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Horizons ETFs changes name of Active Advantage Yield ETF


Horizons ETFs Management and its affiliate AlphaPro Management are to change the name of the Horizons Active Advantage Yield ETF (HAF) to the Horizons Active Yield Matched Duration ETF.

This name change is intended to emphasize the risk-mitigation strategy employed by the ETF to attempt to limit the negative impact that future interest rate increases could have on the value of the ETF.
The name change is expected to take effect on 6 September 2013.
HAF’s investment objective and sub-advisor, Fiera Capital Corporation, will remain the same.
Fiera’s risk-mitigation strategy seeks to match HAF’s yield with its duration. Generally speaking, an interest rate increase of one per cent can be expected to cause a one per cent decline in the value of a fixed income security for every year of its duration (a measure of the interest rate sensitivity of a fixed income security). By matching duration with yield, HAF aims to mitigate the negative effects of interest rate increases. This strategy complements Fiera’s process of selecting fixed income securities based on independent economic, interest rate and credit rating analyses to determine which securities offer the best risk-adjusted return potential.
"HAF is an attractive ETF for investors looking for a low-cost, actively managed global fixed income solution. Fiera is one of the largest fixed income managers in Canada, and its tactical fixed income team has extensive experience in identifying compelling yield opportunities around the world," says Howard Atkinson (pictured), president of Horizons ETFs.
"Many investors want to maintain an allocation to bonds, but being a bond investor today has rarely been riskier. With interest rates near historic lows, investors are forced to stretch for yield, which could heighten portfolio risk if rates suddenly rise, as they did in June, causing losses in most Canadian fixed income ETFs. The yield/duration matching strategy that HAF employs adds another layer of risk-mitigation."
In addition to the name change, HAF’s fee structure will also change. On and after 1 September 2013, the ETF will pay revised management fees, calculated and accrued daily and payable monthly in arrears, to the manager equal to: (a) 0.45 per cent of the net asset value of the Class E units of the ETF; and (b) 0.95 per cent of the net asset value of the Advisor Class units of the ETF, in each case together with applicable sales tax. The aggregate management fees that the manager receives in respect of HAF will not change as a result of this new fee structure.
Additionally, until 31 March 2013, the manager was entitled to receive a performance fee. Effective 31 March 2013, the performance fee was removed.

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