Horizons ETFs Announces Unitholder Approval of Proposed Corporate Class Reorganization for BetaPro Gold Bullion -2x Daily Bear ETF
With approval on BetaPro Gold Bullion -2x Daily Bear ETF, unitholder approval for all ETFs that are part of the corporate class reorganization is now complete
TORONTO, Nov. 13, 2019 /CNW/ - Horizons ETFs Management (Canada) Inc. ("Horizons ETFs") announced today that at a special meeting of the unitholders of the BetaPro Gold Bullion -2x Daily Bear ETF ("HBD") held on November 13, 2019, unitholders approved all matters relating to the merger of HBD, currently structured as a trust, into a corresponding class of shares of a new multi-class corporate fund structure to be managed by Horizons ETFs, as further described in the Management Information Circular dated October 4, 2019, previously mailed to unitholders.
HBD was the final ETF to receive approval from unitholders for reorganization into the multi-class corporate fund structure. On November 12, 2019, Horizons ETFs announced that it had received unitholder approval on the Mergers (the "Mergers") of 43 other ETFs (the "ETFs") that were proposed for reorganization, as set out in Horizons ETFs' press release dated August 23, 2019.
The necessary regulatory and Independent Review Committee approvals have also been received.
Accordingly, Horizons ETFs expects to proceed with HBD's merger on November 27, 2019. The other ETFs are also expected to proceed with their Mergers on November 27 and November 29, as previously indicated. HBD will continue to trade as normal up until its merger, and will continue trading on the trading day following the Merger under the same ticker.
It is important to note that HBD is not expected to carry forward any tax liability into the proposed multi-class corporate fund structure, and no historical or retroactive taxable implications to unitholders of HBD are expected.
The reorganization is not expected to be a taxable event for unitholders of HBD provided that, in the case of Canadian resident unitholders who hold units of HBD in taxable accounts, such unitholders make a joint election with the proposed multi-class corporate fund structure under Section 85 of the Income Tax Act (Canada) as part of the exchange from their existing trust units into shares of a class of the new corporate fund structure. Horizons ETFs is establishing a process to provide assistance to unitholders in taking the necessary steps to file the joint election, which will be free of charge. Additional information can be found here: https://www.horizonsetfs.com/section-85-election.
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 approximately $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.
The Horizons Exchange Traded Products include our BetaPro products (the "BetaPro Products"). The BetaPro Products are alternative mutual funds within the meaning of National Instrument 81-102 Investment Funds, and are permitted to use strategies generally prohibited by conventional mutual funds: the ability to invest more than 10% of their net asset value in securities of a single issuer, to employ leverage, and engage in short selling to a greater extent than is permitted in conventional mutual funds. While these strategies will only be used in accordance with the investment objectives and strategies of the BetaPro Products, during certain market conditions they may accelerate the risk that an investment in units of a BetaPro Product decreases in value. The BetaPro Products consist of our 2x Daily Bull and 2x Daily Bear ETFs ("2x Daily ETFs"), Inverse ETFs ("Inverse ETFs") and our BetaPro S&P 500 VIX Short-Term Futures™ ETF (the "VIX ETF"). Included in the 2x Daily ETFs and the Inverse ETFs are the BetaPro Marijuana Companies 2x Daily Bull ETF ("HMJU") and BetaPro Marijuana Companies Inverse ETF ("HMJI"), which track the North American MOC Marijuana Index (NTR) and North American MOC Marijuana Index (TR), respectively. The 2x Daily ETFs and certain other BetaPro Products use leveraged investment techniques that can magnify gains and losses and may result in greater volatility of returns. These BetaPro Products are subject to leverage risk and may be subject to aggressive investment risk and price volatility risk, among other risks, which are described in their respective prospectuses. Each 2x Daily ETF seeks a return, before fees and expenses, that is either 200% or –200% of the performance of a specified underlying index, commodity futures index or benchmark (the "Target") for a single day. Each Inverse ETF seeks a return that is –100% of the performance of its Target. Due to the compounding of daily returns a 2x Daily ETF's or Inverse ETF's returns over periods other than one day will likely differ in amount and, particularly in the case of the 2x Daily ETFs, possibly direction from the performance of their respective Target(s) for the same period. Hedging costs charged to BetaPro Products reduce the value of the forward price payable to that ETF. Due to the high cost of borrowing the securities of marijuana companies in particular, the hedging costs charged to HMJI are expected to be material and are expected to materially reduce the returns of HMJI to unitholders and materially impair the ability of HMJI to meet its investment objectives. Currently, the manager expects the hedging costs to be charged to HMJI and borne by unitholders will be between 15.00% and 35.00% per annum of the aggregate notional exposure of HMJI's forward documents. The hedging costs may increase above this range. The manager will publish, on its website, the updated monthly fixed hedging cost for HMJI for the upcoming month as negotiated with the counterparty to the forward documents, based on the then current market conditions. The VIX ETF, which is a 1x ETF, as described in the prospectus, is a speculative investment tool that is not a conventional investment. The VIX ETF's Target is highly volatile. As a result, the VIX ETF is not intended as a stand-alone long-term investment. Historically, the VIX ETF's Target has tended to revert to a historical mean. As a result, the performance of the VIX ETF's Target is expected to be negative over the longer term and neither the VIX ETF nor its target is expected to have positive long-term performance. Investors should monitor their holdings in BetaPro Products and their performance at least as frequently as daily to ensure such investment(s) remain consistent with their investment strategies.
SOURCE Horizons ETFs Management (Canada) Inc.