ETF Sage
Canadian ETF knowledgebase
The investment objective for Horizons Gold Yield ETF ("Horizons HGY") is to provide Unitholders with:
The level of covered call option writing to which Horizons HGY is exposed may vary based on market volatility and other factors.
Horizons HGY seeks to achieve its investment objectives by gaining exposure to a portfolio of securities and other instruments that provide exposure to the price of gold bullion (the "Gold Portfolio").
Horizons HGY will enter into a forward purchase and sale agreement (the "Gold Forward Agreement") with a Canadian chartered bank (the "Bank Counterparty") pursuant to which it will gain exposure to the Gold Portfolio.
The Gold Portfolio is comprised primarily of exchange-traded funds that are directly, or indirectly, and only, exposed to gold bullion ("Gold Bullion ETFs"), but may include gold futures contracts from time to time.
The Gold Portfolio is held by the Gold Yield Trust and is managed and advised by the Investment Manager.
The Gold Yield Trust seeks to be fully exposed to the price of gold bullion at all times, but does not replicate the performance of gold prices due to the covered call writing strategy and fees and expenses.
The Investment Manager will, depending on market conditions, write at-the-money or out-of-the-money covered call options on approximately, and not more than, 33% of the securities in the Gold Portfolio.
This fund has an active management mandate (), not passive ().
The fund's benchmark () is:
The Fund utilizes a Forward Agreement structure to gain exposure to the target portfolio.
Be aware that the forward structure adds additional costs to the ETF. These costs are not included in the MER.
Fundamentals | |
---|---|
Category (main) | Active Commodity (Gold) and Covered Calls |
Category (other) | Active Commodity (Gold) & Covered Call |
Underlying Index | No Index |
ETF Structure | Active management. No index |
Asset Class | Commodity (Gold) and Options (Covered Calls) |
Region | - |
Issuer | Horizons ETFs (Canada) |
ETF Home Page | Available here |
Fund Facts | |
---|---|
Inception Date | Dec 20, 2010 |
Total Holdings | Unknown |
Distribution Frequency | Monthly |
Leverage | None |
Significant Currency Exposure | Yes |
Currency Hedging | Yes |
Fees | |
---|---|
Management Fee | 0.60% |
Management Expense Ratio (MER) | 1.44% * |
Forward Structure Costs | 0.45% |
* 2011
Trading Information | |
---|---|
Ticker | HGY |
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.
To view the TSX or Morningstar fund page for this ETF click on the Fund Data menu tab or below:
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.
SPDR US includes a wealth of data on the SPDR Gold Trust ETF.
iShares US includes a wealth of data on the iShares Gold Trust ETF.