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New market player offers zero management fee ETFs

In this research report created this week for The Globe And Mail, we look at Canadian ETFs: May’s launches and terminations.

A new ETF issuer joined the industry during May with a suite of alternative ETFs.

Accelerate Financial Technologies’ mission is to “democratize alternative investments by offering institutional-caliber hedge fund and private equity strategies in low-cost, liquid and easy to use ETFs accessible by any investor.” Instead of charging a management fee, each ETF has a performance fee over their high-water mark or its respective benchmark.

Find the full report here

This article is written by Kimberly Yip Woon Sun,  ETF Analyst for Inovestor Inc. 

Portfolio Manager’s June comment For May Results

The S&P/TSX Total Return Index contracted by 3.1% in May that is less then both the S&P 500 (-6.35%) and the MSCI ACWI ex. USA (-5.26%). At May end, after a first declining month, the YTD S&P/TSX Total Return Index was up 13.4%.

Markets have been on a roller coaster as the probability of tariff wars are rising. On top of tariffs, US investors were increasingly concerned in regards to potential regulation of the American mega cap technology companies due to the monopolistic nature of their business models.

The best TSX sector in May was Information Technology, up 4.3%, as the largest players such as CSU OTEX, GIB.A and SHOP,) all posted good quarterly results. On the other hand, the worst sector was Health Care, down 13.8%, a sector in which INOC is not invested.

Looking more specifically at INOC, defensive stocks such as ATD and DOL outperformed nicely as investors were looking for a safe heaven away from the surrounding chaos. INOC’s best performer in May was CCL.B following better than expected results. The three weakest performers for the month were Norbord, Magna, and Linamar, their poor performance was driven by macro economics and politics but also in the case of Magna by management downward revision of this year financial results guidance.

Thirteen defensive U.S. health care and consumer staples stocks

In this week’s filter created for The Globe and Mail, we screened for Thirteen defensive U.S. health care and consumer staples stocks.

Looking back at May, it was the worst month so far in 2019 for the markets. The U.S.-China trade war spiralled deeper early in the month, with U.S. President Donald Trump raising tariffs on US$200-billion worth of Chinese products and China retaliating by setting tariffs on US$60-billion of American goods. Last week, the markets tumbled as the geopolitical mess worsened due to escalating trade tensions. In addition, last Thursday Mr. Trump threatened Mexico with a new wave of tariffs, which will begin on June 10. During this period of extended uncertainty, non-cyclical sectors hold up better due to their defensive characteristics. Today, we will screen U.S. health care and consumer staples stocks to identify some companies with solid operations and revenues that may be able to withstand this trade-war storm. We screened the U.S. stock universe by focusing on the following criteria:

  • Market capitalization greater than US$10-billion;
  • A positive 12-month change in the economic value-added (EVA) metric – a positive figure shows us that the company’s profits are increasing at a faster and greater pace than the costs of capital. The EVA is the economic profit generated by the company and is calculated as the net operating profit after tax minus capital expenses;
  • A positive 12-month change in the economic performance index (EPI) and a current EPI greater than one – this ratio is the return on capital to cost of capital;
  • A future-growth-value-to-market-value ratio (FGV/MV) of between 40 per cent and negative 70 per cent. We chose this range to eliminate stocks that trade at an exaggerated premium or discount as that would increase the risk. This ratio represents the proportion of the market value of the company that is made up of future growth expectations rather than the actual profit generated. The higher the percentage, the higher the baked-in premium for expected growth and the higher the risk.
  • Free-cash-flow-to-capital ratio. This metric gives us an idea of how efficiently the company converts its invested capital to free cash flow, which is the amount left after all capital expenditures have been accounted for. It is an important measure because it gives us the company’s financial capacity to pay dividends, reduce debt and pursue growth opportunities. We are always looking for a positive ratio and more than 5 per cent is excellent.

Canadian ETF Industry Report: April 2019

The Canadian ETF Industry reached a new record high of $178.7-billion in assets under management at the end of April. Three new ETFs were added to the product line during the month.

APRIL ETF LAUNCHES:

With the reintroduction of the STATES Act in the United States, which would protect states’ rights to determine their own policies on marijuana and limit cannabis prohibition at the federal level, cannabis investing is at another turning point. Two ETF providers want to exploit this untapped market by introducing U.S. Marijuana ETFs.

Evolve ETFs launched the Evolve U.S. Marijuana ETF (“USMJ”). USMJ seeks to provide long-term capital appreciation by actively investing in a diversified mix of equity securities of issuers that are involved in the U.S. marijuana industry where state and local laws regulate and permit such activities. Evolve ETFs’ other marijuana-focused fund, the Evolve Marijuana Fund (“SEED”), was Canada’s Top Performing Equity ETF listed on the TSX over the past year with one year total return of 71.37%1 as of April 30, 2019.

After launching the world’s first marijuana ETF, which attracted over $920-million in assets under management, Horizons ETFs added to the suite of Cannabis-focused ETFs with the introduction of the Horizons U.S. Marijuana Index ETF (“HMUS”). HMUS seeks to replicate, to the extent possible, the performance of the U.S. Marijuana Companies Index. The underlying index is designed to provide exposure to the performance of a basket of North American publicly-listed life sciences companies having significant business activities in, or significant exposure to, the United States marijuana or hemp industries. The ETF is also available in U.S. dollar under the ticker HMUS.U.

Both the Evolve U.S. Marijuana ETF and the Horizons U.S. Marijuana Index ETF trade on Aequitas NEO Exchange.

Risk Rating of the Horizons Inovestor Canadian Equity Index ETF (“INOC”) Reduced from “Medium” to “Low to Medium”

TORONTOApril 12, 2019 /CNW/ – Horizons ETFs Management (Canada) Inc. (“Horizons ETFs“) has announced a change to the risk rating of the Horizons Inovestor Canadian Equity Index ETF (“INOC“), from “Medium” to “Low to Medium“. The change in risk rating is effective immediately.

The investment risk level of an ETF is determined in accordance with a standardized risk classification methodology, set out in National Instrument 81-102 Investment Funds, that is based on the historical volatility of the ETF, as measured by the 10-year standard deviation of the returns of the ETF. If an ETF has less than 10 years of performance history, the investment risk level of the ETF is calculated using the return history of the ETF, and, for the remainder of the 10-year period, the return history of a reference index that is expected to reasonably approximate the standard deviation of the ETF.

No changes have been made to the investment objectives or strategies of INOC as a result of the changes to the risk ratings. A summary of the risk rating classification methodology, and the investment objectives and strategies of INOC, can be found in INOC’s most recently filed prospectus.

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 $10 billion of assets under management and 86 ETFs listed on major Canadian stock exchanges. Horizons ETFs Management (Canada) Inc. is a member of the Mirae Asset Global Investments Group.

Horizons ETFs is a member of Mirae Asset Global Investments. 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 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.

SOURCE Horizons ETFs Management (Canada) Inc.

For further information: For investor inquiries: Contact Horizons ETFs at 1-866-641-5739 (toll-free) or (416) 933-5745, info@horizonsetfs.com; For media inquiries: Contact Mark Noble, Senior Vice-President, ETF Strategy, Horizons ETFs Management (Canada) Inc., (416) 640-8254, mnoble@horizonsetfs.com

Related Links

http://horizonsetfs.com/

Christian Godin Joins Inovestor Asset Management

With 25 years of experience in various senior positions including 15 years in equity management and 10 years in capital markets research, Christian brings extensive background and knowledge in equity investing. He currently oversees portfolio management activities for our Canadian equity strategy INOC:TSX. Christian holds a B.A.A. commerce from l’UQAM and a M.Sc. Finance from the HEC.

Horizons ETFs announces March 2019 distributions for certain ETFs (INOC)

TORONTO – March 22, 2019 – Horizons ETFs Management (Canada) Inc. (“Horizons ETFs”) is
pleased to announce the distribution amounts per unit (the “Distributions”) for certain of its of exchange
traded funds (the “ETFs”) for the period ending March 31, 2019, as indicated in the table below.
The ex-dividend date for the Distributions is anticipated to be March 28, 2019, for all unitholders of record
on March 29, 2019. The Distributions for units of each ETF will be paid in cash or, if the unitholder has
enrolled in the respective ETF’s dividend reinvestment plan (“DRIP”), reinvested in additional units of
the applicable ETF, on or about April 10, 2019.
Horizons ETFs has made an additional announcement regarding the March distributions for its family of
covered call ETFs in a separate press release.

 

View the Press Release

Horizons ETFs announces December 2018 distributions for certain ETFs (INOC)

TORONTODec. 20, 2018 /CNW/ – Horizons ETFs Management (Canada) Inc. (“Horizons ETFs“) is pleased to announce the distribution amounts per unit (the “Distributions“) for certain of its exchange traded funds (the “ETFs“), for the 2018 tax year end, as indicated in the table below.

Each ETF is required to distribute any net income and capital gains that they have earned in the year. All of the Distributions indicated as “Cash Distribution per Unit” in the table (the “Cash Distributions”) will be paid in cash unless the unitholder has enrolled in the dividend reinvestment plan (“DRIP”) of the respective ETF.

The annual non-cash Distributions, indicated as “Reinvested Annual Non-Cash Distributions per Unit (Est.)” in the table (the “Non-Cash Distributions”), will not be paid in cash but will be reinvested and reported as taxable Distributions and will be used to increase each unitholder’s adjusted cost base of their units of the respective ETF. The Non-Cash Distributions will be reinvested automatically in additional units of the respective ETFs and immediately consolidated so that the number of units held by the unitholder, the units outstanding of the ETFs and the net asset value of the ETFs will not change as a result of the Non-Cash Distributions. The annual Non-Cash Distribution rates in the table below are presented on an estimated basis. A press release confirming the final annual Non-Cash Distribution rates will be disseminated on or about the record date of the Distributions.

The ex-dividend date for the Distributions is anticipated to be December 28, 2018, for all unitholders of record on December 31, 2018. The Distributions for units of each ETF will be paid in cash or, if the unitholder has enrolled in the respective ETF’s dividend reinvestment plan (“DRIP”), reinvested in additional units of the applicable ETF, on or about January 11, 2019.

Horizons ETFs has made an additional announcement regarding the December distributions for its family of covered call ETFs in a separate press release.

 

View the Press Release

 

ETF Name

Ticker

Symbol

Cash

Distribution

per Unit

Annualized

Yield*

Frequency

Reinvested

Annual Non-

Cash

Distribution

per Unit

(Est.)

Horizons Blockchain Technology & Hardware Index ETF(1)

BKCH

$0.11908

0.68%

Annually

BKCH.U

$0.11908

0.68%

Annually

Horizons Global Sustainability Leaders Index ETF(2)

ETHI

$ 0.01050

0.35%

Quarterly

Horizons Active Corporate Bond ETF

HAB

$ 0.02872

3.28 %

Monthly

Horizons Seasonal Rotation ETF

HAC

Annually

$1.33911

Horizons Active Cdn Bond ETF

HAD

$ 0.02109

2.56 %

Monthly

Horizons Active Intl Developed Markets Equity ETF

HADM

$0.04488

2.01%

Quarterly

Horizons Active Global Fixed Income ETF

HAF

$ 0.02339

3.64 %

Monthly

Horizons Active Emerging Markets Dividend ETF

HAJ

$0.06248

2.01%

Quarterly

$0.11797

Horizons Active Cdn Dividend ETF

HAL

$0.12519

3.39%

Quarterly

Horizons Active US Dividend ETF(3)

HAU

$0.05879

2.03%

Quarterly

$0.08652

HAU.U

$0.05879

2.03%

Quarterly

$0.08652

Horizons Active Global Dividend ETF

HAZ

$0.11939

2.40%

Quarterly

$0.17347

Horizons China High Dividend Yield Index ETF

HCN

$0.40990

6.62%

Quarterly

$1.64109

Horizons Active Emerging Markets Bond ETF

HEMB

$ 0.03543

4.36%

Monthly

Horizons S&P/TSX 60 Equal Weight Index ETF

HEW

$0.07421

2.31%

Quarterly

Horizons Active Floating Rate Preferred Share ETF

HFP

$ 0.03014

4.41%

Monthly

Horizons Active Floating Rate Bond ETF

HFR

$ 0.02054

2.48%

Monthly

Horizons Managed Global Opportunities ETF

HGM

$0.06669

1.30%

Semi-Annual

Horizons Cdn Insider Index ETF

HII

$0.07320

2.96%

Quarterly

Horizons Marijuana Life Sciences Index ETF(4)

HMMJ

$ 0.28760

7.70%

Quarterly

HMMJ.U

$ 0.28760

7.70%

Quarterly

Horizons Active Cdn Municipal Bond ETF

HMP

$ 0.01700

2.09%

Monthly

Horizons Emerging Marijuana Growers Index ETF(5)

HMJR

$0.01168

0.84%

Horizons Canadian Midstream Oil & Gas Index ETF

HOG

$ 0.10848

5.66%

Quarterly

Horizons Active Preferred Share ETF

HPR

$ 0.03142

4.63%

Monthly

Horizons Global Risk Parity ETF

HRA

$0.06502

0.66%

Annually

Horizons Active Floating Rate Senior Loan ETF

HSL

$ 0.04155

5.32 %

Monthly

Horizons Active US Floating Rate Bond (USD) ETF(6)

HUF.U

$ 0.11758

14.13%

Monthly

HUF

$ 0.11758

14.13%

Monthly

Horizons Active High Yield Bond ETF

HYI

$ 0.05918

7.68%

Monthly

Horizons Inovestor Canadian Equity Index ETF

INOC

$ 0.04090

1.81%

Quarterly

Horizons Active A.I. Global Equity ETF

MIND

$0.03185

0.14%

Annually

Horizons Robotics and Automation Index ETF(7)

RBOT

$0.02643

0.15%

Annually

RBOT.U

$0.02643

0.15%

Annually

Nasdaq launches Nasdaq Inovestor Global Index

 

Nasdaq launches Nasdaq Inovestor Global Index 

Due to your constant support with regards to the INOC ETF, the Inovestor team is proud to announce the launch of the Nasdaq Inovestor Global Index (NQIGLO) which will be replicating the strategy used in our US and ADR model portfolios. The index is composed of 50 stocks, half of the holdings are US and the rest are international.

Due to the launch of the INOC ETF and the NQIGLO index, we are implementing a conflict of interest policy in relation to our various customers, suppliers and partners. We will now announce trades in our portfolios on the second Friday of the month after markets close.
For more details on the rebalancements, do not hesitate to refer to this article in our support platform.

Dates for the upcoming rebalancements:

US and ADR portfolios 9/03/2018
Canadian portfolio 13/04/2018

For more information, please do not hesitate to contact us at service@inovestor.com or by phone on 514-287-0011 ext. 2, it will be a pleasure to respond to your questions.

The Inovestor Team