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Horizons ETFs Completes Changes for Three Asset Allocation ETFs

25/08/23 - 12:29 am

TORONTO – August 25, 2023 – Horizons ETFs Management (Canada) Inc. (“Horizons ETFs” or the “Manager”) announced today that it has substantially completed its changes (the “Changes“) for three exchange-traded funds within its asset allocation ETF suite, currently, the Horizons Conservative Asset Allocation ETF (“HCON”), the Horizons Balanced Asset Allocation ETF (“HBAL”), and the Horizons All-Equity Asset Allocation ETF (“HEQT” and together, the “ETFs”).

The Changes follow approvals by unitholders of the ETFs at special meetings held on August 23, 2023. The Changes to the investment objectives (including changes to the currency hedging strategy of each ETF), the fee structure, and distribution policy of each ETF are effective at the opening of trading today, August 25, 2023.

The ETFs are part of Horizons ETFs’ asset allocation family – a suite of ETFs that provide multi-asset global equity and fixed income exposure and are designed to deliver a combination of income and long-term capital growth.

Asset allocation ETFs continue to be an important solution for  investors seeking simple, low-cost and well-diversified  portfolios,” said Rohit Mehta, President and CEO of Horizons ETFs. “Our improvements to our asset allocation ETF suite are a recognition and a reflection of the growing demand among Canadians for investments that can simultaneously offer the potential for both income and long-term capital growth.”

The changes to each ETFs’ investment objective are substantially as follows:

ETFPrior Investment ObjectiveNew Investment Objective
HCONThe investment objective of the ETF is to seek moderate long-term capital growth using a conservative portfolio of exchange traded funds.The ETF seeks to provide a combination of income and moderate long-term capital growth, primarily by investing in exchange traded funds that provide exposure to a globally diversified portfolio of fixed income and equity securities.
HBALThe investment objective of the ETF is to seek long-term capital growth using a balanced portfolio of exchange traded funds.The ETF seeks to provide a combination of long-term capital growth and a moderate level of income, primarily by investing in exchange traded funds that provide exposure to a globally diversified portfolio of equity and fixed income securities.
HGROThe investment objective of the ETF is to seek long-term capital growth using a portfolio of primarily equity-focussed exchange traded funds.The ETF seeks to provide long-term capital growth, primarily by investing in exchange traded funds that provide exposure to a globally diversified portfolio of equity securities.

The changes to each ETFs’ currency hedging strategy are substantially as follows:

ETFPrior Currency Hedging DisclosureNew Currency Hedging Disclosure
HCONHCON will use currency forwards to hedge its non-Canadian dollar currency exposure to the Canadian dollar at all times.The ETF, at its sole discretion, may elect to hedge the foreign currency exposure of its fixed income investments back to the Canadian dollar through the use of currency forwards or investments in hedged fixed income exchange traded funds. The ETF will not hedge the foreign currency exposure of any asset class other than fixed income.
HBALHBAL will use currency forwards to hedge its non-Canadian dollar currency exposure to the Canadian dollar at all times.The ETF, at its sole discretion, may elect to hedge the foreign currency exposure of its fixed income investments back to the Canadian dollar through the use of currency forwards or investments in hedged fixed income exchange traded funds. The ETF will not hedge the foreign currency exposure of any asset class other than fixed income.
HGROHGRO will use currency forwards to hedge its non-Canadian dollar currency exposure to the Canadian dollar at all times.The ETF will not hedge its exposure to foreign currencies back to the Canadian dollar.

The changes to each ETF’s fee structure are substantially as follows:

ETFPrior Management Fee DisclosureCurrent Management Fee Disclosure
HCONThe management fees directly payable to the Manager by each ETF are nil.However, the total return index exchange traded funds managed by the Manager (“TRI ETFs”) and held by the ETFs will pay management fees and will incur trading expenses.The Manager pays all of the operating and administrative expenses incurred by the ETFs. Based on the historical management expense ratios of the portfolios of TRI ETFs held by the ETFs, the total management expense ratios of HCON, HBAL and HGRO, for the 2022 calendar year, are expected to be approximately 0.14%, 0.15% and 0.16%, respectively, and will not exceed 0.15%, 0.16% and 0.17%, respectively, as at any rebalance.Based on historical trading expense ratios of the TRI ETFs held by the ETFs, the aggregate underlying trading expense ratios of the portfolios of TRI ETFs held by HCON, HBAL and HGRO, for the 2022 calendar year, are expected to be approximately 0.10%, 0.09% and 0.08%, respectively, and are not expected to exceed 0.11%, 0.10% and 0.10%, respectively. As trading expense ratios include expenses outside of the control of the Manager, the trading expense ratios of the portfolios of TRI ETFs held by HCON, HBAL and HGRO are subject to change.Each ETF pays annual management fees (the “Management Fees”) to the Manager equal to 0.18% of the net asset value of the Units of that ETF, plus applicable Sales Tax. The Management Fees are calculated and accrued daily and payable monthly in arrears.The Manager pays all of the operating and administrative expenses incurred by the ETFs. The total management expense ratios of HCON, HBAL, and HGRO are expected to be approximately 0.20%.The trading expense ratio of each ETF is expected to be 0.02%. As trading expense ratios include expenses outside of the control of the Manager, the trading expense ratios of the portfolios held by an ETF are subject to change.
HBALSame as aboveSame as above
HGROSame as aboveSame as above

The Manager is changing the names of each ETF to the names set forth in the following table, effective at the opening of trading today, August 25, 2023.

ETFPrior ETF NameNew ETF Name
HCONHorizons Conservative TRI ETF PortfolioHorizons Conservative Asset Allocation ETF
HBALHorizons Balanced TRI ETF PortfolioHorizons Balanced Asset Allocation ETF
HGROHorizons Growth TRI ETF PortfolioHorizons All-Equity Asset Allocation ETF

Additionally, the Manager is changing the ticker symbol of HGRO as follows:

ETFPrior Ticker SymbolNew Ticker Symbol
Horizons Growth TRI ETF PortfolioHGROHEQT

The change to the ticker symbol of HGRO will be effective at the opening of trading today, August 25, 2023. The ticker symbols for each of HCON and HBAL will remain the same.

In connection with the Changes, the Manager expects that each ETF will make distributions to its unitholders on a monthly basis. Monthly distributions will be paid in cash. Unitholders can elect to participate in the distribution reinvestment plan for the ETFs. For further information regarding distributions, please read the prospectus and visit www.HorizonsETFs.com.

Further details regarding the Changes can be found at www.sedarplus.com and www.HorizonsETFs.com.

About Horizons ETFs Management (Canada) Inc. (www.HorizonsETFs.com)
Horizons ETFs Management (Canada) Inc. is an innovative financial services company with 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 currently has more than $27 billion of assets under management and 110 ETFs listed on major Canadian stock exchanges. Horizons ETFs is a wholly owned subsidiary of the Mirae Asset Financial Group, which manages approximately $710 billion of assets across 13 countries around the world.

Investor inquiries:
Contact Horizons ETFs at 1-866-641-5739 (toll-free) or (416) 933-5745
info@horizonsetfs.com 

Media inquiries:
Contact Jonathan McGuire
Assistant Vice President, ETF Strategy
Horizons ETFs Management (Canada) Inc.
(416) 640-2956
jmcguire@horizonsetfs.com

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