Horizons ETFs Management (Canada) Inc. has introduced two new currency hedged exchange-traded funds (ETFs) — Horizons S&P 500 CAD Hedged Index ETF and Horizons US 7-10 Year Treasury Bond CAD Hedged ETF — that began trading on the Toronto Stock Exchange on Tuesday.
Horizons S&P 500 CAD Hedged Index ETF seeks to replicate, to the extent possible, the performance, net of expenses, of the S&P 500 CAD hedged index (total return), which is designed to measure the performance of the large-cap segment of the U.S. equity market, hedged to the Canadian dollar.
Horizons S&P 500 CAD Hedged Index ETF complements Horizons S&P 500 ETF, which provides non-hedged exposure to the S&P 500 Index (Total Return).
Meanwhile, Horizons US 7-10 Year Treasury Bond CAD Hedged ETF seeks to replicate, to the extent possible, the performance, net of expenses, of the Solactive US 7-10 year treasury bond CAD hedged index (total return), which is designed to measure the performance of the US 7-10 Year Treasury Bond market, hedged to the Canadian dollar.
Horizons US 7-10 Year Treasury Bond CAD Hedged ETF complements the Horizons US 7-10 Year Treasury Bond ETF, which provides non-hedged exposure to U.S. 7-10 Year Treasury Bonds.
“At Horizons, we have historically been of the view that having non-hedged exposure to U.S. securities markets can be more beneficial than currency hedging over the long term, given the diversification benefits of having direct exposure to the U.S. dollar, and the fact that currency hedging can add additional portfolio management costs,” says Steve Hawkins, president and co-CEO of Horizons ETFs, in statement.
“However, we also recognize that there are many investors who are averse to foreign currency exposure, and even more investors who want the ability to dynamically allocate between hedged and non-hedged versions of U.S. securities ETFs, in order to take advantage of currency fluctuations between the Canadian and U.S. dollars. [These new ETFs] have been launched specifically to meet this demand,” he adds
Horizons S&P 500 CAD Hedged Index ETF and Horizons US 7-10 Year Treasury Bond CAD Hedged ETF join Horizons ETFs’ suite of low-cost, tax-efficient total return index ETFs, which are index-replicating investments that use a synthetic replication structure to receive the pre-tax total return of an index.
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