Horizons’ robotics ETF lowers fees and adopts new mandate

Jul 4th, 2018 | By | Category: Equities

Horizons ETFs (Canada) has cut the fees charged on its Horizons Robotics and Automation Index ETF as well as updated the fund’s investment objective, underlying index and ticker symbol.

robotics etfs horizons etfs canada

Effective immediately, the Horizons Robotics and Automation Index ETF has reduced its management fee from 0.75% to 0.68%.

Effective immediately, the ETF’s management fee will be reduced from 0.75% to 0.68%.

The ETF will also cease tracking the ROBO Global Robotics and Automation Index and will begin to replicate the performance of the Indxx Global Robotics & Artificial Intelligence Thematic Index.

Both indices have a global developed market scope in their security selection. The former index tracks firms with revenue streams closely linked to the themes of robotics and automation, while the new index drops the automation component in favour of artificial intelligence.

The new index contains several other notable differences compared to the old.

The old index allocates 40% of its weight to an equally weighted basket of “bellwether” companies (established leading players whose core business is directly related to robotics and automation) and 60% is allocated to equally weighted basket of “non-bellwether” companies (those players with a ‘distinct’ portion of their revenue in robotics and automation).

The new index identifies those companies that derive revenue from at least one of four sectors – industrial robots and automation; unmanned vehicles and drones; non-industrial robotics; and artificial intelligence. The index seeks to select the largest 100 firms deriving greater than 50% of their revenue from the above sub-themes.

If 100 ‘pure-play’ robotics and artificial intelligence companies cannot be found, the index will select the largest ‘quasi-play’ robotics and artificial intelligence firms – those deriving more than 10% but less than 50% of their revenue from the above sub-themes – until the index contains 100 constituents. The index is weighted by market cap with a limit of 8% per issuer applied. Additionally, the aggregate weight of all the components with weight greater than 5% is capped at 40%.

The ETF remains listed on the Toronto Stock Exchange but will trade under new ticker symbols – RBOT CN (in Canadian dollars) and RBOT.U CN (in US dollars). The ETF will still hedge the US dollar value of its portfolio to the Canadian dollar at all times.

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