Horizons ETFs launches actively managed global currency ETF

Jul 21st, 2016 | By | Category: Alternatives / Multi-Asset

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Canadian exchange-traded fund provider Horizons ETFs has launched the Horizons Global Currency Opportunities ETF (Toronto: HGC), an actively managed fund providing exposure to worldwide currency markets, to help Canadian investors better diversify their investments.

Horizons ETFs launch actively managed fund targeting global currency opportunities

Steve Hawkins, Co-CEO, Horizons ETFs.

The ETF is sub-advised by CIBC Asset Management, one of Canada’s largest asset managers with over $26bn in currency-related assets, as of 30 June, 2016.

Steve Hawkins, Co-CEO, Horizons ETFs, said: “With one of the largest currency investment teams in North America, by AUM, we chose to partner with CIBC Asset Management on this ETF because of their diligent approach to selecting currency investments that have the potential for greater returns, without adding excess risk… A professionally managed currency ETF can be a great diversifier for Canadian investors, as long as the opportunities don’t come with undue risk.”

David Scandiffio, President & CEO, CIBC Asset Management, added: “We are pleased to be selected to sub-advise the Horizons Global Currency Opportunities ETF…. As a global leader in the currency management field, we have been working with institutional investors for over 20 years to create sophisticated currency management solutions. We are thrilled to bring our institutional currency capabilities to retail investors through Horizons ETFs.”

The fund provides investors with long exposure to the global currency markets through an actively-managed strategy that holds Canadian short-term securities and uses financial instruments to gain exposure to selected global currencies. It involves ranking 32 currencies worldwide using both quantitative and qualitative processes by assessing fundamental country research and macro-economic regimes.

In order to ensure adequate diversification and minimise risk, portfolio exposure limits have been established for the fund and are monitored daily. For example, the fund will limit its exposure to more volatile currencies, regardless of their outlook.

“The $5.3tn currency market is one of the largest asset classes in the world and, as we’ve seen clearly over the last two years, foreign exchange has the potential to significantly impact returns,” added Hawkins. “We are now offering Canadian investors access to this market with the launch of HGC, an investment solution that can further diversify their portfolio with the potential to improve overall risk-adjusted returns.”

The fund has a total expense ratio of 0.55%.

UK-based investors wishing to establish tactical positions on currency pairings may consider an extensive suite of exchange-traded currencies provided by ETF Securities. The range include all permutations of currency pairings between the G10 currencies (the most heavily traded currencies in the world including the US dollar, the euro, the British pound, the Japanese yen, the Swedish krona, the Norwegian krone, the Australian dollar, the New Zealand dollar, the Swiss franc and the Canadian dollar. There are also ETCs offering exposure to the Chinese Renminbi or the Indian rupee vs the US dollar.

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