HSUV.U provides a savings vehicle for U.S. dollars that
offers daily liquidity and a competitive interest rate
TORONTO, July 2, 2020 /CNW/ - Horizons ETFs
Management (Canada) Inc.
("Horizons ETFs" or the "Manager") is pleased to
announce the launch of its newest ETF the Horizons USD Cash
Maximizer ETF ("HSUV.U"). Shares of the ETF will begin
trading today on the Toronto Stock Exchange ("TSX") under
the ticker HSUV.U.
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, although
the value of any interest earned will be reflected in the net asset
value ("NAV") of the ETF.
Similar to the Horizons Cash Maximizer ETF ("HSAV")
launched in February 2020, HSUV.U
provides investors with an ETF-based alternative to traditional
savings vehicles, like GICs and high-interest savings accounts,
although neither HSAV nor HSUV.U are covered by the Canada Deposit
Insurance Corporation or any other government deposit insurer. As
an ETF, HSUV.U provides daily liquidity for U.S. dollar-denominated
cash holdings, while offering an interest rate that is expected to
be competitive with other high-interest savings vehicles.
"Following the success of HSAV, we received significant
demand for a U.S. dollar version," said Steve Hawkins, President and CEO of Horizons
ETFs. "Many Canadians have significant U.S. cash holdings.
Whether they are business owners with U.S. clients or snowbirds
with property in the U.S, there is a large need for U.S. cash
savings vehicles. HSUV.U provides investors with exposure to a cash
alternative, denominated in the world's most popular currency, with
daily liquidity, an interest rate that is competitive with other
high-interest savings vehicles, and potential tax efficiency, if
the ETF is held in a taxable account."
HSUV.U is a class of shares in a corporate class structure that
allows the ETF to deliver its returns in a tax-efficient manner.
With this structure, the ETF will receive interest income in U.S.
dollars on its cash deposits and that value will be reflected in
the daily NAV of the ETF. However, investors in HSUV.U are not
expected to receive any taxable distributions from the ETF.
"As HSUV.U is not expected to pay out any distributions, this
could significantly enhance the after-tax benefits of owning HSUV.U
in a taxable account, particularly if interest rates increase,
which would create a greater amount of taxable income," said
Mr. Hawkins.
HSUV.U has closed its initial offering of shares and will begin
trading today on the TSX when the market opens this morning.
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 over $13 billion of assets
under management and 92 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 USD Cash Maximizer ETF ("HSUV.U") does not track
a traditional benchmark but rather a compounding rate of interest
paid on a cash deposit that can change over time. Any distributions
which are received by HSUV.U are reflected automatically in the net
asset value (NAV) of HSUV.U. As a result, the shareholders of
HSUV.U are not expected to receive any taxable
distributions.
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.
During a period of suspended subscriptions, if any, investors
should note that ETF shares of HSUV.U would be expected to trade at
a premium or substantial premium to the NAV per ETF Share of
HSUV.U. During such periods, investors are strongly discouraged
from purchasing ETF shares of HSUV.U on a stock exchange. Any
suspension of subscriptions or resumption of subscriptions 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.
