Low-cost Horizons S&P/TSX 60 Index ETF hits C$1 billion in assets

Feb 18th, 2013 | By | Category: ETF and Index News

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Canada’s lowest cost ETF, the Horizons S&P/TSX 60 Index ETF (HXT), has joined the select few of Canadian ETFs that have surpassed C$1 billion in assets under management.

Low-cost Horizons S&P/TSX 60 Index ETF hits C$1 billion in assets

Howard Atkinson, CEO of Horizons ETFs.

Launched by Horizons ETFs in September 2010, the fund seeks to replicate the performance of the S&P/TSX 60 Index (TR), an index comprising 60 of the largest Canadian publicly traded companies by market capitalisation listed on the Toronto Stock Exchange (TSX).

The S&P/TSX 60 accounts for approximately 64% of Canada’s total equity market capitalisation and is the most widely followed gauge of Canadian blue-chip stocks.

The annual management fee of the fund is currently a mere 0.05%. This was reduced, by way of a rebate, from 0.07% in October last year, making it less than half the cost of the next cheapest S&P/TSX 60 Index ETF in Canada. All else being equal, a lower management fee should lead to higher returns and enhance a fund’s ability to track the returns of its underlying index.

Since the fee rebate was announced, the fund has gathered more than C$600 million in additional assets, more than doubling its size while average daily trading volume has also increased to almost 1 million units.

Howard Atkinson, CEO of Horizons ETFs, said: “The announcement of our fee rebate in October coincided with the two-year anniversary of HXT. Not only does Canada’s lowest cost ETF have a lower management fee and a tax efficient structure, it also has a top-ranked track record of performance in its category. The combination of these factors has really put HXT on the radar screen of Canadian investors and brought substantial inflows into the ETF.”

Mr Atkinson added: “The S&P/TSX 60 Index is the premier large cap Canadian equity benchmark used by Canadian index investors. Achieving $1 billion in assets is an important milestone for HXT, providing it with more than enough size to support inflows from larger institutional investors. We expect that this latest milestone is just the beginning of strong sales for HXT in 2013 and beyond.”

The fund is listed on the TSX.

For investors looking for an income play on the S&P/TSX 60 Index, Horizons also offers an actively managed covered call strategy version of the fund: the Horizons Active S&P/TSX 60 Index Covered Call ETF (HAX). Launched last month, the fund aims to provide investors with exposure to the performance of the S&P/TSX 60 Index together with mitigated downside risk and monthly distributions of dividend and call option income.

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