Three new ETFs offer U.S. Treasury exposure,
while an actively-managed options program provides investors a
unique opportunity to generate stable and higher yields
TORONTO, Oct. 5, 2023
/CNW/ - Horizons ETFs Management (Canada) Inc. ("Horizons ETFs" or the
"Manager") is pleased to announce that its Premium Yield
Suite (the "Premium Yield Suite") of three new ETFs has
begun trading today on the Toronto Stock Exchange
("TSX") under the symbols SPAY.U, MPAY.U, and
LPAY.U.
"As generating yield remains a top priority for investors,
our Premium Yield Suite offers a range of solutions that have been
thoughtfully designed that seek to satisfy the investment
objectives of income-seeking investors," said Rohit Mehta, President and CEO of Horizons.
"Our latest ETFs seek to offer short, medium or long-term
duration exposure to a portfolio of U.S. treasury securities –
while leveraging Horizons ETFs' expertise in option-writing to seek
to help manage downside risk and enable opportunities for greater
upside capture."
Horizons ETFs' Premium Yield Suite empowers Canadians to tailor
their duration exposure to U.S. treasuries in a way that fits with
their unique income needs and investment objectives: short (less
than 3 years) via SPAY.U, medium (5 to 10 years) via MPAY.U, and
long (10+ years) via LPAY.U. Targeted duration to U.S.
government-backed securities seek to offer a solid foundation to
protect portfolios while acting as a potential hedge against
recession and disinflationary growth stocks. Initial target
yields1 of 7.5 per cent (SPAY.U), 9.0 per cent (MPAY.U)
and 10.5 per cent (LPAY.U) further offer investors an opportunity
to generate significant monthly distributions.
The Premium Yield Suite now trading on the TSX will be offered
in both Canadian and U.S. dollar versions and are further described
in the table below:
|
ETF Name and
Ticker
|
Investment
Objective
|
Target
Duration
|
Mgmt
Fee*
|
Initial Target
Annualized Net Yield¹
|
|
Horizons Short-Term
U.S. Treasury Premium Yield ETF ("SPAY.U**" and
"SPAY")
|
SPAY.U seeks to
provide: (a) exposure to the performance of a portfolio of U.S.
Treasury securities, generally targeting a duration less than 3
years; and (b) high monthly distributions of interest income and
option premiums. To generate premiums and reduce volatility, SPAY.U
will employ a dynamic option program.
|
Less than
3 years
|
0.35 %
|
7.5 %
|
|
Horizons Mid-Term U.S.
Treasury Premium Yield ETF ("MPAY.U**" and
"MPAY")
|
MPAY.U seeks to
provide: (a) exposure to the performance of a portfolio of U.S.
Treasury securities, generally targeting a duration between 5 and
10 years; and (b) high monthly distributions of interest income and
option premiums. To generate premiums and reduce volatility, MPAY.U
will employ a dynamic option program
|
5 to 10
Years
|
0.40 %
|
9.0 %
|
|
Horizons Long-Term U.S.
Treasury Premium Yield ETF ("LPAY.U**" and
"LPAY")
|
LPAY.U seeks to
provide: (a) exposure to the performance of a portfolio of U.S.
Treasury securities, generally targeting a duration over 10 years;
and (b) high monthly distributions of interest income and option
premiums. To generate premiums and reduce volatility, LPAY.U will
employ a dynamic option program.
|
10+ Years
|
0.45 %
|
10.5 %
|
*Plus applicable sales tax
**Trades in U.S. dollars
Horizons ETFs' Premium Yield Suite leverages in-house expertise
through an actively-managed options program that monitors market
conditions and strategically adjusts the options overlay to seek to
help manage downside risk and maximize gains across interest rate
environments. Utilizing both put and call options on a portfolio of
U.S. Treasury securities, the Premium Yield Suite enables
flexibility and adaptability which may help to enhance performance
across various market conditions.
"Whether you're cautious in response to the current interest
rate environment or believe that there's an opportunity to take
advantage of the recent pause in the hiking cycle, our Premium
Yield Suite provides a duration and target yield that may align
with your unique goals, risk tolerance and monthly income needs,"
continued Mr. Mehta. "With premiums generated from option-writing
expected to be treated as capital gains, these ETFs may further
offer tax-efficient yield enhancement to investor portfolios, as
well."
For further information about the ETFs, please visit:
SPAY.U: www.HorizonsETFs.com/SPAY.U
MPAY.U: www.HorizonsETFs.com/MPAY.U
LPAY.U: www.HorizonsETFs.com/LPAY.U
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.
¹The amount of the monthly distributions of an ETF, and
therefore the initial targeted annualized net yield and the ongoing
annualized net yield of an ETF, may fluctuate based on market
conditions. There can be no assurance that an ETF will make any
distribution in any particular period or periods. The Manager may,
in its complete discretion, change the frequency of these
distributions, and any such change will be announced by press
release.
Commissions, management fees and expenses all may be
associated with an investment in exchange traded products managed
by Horizons ETFs Management (Canada) Inc. (the "Horizons Exchange Traded
Products"). The Horizons Exchange Traded Products are not
guaranteed, their value changes frequently and past performance may
not be repeated. Certain Horizons Exchange Traded Products may have
exposure to leveraged investment techniques that magnify gains and
losses and which may result in greater volatility in value and
could be subject to aggressive investment risk and price volatility
risk. Such risks are described in the prospectus. 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"
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.
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 (the "Horizons
Exchange Traded Products") managed by Horizons ETFs Management
(Canada) Inc. 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.
SOURCE Horizons ETFs Management (Canada) Inc.
