On 28th July, Horizons AlphaPro began trading another new actively-managed ETF on the Toronto Stock Exchange called the AlphaPro Global Balanced ETF (HAA). This new fund will look to provide a consistent rate of return through current income and long-term capital growth, achieved by investing Canadian equities, income trusts and debt securities.
Horizons AlphaPro
On July 21st, two more actively-managed ETFs began trading, one in the US and one in Canada. AdvisorShares’ long-awaited WCM/BNY Mellon Focused Growth ADR ETF (AADR) debuted on the NYSE and became the first Active ETF to focus on a portfolio of American Depository Receipts (ADRs). In Canada, Horizons AlphaPro launched its 8th actively-managed ETF on the Toronto Stock Exchange, called the Horizons AlphaPro Global Dividend ETF (HAZ).
On July 15th, Horizons AlphaPro, the only issuer providing actively-managed ETFs in Canada, launched the first Canadian actively-managed fixed income ETF, in the form of the Horizons AlphaPro Corporate Bond ETF (TSX: HAB). AlphaPro originally filed for this ETF and two other active products – a global dividend ETF and a balanced ETF – just about a month back.
Reported by Bloomberg, BlackRock iShares – by far the largest issuer of ETFs in the world – is now seeking approval from the SEC for actively-managed ETFs “that would keep some of their assets undisclosed”. If such a modification to the Active ETF structure gets approved by the SEC, many issuers and managers would be much more comfortable in bringing strong active managers to the Active ETF space without fear for their strategies being front-run.
Horizons AlphaPro, the only company providing actively-managed ETFs in Canada, has filed to launch 3 new actively-managed ETFs and 1 more that is technically an index ETF, but where the index is equally weighted. The 3 Active ETFs are the AlphaPro Global Dividend ETF, AlphaPro Balanced ETF and AlphaPro Corporate Bond ETF. The index ETF being planned is the AlphaPro S&P/TSX 60 Equal Weight Index ETF.
HAV is an actively-managed ETF that invests in North American (primarily US) equities in order to achieve long-term capital appreciation and income. The sub-advisors, Patient Capital Management, utilize a value methodology to pick investments. The fund aims to purchase investments at favourable valuations, identified through research on company balance sheets, cash flows and management strength.
HAC is an actively-managed ETF that has a unique seasonal rotation investment strategy, developed by Don Vialoux and Brooke Thackray. It invests across equities, fixed income, commodities and currencies to achieve long-term capital appreciation. HAC’s investment methodology is dictated by a seasonal investment timeline which identifies industries, sectors and stock market segments that have done well historically in different months of the year.
More and more mutual fund players are starting to get interested in the Actively-Managed ETF space, but with the SEC reconsidering its moves before granting exemptive relief to new issuers, companies will be looking for ways to skip the line and jumpstart their Active ETFs before other competitors do. One such short cut that has been talked about is to convert existing actively-managed mutual funds into Active ETFs.
