Horizons Announces December 2012 Distributions for its Covered Call ETFs
TORONTO, Dec. 19, 2012 /CNW/ - Horizons Exchange Traded Funds Inc. ("Horizons ETFs") and its affiliate AlphaPro Management Inc. are pleased to announce the distribution amounts per unit (the "Distributions") for certain of the Horizons ETFs family of exchange traded funds (the "ETFs"), for the 2012 tax year end, as indicated in the table below.
The ex-dividend date for the Distributions is anticipated to be December 27, 2012 for all unitholders of record on December 31, 2012. The Distributions will be paid in cash or, if the unitholder has enrolled in the respective ETF's dividend reinvestment plan (DRIP), reinvested in additional units of the applicable ETF, on or about January 11, 2013.
| ETF Name | Ticker Symbol |
Current Month Distribution Rate |
NAV Change from Prior Month(1) |
Current Month Yield(2) |
Prior Month Yield(3) |
Absolute Change in Yield from Prior Month(4) |
| Horizons Enhanced Income Equity ETF | HEX | $0.04978 | 1.41% | 8.05% | 8.25% | -0.20% |
| HEX.A | $0.04507 | 1.35% | 7.26% | 7.46% | -0.20% | |
| Horizons Enhanced Income Energy ETF | HEE | $0.04576 | -0.61% | 8.60% | 8.40% | 0.19% |
| HEE.A | $0.04183 | -0.67% | 7.81% | 7.61% | 0.20% | |
| Horizons Enhanced Income Gold Producers ETF | HEP | $0.05324 | -5.51% | 10.90% | 10.99% | -0.09% |
| HEP.A | $0.04915 | -5.57% | 10.11% | 10.20% | -0.09% | |
| Horizons Enhanced Income Financials ETF | HEF | $0.04835 | 1.83% | 6.90% | 7.32% | -0.42% |
| HEF.A | $0.04300 | 1.77% | 6.11% | 6.54% | -0.43% | |
| Horizons Enhanced Income International Equity ETF | HEJ | $0.05764 | 3.95% | 7.50% | 8.50% | -1.00% |
| HEJ.A | $0.05187 | 3.90% | 6.75% | 7.75% | -1.00% | |
| Horizons Enhanced Income US Equity (USD) ETF (5) | HEA.U | $0.09275 | 2.73% | 10.64% | 8.25% | 2.39% |
| HEA.V | $0.08587 | 2.67% | 9.85% | 7.46% | 2.39% | |
| Horizons Enhanced US Equity Income ETF | HES | $0.04952 | 2.72% | 6.89% | 7.01% | -0.13% |
| HES.A | $0.04385 | 2.66% | 6.10% | 6.25% | -0.15% | |
| Horizons Gold Yield ETF | HGY | $0.05128 | -2.93% | 6.72% | 6.75% | -0.03% |
| HGY.A | $0.04478 | -2.99% | 5.87% | 5.90% | -0.03% | |
| Horizons Silver Yield ETF | HZY | $0.03998 | -4.05% | 5.54% | 5.25% | 0.29% |
| HZY.A | $0.03385 | -4.11% | 4.69% | 4.40% | 0.29% | |
| Horizons Crude Oil Yield ETF | HOY | $0.04996 | 0.51% | 7.51% | 9.32% | -1.80% |
| HOY.A | $0.04431 | 0.44% | 6.67% | 8.47% | -1.81% | |
| Horizons Natural Gas Yield ETF | HNY | $0.21151 | -9.60% | 27.57% | 14.65% | 12.92% |
| HNY.A | $0.20493 | -9.66% | 26.73% | 13.80% | 12.92% |
(1) Based on the period November 21, 2012 to December 18, 2012, where the prior month's net asset value per unit is adjusted to include the prior month's distribution.
(2) Annualized and based on the applicable December 18, 2012 net asset value per unit which is available at www.horizonsetfs.com.
(3) Annualized and based on the applicable November 21, 2012 net asset value per unit which is available at www.horizonsetfs.com.
(4) The absolute change of the prior month's previously announced annualized distribution yield to the current month's annualized distribution yield.
(5) Distributions for Horizons Enhanced Income US Equity (USD) ETF are declared and paid in U.S. dollars.
Each ETF makes Distributions to unitholders based on the amount of call option premiums received during the month, along with any dividend income received, less expenses payable by the ETF. Call option premiums, and therefore the amounts distributed, tend to reflect the prevailing implied volatilities, either higher or lower. Should implied volatility levels increase in the future from current levels, it would be expected that call option premiums would generally, but not always, rise. Distributions will vary from period to period.
The following commentary is provided in respect of the December Distributions for the ETFs. Any discussion of implied volatility below is based on the average implied volatility of the nearest out-of-the-money call options on the underlying portfolio securities of the respective ETFs.
HEX / HEX.A
The slight decrease in the distribution yield for the current month, when compared to the prior month's distribution yield, reflects the decrease in the implied volatility of the constituents in this portfolio as well as greater option buyback costs in the financial and resource sectors over the past month.
HEE / HEE.A
The increase in the distribution yield for the current month, when compared to the prior month's distribution yield, reflects reduced option buybacks as a result of a decline in equities in the energy sector.
HEP / HEP.A
The marginal decrease in the distribution yield for the current month, when compared to the prior month's distribution yield, reflects the general decrease in the implied volatility of the equities in the gold sector that was partially offset by reduced option buyback costs in the portfolio over this past month.
HEF / HEF.A
The decrease in the distribution yield for the current month, when compared to the prior month's distribution yield, reflects a general decrease in the implied volatility of the constituents in the portfolio as well as greater option buyback costs due to an increase in equity prices in the financial sector over this past month.
HEJ / HEJ.A
The decreased distribution yield for the current month, when compared to the prior month's distribution yield, reflects greater option buyback costs as a result of an increase in international equities, in general, as well as lower implied volatilities.
HEA.U/HEA.V
The increase in the distribution yield of the ETF for the current month, when compared to the prior month's distribution yield, reflects the accumulation of gains throughout the calendar year that offset the increase in option buyback costs as well as the decrease in implied volatility over the past month.
HES/ HES.A
The decrease in the distribution yield of the ETF for the current month, when compared to the prior month's distribution yield, reflects a decrease in implied volatility and an increase in the option buyback costs over the past month.
HGY/ HGY.A
The relatively unchanged distribution yield for the current month, when compared to the prior month's distribution yield, reflects a lower realized implied volatility that was offset by a decrease in the price of gold bullion over this past month.
HZY/ HZY.A
The increase in the distribution yield, when compared to the prior month's distribution yield, reflects lower option buyback costs as a result of a decline in the price of silver bullion despite the little change in the implied volatility over this past month.
HOY/ HOY.A
The decrease in the distribution yield for the current month, when compared to the prior month's distribution yield, reflects a decrease in the implied volatility of the price of crude oil in addition to greater option buyback costs over this past month.
HNY/ HNY.A
The significant increase in the distribution yield for the current month, when compared to the prior month's distribution yield, reflects a general increase in the call option premium realized as well as a higher implied volatility in the price of natural gas over this past month.
For further information regarding the Distributions please visit www.horizonsetfs.com
Certain statements may constitute a forward looking statement, including those identified by the expression "expect" and similar expressions (including grammatical variations thereof) to the extent they relate to the ETFs. The forward-looking statements are not historical facts but reflect the ETFs, the ETF's managers or Horizons ETF's current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. These and other factors should be considered carefully and readers should not place undue reliance on the ETF's forward looking statements. These forward-looking statements are made as of the date hereof and the ETFs do not undertake to update any forward-looking statement that is contained herein, whether as a result of new information, future events or otherwise, unless required by applicable law.
Commissions, trailing commissions, management fees and expenses all may be associated with investments in the ETFs. The ETFs are not guaranteed, their values change frequently and past performance may not be repeated. Please read the prospectus before investing.
About Horizons Exchange Traded Funds Inc. (www.horizonsetfs.com)
Horizons ETFs is an innovative financial services company offering the Horizons ETFs family of ETFs. The Horizons ETFs family includes a broadly diversified range of investment tools with solutions for investors of all experience levels to meet their investment objectives in a variety of market conditions. With approximately $3.5 billion in assets under management and 79 ETFs listed on the Toronto Stock Exchange, the Horizons ETFs family makes up one of the largest families of ETFs in Canada. Horizons ETFs is a subsidiary of Horizons ETFs Management (Canada) Inc. and a member of the Mirae Asset Financial Group.
SOURCE: Horizons Exchange Traded Funds Inc.
Martin Fabregas, Investor Relations, (416) 601-2508 or 1-866-641-5739.
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