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Horizons ETFs launches Canada’s lowest cost dividend ETF


Horizons ETFs Management has launched the Horizons Cdn High Dividend Index ETF (HXH), which will provide investors with low-cost, tax-efficient exposure to high dividend paying Canadian companies.

Units of the exchange traded fund (ETF) have begun trading on the Toronto Stock Exchange (TSX) in Canadian dollars under the ticker symbol HXH.

HXH seeks to replicate the performance of the Solactive Canadian High Dividend Yield Index (Total Return) – (the Index) – net of expenses. The Index tracks the performance of 40 of the largest dividend-yielding companies traded on the TSX that have a minimum market capitalisation of over USD4 billion.

HXH is the first Canadian ETF to use Horizons ETFs' innovative total return index (TRI) structure to provide tax-efficient exposure to Canadian large-cap dividend paying stocks. Additionally, with a management fee of just 0.10 per cent, HXH is the lowest cost, Canadian dividend ETF listed in Canada.

"Canada has a lot of great dividend paying companies, particularly in the financial and energy sectors," says Steve Hawkins, Co-CEO, Horizons ETFs. "Using our innovative TRI structure, HXH investors can now receive the total return of Canada's high dividend paying companies creating the potential for greater compounded after-tax returns."

HXH is a part of Horizons ETFs' suite of low-cost, tax-efficient TRI ETFs, which also includes the Horizons S&P/TSX 60 Index ETF (HXT:TSX), the largest ETF offered by Horizons ETFs in terms of assets under management, and the Horizons S&P 500 Index ETF.

TRI ETFs are low-cost, index-replicating ETFs that use a synthetic replication structure to receive the pre-tax total return of an index. Unlike physically-replicated ETFs, no distributions are expected to be paid by the ETF; this leads to greater tax efficiency for investors who hold the ETF in non-registered investment accounts. Instead, the value of the dividend or interest income is reflected in the returns of the ETF. In addition, tracking error is also reduced in TRI ETFs since there are no portfolio trading costs.

HXH has closed the offering of its initial units and it will begin trading on the TSX when the market opens this morning.

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