Toronto-based Horizons ETF Management (Canada) Inc. has launched a new exchange-traded fund (ETF), Horizons Active US Dividend ETF.

The new, actively managed ETF looks to provide regular dividend income and modest long-term capital growth by investing in high-quality dividend paying U.S. companies or companies that have a substantial presence in the U.S.

The fund will be sub-advised by Toronto-based Guardian Capital LP, which uses a proprietary stock selection process to build diversified portfolios that seek to outperform the S&P 500 index.

Guardian Capital’s GPS Stock Selection Process targets a diversified set of stocks with different growth and yield characteristics. It looks for “dividend achievers,” which are high growth, early stage companies with low dividend yields; “dividend growers,” which are steady growth companies with moderate yields; and “dividend payers,” defined as mature, low growth companies that provide high dividend yields.

This approach has an advantage over traditional U.S. dividend strategies in that it provides sector diversification beyond the traditional “dividend rich” sectors, says Howard Atkinson, president of Horizons ETFs.

For example, investors will have exposure to the U.S. technology sector, which has historically been a key driver of U.S. stock market performance, but not traditionally considered a “dividend-rich” sector, notes Atkinson.

“We believe that this gives investors a good balance of dividend yield, while also giving them exposure to the performance of the broad U.S. stock market,” he says.

Lead portfolio management responsibilities will be assumed by Guardian Capital’s Srikanth Iyer, managing director and head of systematic strategies, and Fiona Wilson, portfolio manager.

Class E (TSX:HAU) and Advisor Class (TSX:HAU.A) units of Horizons Active US Dividend ETF began trading on the Toronto Stock Exchange on Wednesday.