Horizons, a leading Canadian exchange-traded fund issuer, has announced the launch of the Horizons Managed Global Opportunities ETF (HGM) on the Toronto Stock Exchange.

Howard Atkinson, President of Horizons ETFs.

Actively managed by British Columbia-based Forstrong Global Asset Management, the fund uses flexible tactical allocation among several global asset classes to seek long-term investment returns. It trades in Canadian dollars but primarily invests in US-listed ETFs.

Although the size of Canadian equities and fixed income markets represent only 3% and 2% of world market capitalisation respectively, recent research from Forstrong suggests that Canadian investors typically have over half their portfolios invested within Canada.

“Historically, Canadian investors have displayed a strong ‘home bias’ towards domestic asset classes; while patriotic, they have high concentration risk, especially in the financial and energy sectors that make up over half of domestic indices,” said Howard Atkinson, President of Horizons ETFs. “The potential benefits of Horizons Managed Global Opportunities ETF are that it adds to the global diversification of one’s portfolio, and offers a risk-based approach to managing asset allocation.”

“Forstrong Global has the longest track-record in the world managing ETF-only portfolios and has built a stellar reputation both within and outside Canada,” added Atkinson. “When it comes to investing outside of Canada, we feel that Canadian investors want professional expertise and insight – through a single efficient investment – but don’t know where to start. Horizons Managed Global Opportunities ETF really blends the best of both worlds, by giving these investors access to a low-cost portfolio of primarily index-replicating ETFs overseen by a portfolio management team with extensive global investment expertise.”

This ETF invests in equity, fixed income, currency and gold ETFs. A top-down approach is employed by the fund’s portfolio management team who firstly assess the five-year macro-economic outlook of global production. This is paired with an analysis of shorter-term trends (generally under a year) which are expected to affect the values of potential tactical allocations. The managers then select asset types and potential ETFs that are in line with the analysis of prevailing themes and events. Finally, the managers take a currency view by leaving open certain currency exposures within their allocation, while hedging others.

The total expense ratio of the fund is 0.85%.