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Horizons ETFs launches Canadian Utility Services high dividend ETF

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Horizons ETFs Management (Canada) Inc has announced the launch of the Horizons Canadian Utility Services High Dividend Index ETF (“UTIL” or the “ETF”). Units of the ETF are trading on the Toronto Stock Exchange (“TSX”) under the ticker symbol UTIL.

Horizons ETFs Management (Canada) Inc has announced the upcoming launch of the Horizons Canadian Utility Services High Dividend Index ETF (“UTIL” or the “ETF”). Units of the ETF are trading on the Toronto Stock Exchange (“TSX”) under the ticker symbol UTIL.

Horizon writes that with UTIL, investors can gain Canadian exposure to three major segments of the utility services sector: utilities, pipelines and telecommunications. These segments have historically functioned as defensive industries, offering investors relative stability and consistent dividends, even during periods of volatility and bear markets.

 

“With rising inflation, investors are increasingly looking towards dividend and yield-focused strategies to outpace costs and stay ahead in their portfolios. However, with the spectre of a potential recession on the horizon, investors are also looking for these income-producing mandates to provide some protection from a broader market decline,” says Steve Hawkins, President and CEO of Horizons ETFs. “Traditionally, utility services have been regarded as a relatively defensive sector of the stock market, as their services – including electricity, oil and internet – are always necessary.”

 

UTIL seeks to replicate, to the extent possible, the performance of an index that seeks to provide exposure to the performance of TSX-listed high dividend paying utility services companies. Currently, UTIL seeks to replicate the performance of the Solactive Canadian Utility Services High Dividend Index (the “Index”), net of expenses.

 

The Index is designed to provide exposure to TSX-listed high dividend paying utility services companies. In order to be eligible for inclusion in the Index, a company will be classified as primarily operating in one of the following index categories: “Utilities,” “Pipelines,” or “Telecommunications”. 

 

Index constituent issuers will be drawn from publicly listed companies headquartered in Canada, and may include small, mid, and large-capitalization companies. Companies must also meet a minimum yield requirement to be eligible for inclusion in the Index. The Index is rebalanced to equal-weighted on a semi-annual basis.

 

“UTIL goes beyond traditional utility strategies as the ETF portfolio provides exposure to critical utility services in the energy pipeline and telecommunications sector,” says Hawkins. “Historically, the utility services sector has offered a higher level of dividend income than the broader S&P/TSX Composite. Not only do we think this expansion beyond traditional utilities improves diversification for investors but it might also improve the income generated by the ETF.”

 

 

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