Horizons launches international equity ETF for non-registered accounts

Morningstar Canada 27 September, 2017 | 5:00PM

Horizons Intl Developed Markets Equity Index (HXDM), which opened for trading today on the Toronto Stock Exchange, is designed to deliver an index-like total return while avoiding making distributions.

Since the ETF tracks a total-return index, the value of any dividends is reinvested daily into the value of the index. Like other similar derivatives-based exchange-traded funds in the Horizons family, it's designed for investors in non-registered accounts who do not want to receive distributions.

The ETF will seek to replicate the performance, net of expenses, of the Horizons EAFE Future Roll Index. This reflects the returns generated over time of notional investments that represent a long position in a series of futures contracts on the MSCI Europe Australasia Far East (EAFE) index. In doing so, the ETF will provide market-cap-weighted exposure to large- and mid-cap stocks in 21 developed markets.

The management fee charged by Horizons ETFs Management (Canada) Inc. is 0.2%, not including fund expenses. In addition, the ETF will be charged a swap fee of 0.30% a year, payable to a counterparty. According to the prospectus, the swap fee can be up to 0.35%.

The ETF is also available in U.S.-dollar-denominated units (HXDM.U).

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