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Horizons Gold Yield Fund re-opened for investment

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Jovian Capital Corporation’s subsidiary AlphaPro Management Inc (AlphaPro), manager of the Horizons AlphaPro exchange-traded funds, has filed a preliminary short form prospectus for a public offering of additional units of Horizons Gold Yield Fund.

 

The offering is expected to close on or about April 1, 2011. The offering comprises Class A and Class F Units. The initial public offering of the fund closed in December 2010 and, together with the exercise of the over-allotment option, approximately 5.25 million Units were issued for gross proceeds of approximately of USD52.5 million. The Class A units of the fund are listed for trading on the Toronto Stock Exchange (TSX) under the symbol HGY.UN.

The fund’s investment objectives are to provide holders of Units with: exposure to the price of gold bullion hedged to the Canadian dollar, less the fund’s fees and expenses; and tax-efficient monthly distributions. The targeted monthly distribution rate for the second quarter of 2011 is USD0.0542 per Unit (USD0.65 per annum). This expected rate will be applicable to the distributions declared in April, May and June 2011. It is expected that monthly distributions received by investors will consist primarily of return of capital.

The fund was created to offer investors a low cost exposure to the price of gold bullion, while providing monthly tax-efficient distributions. The fund seeks to achieve its investment objectives by gaining exposure to a portfolio consisting of securities and other instruments that provide exposure to the price of gold bullion (the Gold Portfolio). The Gold Portfolio is managed by JovInvestment Management Inc (the Portfolio Manager).  The Portfolio Manager writes at-the-money covered call options on approximately, and not more than, 33% of the securities in the Gold Portfolio. The Gold Portfolio does not employ leverage.

To enhance overall liquidity, the fund is expected to convert automatically into an exchange traded fund by no later than July 31, 2012.

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