Horizons launches two corporate bond ETFs

Horizons Exchange Traded Funds and AlphaPro Management have announced the launch of two new corporate debt based ETFs; the Horizons High Yield Bond ETF and the Horizons U.S. Floating Rate Bond ETF.

Natcan Investment Management will actively manage the portfolios of both ETFs, which began trading on the TSX this morning in both Class E and Advisor Class units.

“These two ETFs further enhance our partnership with Natcan’s fixed income team,” said Howard Atkinson, CEO of Horizons ETFs, “Our firm believes that a low-cost and actively managed strategy can deliver better performance than a passive indexing strategy, and also that an active strategy can overcome many of the limitations found with index replication in these asset classes.”

These two new ETFs will be the fifth and sixth income-focused mandates that Natcan sub-advises for Horizons ETFs.

The High Yield ETF is expected to provide unitholders with high total return income, as well as monthly distributions. The fund invests in high-yield debt securities of North American companies, and may also invest in convertible debentures, preferred shares and mortgage-backed securities.

Horizons anticipates that the U.S. Floating Rate Bond ETF will generate income consistent with current U.S. short-term corporate bond yields.

It primarily invests in U.S. corporate debt securities, and will hedge the portfolio’s U.S. interest rate risk by maintaining portfolio duration of less than two years. The bond may also invest in U.S. government debt securities, as well as debt securities of non-U.S. companies.

Staff

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