The reduced management fees are said to make two low-cost ETFs even more competitive against rival products
Horizons ETFs has reduced the management fee on the Horizons S&P/TSX Capped Energy Index ETF (HXE) and the Horizons S&P/TSX Capped Financials Index ETF (HXF), lowering the fee for each ETF from 0.35% to 0.25%.
“HXE and HXF were already the lowest-cost ETFs in Canada offering exposure to the S&P/TSX Capped Energy Index and S&P/TSX Capped Financials Index, respectively,” said Horizons ETFs President and Co-CEO Steve Hawkins. “Now with management fees of only 25 basis points, these two ETFs are less than half the cost of the leading competitor ETFs that track these same or similar indices.”
According to Hawkins, passive ETFs typically will not get the same returns as the index they track. Therefore, fees should play a bigger part in determining how well a passive ETF performs compared to the index it tracks, as well as other ETFs that replicate the same index.
The two ETFs also reportedly use Horizons’ total-return index (TRI) structure. With a synthetic replication structure, they provide unitholders with tax-efficient exposure to the total returns of their respective indices. The funds also have less potential for tracking error due to the absence of portfolio trading costs.
Hawkins notes that energy and financials are the two largest sectors in Canada’s equities market, making HXE and HXF even more attractive for investors who want exposure to those spaces.
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“HXE and HXF were already the lowest-cost ETFs in Canada offering exposure to the S&P/TSX Capped Energy Index and S&P/TSX Capped Financials Index, respectively,” said Horizons ETFs President and Co-CEO Steve Hawkins. “Now with management fees of only 25 basis points, these two ETFs are less than half the cost of the leading competitor ETFs that track these same or similar indices.”
According to Hawkins, passive ETFs typically will not get the same returns as the index they track. Therefore, fees should play a bigger part in determining how well a passive ETF performs compared to the index it tracks, as well as other ETFs that replicate the same index.
The two ETFs also reportedly use Horizons’ total-return index (TRI) structure. With a synthetic replication structure, they provide unitholders with tax-efficient exposure to the total returns of their respective indices. The funds also have less potential for tracking error due to the absence of portfolio trading costs.
Hawkins notes that energy and financials are the two largest sectors in Canada’s equities market, making HXE and HXF even more attractive for investors who want exposure to those spaces.
Related stories:
Dynamic Funds announces fee and payment option updates
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