Horizons ETFs Management has launched the Horizons Equal Weight Canada REIT Index ETF (HCRE) and the Horizons Equal Weight Canada Banks Index ETF (HEWB).
Units of the ETFs are now trading today on the Toronto Stock Exchange (TSX).
HCRE and HEWB join the Horizons Total Return Index ETF (Horizons TRI ETFs) suite. Horizons TRI ETFs use an ‘total return swap’ investment structure designed to deliver returns in a low-cost and tax-efficient manner. The additions of HCRE and HEWB brings the Horizons TRI ETF suite to a total of 14 ETFs, with one more set to launch in February.
“Since introducing our first TRI ETF in 2010, the Horizons TRI ETF suite has continued to grow, providing investors with tax-advantaged access to an increasing variety of important index strategies from around the world,” says Steve Hawkins, President and CEO of Horizons ETFs. “The additions of HCRE and HEWB are made-in-Canada ETFs that provide access to two investing themes popular with Canadians: real estate and Canadian banks.”
Both HCRE and HEWB’s indices utilise an equal-weight methodology, which provides exposure to each index constituent equally when rebalanced. This provides exposure to a more diversified representation of the sector’s performance, as opposed to the more concentrated exposure of a market-capitalisation methodology.
HCRE seeks to replicate, to the extent possible, the performance of the Solactive Equal Weight Canada REIT Index (Total Return), net of expenses. This index is an equal-weight index of Canadian-listed real estate investment trust (REIT) equity securities.
REITs are publicly traded companies that invest predominantly in income-producing real estate assets. By investing through REITs, investors can gain exposure to the holdings of large real estate owners and earn a share of their rental income.
HEWB seeks to replicate, to the extent possible, the performance of the Solactive Equal Weight Canada Banks Index (Total Return), net of expenses. This index is an equal-weight index of equity securities of diversified Canadian banks.
HEWB will initially provide exposure to Canada’s six largest banks; commonly referred to as the “Big Six”. These include: Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), Bank of Nova Scotia (Scotiabank), Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC) and National Bank of Canada (National Bank).
“While similar strategies exist amongst current ETF listings in Canada, HCRE and HEWB are the only ETFs that seek to achieve their investment objectives using our tax-efficient total return swap structure,” says Hawkins.
HCRE and HEWB have closed their initial offering of units and will begin trading today on the TSX when the market opens this morning.