The strategy consisting primarily of equity TRI ETFs is designed to appeal to growth-seeking investors
Horizons ETFs Management (Canada) has launched an all-equity ETF of ETFs as the third offering in its line-up of one-ticket-solution ETFs.
Trading under the ticker symbol HGRO on the TSX, the Horizons Growth TRI ETF Portfolio joins two previously-launched solutions: the Horizons Conservative TRI ETF Portfolio (HCON) and the Horizons Balanced ETF Portfolio (HBAL).
HGRO pursues long-term capital growth by investing primarily in equity TRI (total return index) ETFs. To maintain a consistent level of risk from developed countries around the world, portfolio rebalancing will be performed on a semi-annual basis, with a long-term asset allocation of at least 99% equity securities targeted at the time of any rebalance.
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The equity components will only consist of TRI ETFs that offer exposure to North American and other global equities. The portfolio will seek a “world” equity return, with generally no less than 15% of HGRO’s portfolio being exposed to Canadian equity securities at each semi-annual rebalance.
“While mutual funds may have historically dominated the one-ticket-solution investing space, commonly referred to as balanced funds or fund-of-funds, today's Canadian marketplace is seeing significant demand from retail and institutional investors for one-ticket ETF solutions,” Horizons ETFs President and CEO Steve Hawkins said.
“HGRO is an equity-focused ETF that provides broad global equity exposure, with the added benefits of using our TRI ETFs, which have low index replication tracking error in a low fee structure,” he added.
As with HCON and HBAL, investors will not be subject to any direct management fees or operating costs from HGRO. They will, however, indirectly pay the management fees and trading expenses of the TRI ETFs held by HGRO.
The anticipated total management expense ratio for HGRO is 0.17%, based on the historical MER of the portfolio of TRI ETFs it holds; the total MER is not anticipated to exceed 0.19% at any rebalance.
Based on the historical trading expense ratio of TRI ETFs currently held by HGRO, the underlying portfolio of TRI ETFs is expected to have an aggregate trading expense ratio of 0.28%. However, since trading expense ratios include expenses outside the control of Horizons ETFs, the trading expense ratio of HGRO’s underlying portfolio of TRI ETFs is subject to change.
