Toronto-based Horizons Exchange Traded Funds Inc. is offering offering a two basis point (or 0.02%) rebate on Horizons S&P/TSX 60 Index ETF’s (TSX:HXT) annual management fee, effective immediately.
Horizons says the rebate will remain in effect for at least 12 months, and during that time the effective annual management fee investors will pay on HXT will be reduced from seven basis points (or 0.07%) to five basis points (or 0.05%), plus applicable sales taxes.
With the rebate, HXT will continue to be the lowest cost Canadian-listed ETF, less than half the cost of any other S&P/TSX 60 Index ETF in Canada, and the lowest cost Canadian stock index ETF in the world, Horizons says.
Launched in September of 2010, HXT seeks to replicate the performance of the S&P/TSX 60 Index (Total Return), net of expenses. The index is comprised of the 60 largest Canadian stocks and represents approximately 73% of the market capitalization of the Canadian stock market.
All other things being equal, a lower management fee should enhance the potential return of an investment. Horizons ETFs expects this reduction in HXT’s management fee to further enhance its ability over the next 12 months to, even more closely, deliver the returns of the S&P/TSX 60 Index on a total return basis.
“Time and time again, studies have shown that keeping investment costs low is a key component to improving portfolio performance. With some online brokerages now waiving commissions on HXT, you could potentially own $1,000 of HXT units for an all-in annual cost of approximately $0.56 or 56 cents,” says Howard Atkinson, CEO of Horizons ETFs.