 0.005% | 0.002% |
| HED | $7.4480 | $0.13 (1.77%) | 0.016% | 0.002% |
| HGD | $5.3123 | $0.49 (9.27%) | 0.021% | 0.006% |
The ETFs will each obtain increased negative exposure to the applicable Underlying Indexes reflecting these increases to NAVPS beginning as of market close on January 9, 2023.
In addition to the full Reimbursement of each ETF, Horizons ETFs (in its personal capacity as the manager of each of the ETFs) will also reimburse any investor who may have sold shares of the ETFs (“ETF Shares”) during the applicable period from November 28, 2019 to the date hereof (the “Investor Reimbursement Period”) for the cumulative amount of the impact of the processing error on the stated NAV of their ETF Shares from the date of purchase to the date of sale, plus a related interest amount (“Direct Investor Reimbursements”). Furthermore, certain investors who purchased their ETF Shares prior to December 31, 2021 and who continue to hold such ETF Shares on the date hereof may also be eligible for additional incremental compensation. Only investors that have incurred a cumulative loss equal to at least $25.00 will be entitled to a Direct Investor Reimbursement. The estimated maximum single day impact and average daily impact of the processing error indicated in the table above are provided as examples only, and may provide a general indication of the likely range of reimbursements that may be payable to investors. Given that Horizons ETFs is not able to identify each investor who traded ETF shares during the Investor Reimbursement Period, we invite investors who may have been affected to contact us for reimbursement, if applicable, and to obtain further details regarding this reimbursement offer by telephone at 1-866-641-5739 (toll-free) or (416) 933-5745, or via email at [email protected].
All claims for Direct Investor Reimbursements or additional incremental compensation must be submitted, together with all documentation and evidence of shareholdings reasonably required by Horizons ETFs, by no later than August 15, 2023.
Horizons ETFs has agreed to be responsible for paying the Direct Investor Reimbursements and any additional incremental compensation without recourse to the assets of the ETFs and so these payments, if any, will not have any impact on the NAVPS of any of the ETFs. The Counterparty has agreed to reimburse Horizons ETFs for the full amount of any such Direct Investor Reimbursements and additional incremental compensation, if any.
In accordance with National Instrument 81-107 Independent Review Committee for Investment Funds, the decision to proceed with the Reimbursement, in addition to reimbursing individual investors who may have suffered a loss directly, has been reviewed by the independent review committee (the “IRC”) of each of the ETFs from a conflicts of interest perspective. The IRC has reviewed the potential conflict of interest matters related to the Reimbursement of the ETFs and has determined, in the IRC’s opinion after reasonable inquiry, that the proposed actions, if implemented, achieve a fair and reasonable result for each ETF.
It should be noted that Horizons ETFs did not benefit from this error. Horizons ETFs has not identified errors with respect to the forward fees payable in respect of other forward agreements it has entered into. Investors in other exchange traded funds managed by Horizons ETFs are unaffected by the processing error.
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 $22 billion of assets under management and 107 ETFs listed on major Canadian stock exchanges.
For further information:
[email protected]
(416) 933-5745 or (866) 641-5739
This communication is intended for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to purchase exchange traded products managed by Horizons ETFs Management (Canada) Inc. (the “Horizons Exchange Traded Products”) and is not, and should not be construed as, investment, tax, legal or accounting advice, and should not be relied upon in that regard. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. Investors should consult their professional advisors prior to implementing any changes to their investment strategies. These investments may not be suitable to the circumstances of an investor.
Commissions, management fees and expenses all may be associated with an investment in the Horizons Exchange Traded Products. 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.
Certain statements herein may constitute a forward-looking statement, including those identified by the expression “expect” and similar expressions (including grammatical variations thereof). The forward-looking statements are not historical facts but reflect the author’s current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. These and other factors should be considered carefully and readers should not place undue reliance on such forward looking statements. These forward-looking statements are made as of the date hereof and the authors do not undertake to update any forward-looking statement that is contained herein, whether as a result of new information, future events or otherwise, unless required by applicable law.
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