Horizons launches actively managed international equity ETF

Rudy Luukko 25 October, 2017 | 5:00PM

Horizons Active Intl Developed Markets Equity (symbol: HADM), managed by the systematic-equities team at Guardian Capital LP, opened for trading today on the Toronto Stock Exchange.

The ETF's objective is to generate regular income and modest long-term capital growth by investing in high-quality, dividend-paying companies domiciled in the Europe, Australasia and Far East (EAFE) countries. The management fee, not including expenses charged to the ETF, is 0.80%.

Using a proprietary stock-selection process, Guardian Capital will seek to identify large- and mid-cap companies that demonstrate a consistent pattern of sustainable or growing dividends. The process diversifies the portfolio among companies that Guardian identifies as either dividend achievers, dividend growers or dividend payers.

Dividend achievers are high-growth, early-stage companies with low dividend yields. Dividend growers are steady growth companies with moderate yields, and dividend payers are mature, low-growth companies with high dividend yields.

According to the prospectus, the managers may also engage in limited short-selling. As well, at the managers' discretion, some or all of the ETF's foreign-currency exposure may be hedged back to the Canadian dollar.

The ETF's co-lead managers are Srikanth Iyer, managing director and head of systematic strategies, and Fiona Wilson. "We believe that the combination of discretionary management and quantitative screens that HADM leverages will help investors reach the full yield potential of these large international developed markets," Iyer said in a release issued by Horizons ETFs Management (Canada) Inc.

The new ETF is the fifth in the Horizons ETF family that is sub-advised by Toronto-based Guardian Capital, joining dividend-oriented equity mandates covering global, Canadian, U.S. and emerging-market equities.

About Author

Rudy Luukko

Rudy Luukko  Rudy Luukko is a freelance writer who contributes to Morningstar.ca on topics involving fund industry trends and regulatory issues. He retired in May 2018 from his position as editor, investment and personal finance, at Morningstar Canada, where he had worked since 2004. He has also worked as an editor and writer for various general, specialty and institutional media, and he has co-authored courses for the Canadian Securities Institute. Follow Rudy on Twitter: @RudyLuukko.