Horizons launches actively managed international dividend ETF

Oct 26th, 2017 | By | Category: Equities

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Horizons ETFs has launched the Horizons Active Intl Developed Markets Equity ETF (HADM) on the Toronto Stock Exchange. The fund is actively managed and provides exposure to international stocks excluding North America using a dividend-focused strategy.

Horizons launches active equity dividend ex-North America ETF

Steven Hawkins, president and Co-CEO of Horizons ETFs.

Steve Hawkins, president and co-CEO of Horizons ETFs, commented: “So far in 2017, international developed market equity exposed ETFs have had four times the amount of inflows as domestic equity ETFs – with most of these inflows in passive index tracking ETFs. Now that Canadians are so aggressively investing outside of Canada using ETFs, we felt it was very important to give them access to an active ETF strategy, focusing on dividend stocks in the Europe, Australasia and Far East regions.”

HADM seeks to provide long-term returns consisting of regular dividend income and modest long-term capital growth by investing in high-quality, dividend-paying companies outside North America. The fund may also hedge some or all of its non-Canadian dollar exposure back to the Canadian dollar.

The fund is sub-advised by the systematic equities group from Guardian Capital, and uses a proprietary stock selection process that targets dividend-paying stocks which offer a combination of dividend growth, payout and sustainability.

The selection model targets a diversified set of stocks with different growth and yield characteristics, which range from Dividend Achievers to Dividend Growers to Dividend Payers. Dividend Achievers are high-growth, early stage companies with low dividend yields; Dividend Growers are steady growth companies with moderate yields; and Dividend Payers are mature, low-growth companies that provide high dividend yields.

Srikanth Iyer, managing director, Guardian Capital, said: “Developed markets outside of North America have an incredibly vast amount of issuers, so it’s tough for investors to develop a focused yield strategy on their own. We believe that the combination of discretionary management and quantitative screens that HADM leverages will help investors reach the full yield potential of these large international developed markets.”

“Our partnership with Guardian Capital continues to grow as investors seek out options, beyond high-cost mutual funds or simple passive ETF index strategies, to gain access to international dividend stocks,” added Hawkins. “With Guardian Capital sub-advising HADM, we believe investors are benefitting in several ways: they’re getting world-class discretionary management and access to a difficult-to-reach area of the capital markets in a low-cost ETF structure.”

The fund has a management fee of 0.80%.

HADM is the fifth ETF from horizons that is sub-advised by Guardian Capital, adding to its dividend-focused range currently covering global, Canadian, US and emerging market equities. The largest of these is the Horizons Active Global Dividend ETF (TSX: HAZ) which was launched in July 2010. HAZ has CAD 245 million in assets and an annual management fee of 0.80%.

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