HORIZONS ETFs ANNOUNCES UPDATES TO FEES ON TWO ETFs
TORONTO, Aug. 18, 2022 /CNW/ - Horizons ETFs Management (Canada) Inc. ("Horizons ETFs" or the "Manager") will lower the annual management fees of the Horizons High Interest Savings ETF ("CASH") and remove the rebate on the annual management fee of the Horizons Cash Maximizer ETF ("HSAV" and together, the "ETFs") effective upon the close of business today.
The annual management fee for CASH is being reduced from fourteen basis points (0.14%) to ten basis points (0.10%) plus applicable sales taxes, with a target Management Expense Ratio ("MER") of ten basis points (0.10%), and the current rebate of one basis point (0.01%) is being removed. In respect of HSAV, the rebate on the annual management fee of five basis points (0.05%) is being removed, which will increase the effective management fee for HSAV from thirteen basis points (0.13%) to eighteen basis points (0.18%), plus applicable sales taxes, with a target MER of eighteen basis points (0.18%). The removal of HSAV's rebate will bring its management fee and MER in line with the Horizons USD Cash Maximizer ETF ("HSUV.U").
These updates to the annual management fees follow recent increases in the gross yields of the ETFs. To date this year, the gross yields on CASH and HSAV have increased from approximately 0.70%, to 3.03% and 3.00% respectively.
"After careful consideration, we have decided to permanently lower the management fee on CASH, while bringing HSAV's management fee in line with its USD denominated version, HSUV.U," said Steve Hawkins, President and CEO of Horizons ETFs. "Amid an increasingly populated high interest savings ETF landscape, we have decided that reducing CASH's management fee is in the best interest of its investors. With HSAV, in recognition of recent yield increases, in addition to the unique tax efficiencies it can offer, we have removed the previous rebate."
CASH seeks to maximize monthly income for unitholders while preserving capital and liquidity by investing primarily in high-interest deposit accounts with Canadian banks. The investment objective of CASH is similar to HSAV, except unlike HSAV, CASH seeks to pay out regular monthly distributions of income.
HSAV seeks to generate modest capital growth by investing primarily in high-interest deposit accounts with Canadian banks. While any decision to pay dividends or other distributions is within the discretion of Horizons ETFs, HSAV is not currently expected to make any regular distributions.
HSUV.U seeks to generate modest capital growth by investing primarily in high-interest U.S. dollar deposit accounts with Canadian banks. While any decision to pay dividends or other distributions is within the discretion of the Manager, HSUV.U is not currently expected to make any regular distributions.
In February 2022, Horizons ETFs announced a suspension of new subscriptions for HSAV after its NAV exceeded $2 billion. More information on this can be found here: https://horizonsetfs.com/horizons-cash-maximizer-etf-suspends-new-subscriptions-after-reaching-approximately-2-billion-in-assets/
The suspension of new subscriptions for HSAV remains in effect. Any subsequent resumption of subscriptions for HSAV will be announced by press release and posted on the Manager's website. During a period of suspended subscriptions, investors should note that ETF shares of HSAV would be expected to trade at a premium or substantial premium to the NAV per ETF Share of HSAV. During such periods, investors are strongly discouraged from purchasing ETF shares of HSAV on a stock exchange.
"High interest savings ETFs have become a powerful tool for investors seeking a way to earn an attractive yield while maintaining a liquid cash position throughout periods of market volatility," said Mr. Hawkins. "We are proud of our $3 billion in assets under management between our three high interest savings ETFs, which have achieved yields that have outpaced those offered by traditional savings accounts and are amongst the highest of all high interest savings ETFs offered in Canada, as well as how HSAV and HSUV.U have helped thousands of Canadian investors realize tax efficiencies in their non-registered accounts."
For more information about HSAV, please visit: www.HorizonsETFs.com/HSAV
For more information about CASH, please visit: www.HorizonsETFs.com/CASH
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 over $22 billion of assets under management and 105 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.
Certain statements may constitute a forward-looking statement, including those identified by the expression "expect", "anticipate" 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.
CASH, HSAV and HSUV.U use cash accounts and do not track a traditional benchmark but rather a compounding rate of interest paid on a cash deposit that can change over time and is not covered by the Canada Deposit Insurance Corporation or any other government deposit insurer. Any distributions which are received by HSAV and HSUV.U are reflected automatically in their respective net asset value (NAV). As a result, the shareholders of HSAV and HSUV.U are not expected to receive any taxable distributions.
In February 2022, HSAV announced a suspension of all new subscriptions. During a period of suspended subscriptions, investors should note that ETF shares of HSAV would be expected to trade at a premium or substantial premium to the NAV per ETF Share of HSAV. During such periods, investors are strongly discouraged from purchasing ETF shares of HSAV on a stock exchange. If HSUV.U experiences a significant increase in total NAV, the Manager may, at its sole discretion and if determined to be in the best interests of shareholders, decide to suspend subscriptions for new ETF shares of the ETF if considered necessary or desirable in order to manage potential tax implications and/or to permit the ETF to achieve, or continue to achieve, its investment objective. Any resumption of subscriptions for HSAV, or suspension of subscription for HSUV.U, will be announced by press release and announced on the Manager's website. A suspension of subscriptions, if any, will not affect the ability of existing Shareholders to sell their ETF Shares in the secondary market at a price reflective, or potentially higher than, the NAV per ETF Share.
SOURCE Horizons ETFs Management (Canada) Inc.