Horizons ETFs launches US dollar share class for Active US Dividend ETF

Feb 26th, 2016 | By | Category: ETF and Index News

Canadian exchange traded fund provider Horizons ETFs has launched a US dollar version of its Horizons Active US Dividend ETF (HAU) on the Toronto Stock Exchange. The launch coincides with the one-year anniversary of HAU’s initial launch in Canadian dollars.

The actively managed fund provides regular dividend income and modest long-term capital growth by investing in high quality US dividend paying stocks. Sub-advised by Guardian Capital, the ETF uses Guardian’s proprietary stock selection process in an effort to outperform the fund’s benchmark – the S&P 500 Index.

Horizons ETFs launches US dollar share class for Active US Dividend ETF

The Horizons Active US Dividend ETF focuses on three key fundamentals: growth of dividends, payout of cash flow, and sustainability of the payout profile.

“We know that currency is an important consideration when investing outside of Canada, particularly in the US,” said Steve Hawkins, Co-CEO of Horizons ETFs (Canada). “With the significant depreciation of the Canadian dollar against the greenback, we believe it’s important to offer this flexibility to investors who may want to optimize their US stock exposure by choosing to purchase units of the ETF in US dollars.”

Guardian’s investment approach focuses on three key fundamentals: growth of dividends, payout of cash flow, and sustainability of the payout profile. Using a research-driven methodology, Guardian Capital categorizes dividend-paying stocks into three groups: dividend achievers (high growth, early stage companies with low dividend yields), dividend growers (steady growth companies with moderate yields), and dividend payers (mature, low growth companies that provide high dividend yields).

By combining the up-front dividend yield with dividend growth, the fund seeks to capture opportunities across the growth spectrum, from lower-yielding high-growth companies in sectors such as technology to mature, slower-growing companies like utilities and telecoms.

“A common problem with many dividend strategies is that price appreciation is sacrificed in the search for higher dividend yields,” notes Hawkins. “In Guardian’s GPS approach, both are equally as important in stock selection, which is why we view HAU and our other dividend mandates as total-return strategies.

“With a focus on both price appreciation and dividends, HAU provides diverse sector exposure that is more similar to that of a broad-based US equity mandate rather than other dividend mandates, which tend to have big concentrations in yield-rich sectors like utilities.”

As of 31 January 2016, the fund had major sector exposures to the health care (23.8%), consumer staples (20.8%), industrials (11.7%), and financial services (10.2%) sectors. The fund has a management fee of 0.70%.

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