Horizons Cdn High Dividend Index ETF (HXH:TSX)
ETF Snapshot
Name:
Horizons Cdn High Dividend
Index ETF
Launch Date:
April 8, 2016
CUSIP:
44053D105
Ticker:
HXH
Bloomberg Ticker:
SOLHXH
Management Fee:1
0.10%
Underlying Index:
Solactive Canadian High Dividend
Yield Index (Total Return)
Lower Fees, Lower Taxes, Higher Yield
Horizons Cdn High Dividend Index ETF (“HXH”) seeks to replicate the performance of
the Solactive Canadian High Dividend Yield Index (Total Return) — the “Index” — net of
expenses. The Index is designed to measure the performance of large Canadian-listed
equity securities that pay a dividend yield.
The Solactive Canadian High Dividend Yield Index (Total Return)
The Index is designed to provide exposure to 40 large cap, dividend paying stocks in Canada
• All stocks must have a minimum market cap of CAD$4 billion
• All stocks must pay regular dividends
The Index is divided into three industry groups – Energy, Financial Services and Diversified
(which includes all other Canadian sectors).
• No industry group can be larger than 33% of the portfolio
• No less than 5 and no more than 20 stocks will be represented for each industry group
• No single stock can have an index weighting that exceeds 9.5% of the total portfolio or
28.8% of its industry group classification
The Index is rebalanced annually and distributions are immediately reflected in the
value of the index.
Investment Manager:
Horizons ETFs Management
(Canada) Inc.
Key Features of HXH:
• Currently the lowest-cost Canadian Dividend ETF listed on the Toronto Stock Exchange
• Dividends automatically reflected in value of ETF - no need to set up a dividend
reinvestment plan
• Tax efficient, as the ETF is not expected to make taxable distributions
Distribution Frequency:
Annually (if any)
Indicative Top Ten Index Holdings
Eligibility:
All registered and non-registered
investment accounts
Security Name
Security Ticker
Index Weighting
BCE INC
BCE.TO
8.14%
SUNCOR ENERGY INC
SU.TO
7.62%
ROYAL BANK OF CANADA
RY.TO
7.01%
TORONTO-DOMINION BANK
TD.TO
6.60%
ENBRIDGE INC
ENB.TO
6.32%
TRANSCANADA CORP
TRP.TO
4.94%
CANADIAN NATURAL RESOURCES
CNQ.TO
4.80%
BANK OF NOVA SCOTIA
BNS.TO
4.77%
T.TO
3.95%
MG.TO
3.51%
TELUS CORPORATION
MAGNA INTL. INC.
Plus Sales Taxes.
1
Source: Horizons ETFs Management (Canada) Inc. As at March 31, 2016.
Innovation is our capital. Make it yours.
http://www.HorizonsETFs.com
Horizons Cdn High Dividend Index ETF (HXH:TSX)
Taxation on Canadian Equity ETFs
In a rising market, TRI ETFs should deliver greater compounded performance when compared to an index-tracking ETF that distributes
dividends on a quarterly or semi-annual basis.
The following example compares the tax impact on the returns of two Canadian equity ETFs that earn an annual dividend yield of
4.25% over one year. This example does not take into account any fees or expenses that would be associated with an ETF purchase.
Both ETFs are held by an Ontario resident investor in the fourth highest marginal tax bracket, who would have an income tax rate
of 46.41% in 2016.
The example also does not contemplate any commissions, fees or taxes that would result from a sale of the ETF units.
Tax Implications for Canadian High Yield Equity ETFs - Illustrative Example Only
Physically-Replicated ETF
HXH
Principal Investment
$100,000
$100,000
Market Return (0%)
$0
$0
Net Dividends of Constituents
$4,250
$4,250
Pre-Tax Total Portfolio Value
$104,250
$104,250
Taxes on Dividends (29.54%)**
$1,255.45
$0
Total Taxes Payable
$1,255.45
$0
Total After-Tax Portfolio Return
$102,994.55
$104,250
Difference in Return
-
1.22%
Return Loss due to Tax on Distributions
-1.26%
0%
The above illustrative example highlights the expected after-tax performance benefits of holding HXH versus another Canadian domiciled physically replicated Canadian equity ETF in a
non-registered account, assuming both ETFs earned/reflected a net 4.25% dividend yield and track the exact same universe of stocks. This example does not take into account any fees or expenses
of the ETFs, or any commissions fees or expenses that would be associated with the purchase or sale of the ETF units. The example also does not contemplate any sale of the ETF units or any
tax liability that would result. Both ETFs are held by an Ontario resident investor in the fourth highest tax bracket, who would have a marginal tax rate of 46.41%, and an effective
tax rate of 29.54% on eligible Canadian Dividends, in 2016.
To learn more, please visit www.HorizonsETFs.com/HXH
Horizons ETFs is a member of Mirae Asset Global Investments. Commissions, management fees and applicable sales taxes all may be associated with an investment in the Horizons Cdn. High Dividend Index ETF managed by
Horizons ETFs Management (Canada) Inc. (“the ETF”). The ETF is not guaranteed, its values change frequently and past performance may not be repeated. The prospectus contains important detailed information about the ETF.
Please read the prospectus before investing.
March 2016
A00772 04 16