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Horizons Enhanced Income Financials ETF - HEF

ETF Overview

The investment objective of HEF is to provide unitholders with:

HEF will invest primarily in a portfolio of equity and equity related securities of Canadian companies that are primarily exposed to Canadian banking, finance and financial services sectors and that, as at each semi-annual rebalance date, are amongst the largest and most liquid issuers listed on the TSX in their sector.

HEF will rebalance, on an equal weight basis, the portfolio of constituent securities on each semi-annual rebalance date.

To mitigate downside risk and generate income, HEF will generally write covered call options on 100% of the portfolio securities. The level of covered call option writing may vary based on market volatility and other factors.

Active Management

This fund has an active management mandate (), not passive ().

The fund's benchmark () is:

Key ETF Data

Fundamentals
Category (main) Active Canadian Equity Income (large cap) and Covered Calls: Financials Sector
Category (other)Active Equity & Covered Call - Financials Sector
Underlying Index No Index
ETF Structure Active management. No index
Asset Class Equity (large cap) and Options (Covered Calls) - Financials Sector
Region Canada
Issuer Horizons ETFs (Canada)
ETF Home Page Available here
Fund Facts
Inception Date May 16, 2011
Total Holdings Unknown
Distribution Frequency Monthly
Leverage None
Significant Currency Exposure No
Currency Hedging Not applicable
Fees
Management Fee 0.65%
Management Expense Ratio (MER) 0.80% *

* 2012, 2011 (0.82%)

Trading Information
Ticker HEF
Exchange TSX (Toronto Stock Exchange)
Currency CAD
Eligibility
Eligibility * RRSP, RRIF, RESP, TFSA, DPSP, RDSP
DRIP available ** Yes
PACC Plan available ** Yes
SWP available ** Yes

* Always check eligibility with your plan operator as plans and accounts can differ

** Not all brokers can facilitate these plans. Check with your broker.

Current Price, Fund Performance, Yield, NAV, Charts etc

To view the TSX or Morningstar fund page for this ETF click on the Fund Data menu tab or below:

ETF at TMX ETF at Morningstar

ETF Analysis

Covered Call Strategy ETFs typically have a dual strategy: they try to replicate the returns of an index, and sell covered call options on some/all of their holdings.

The upside of selling covered call options is that the fund earns a premium for each option sold. The downside is that the upside potential of the ETF is limited due to the covered call option selling.

Before buying an ETF that uses a covered call strategy ensure you understand how such strategies work, and are comfortable with its advantages, risks and limitations.

Options are a somewhat complex financial instrument. They are relatively easy for some investors to understand, difficult for others. Since Covered Call Strategy ETFs use options, it would be wise to understand how they work before investing in any Covered Call Strategy ETFs.

Also understand the amount (if any) of Return of Capital the fund may pay out with distributions. ROC payments reduce your holding's capital.