Horizons Gold Yield Fund has closed its the initial public offering of 4.6 million class A units and approximately 0.4 million class F units for gross proceeds of more than $50.3 million, AlphaPro Management Inc. said Monday.

The class A units began trading Monday on the Toronto Stock Exchange under the symbol HGY.UN. The fund has also granted the agents an over-allotment option to acquire additional class A units exercisable at any time during the next 30 days.

AlphaPro is the manager and trustee of the fund and its affiliate JovInvestment Management Inc. is the fund’s investment manager, responsible for implementing investment strategies.

The fund’s investment objectives are to provide unitholders with exposure to the price of gold bullion hedged to the Canadian dollar, less the fund’s fees and expenses, and tax-efficient monthly distributions, initially expected to be $0.0542 per unit ($0.65 per year to yield 6.5% on the issue price of $10.00 per unit).

It is initially expected that monthly distributions received by investors will consist primarily of return of capital.

The fund was created to offer investors a low cost exposure to the price of gold bullion, while providing monthly, tax-efficient distributions. The fund will seek to achieve its investment objectives by using the net proceeds of the offering to gain exposure to a portfolio consisting of securities and other instruments that provide exposure to the price of gold bullion. The gold portfolio will be managed by JovInvestment Management Inc. JovInvestment intends to write at-the-money covered call options on approximately, and not more than, 33% of the securities in the gold portfolio. JovInvestment will not manage the call option writing strategy to achieve a specific target return, but will manage it to generate attractive option premiums that temper the volatility associated with owning a portfolio of securities that provide exposure to the price of gold bullion

“We are extremely pleased with the response to our latest offering from Horizons AlphaPro as we believe gold has been one of the best asset classes to be invested in over the last decade,” said Ken McCord, president of AlphaPro, in a release. “The Horizons Gold Yield Fund offers a strategy that allows investors to receive the benefits of exposure to gold bullion, while at the same time earning a tax-efficient monthly yield.”

The syndicate of agents for the offering is being led by BMO Capital Markets, CIBC and National Bank Financial Inc. and includes, RBC Capital Markets, Scotia Capital Inc., Canaccord Genuity Corp., HSBC Securities (Canada) Inc., GMP Securities L.P., Raymond James Ltd., Dundee Securities Corporation, Mackie Research Capital Corporation, Macquarie Private Wealth Inc., MGI Securities Inc., Rothenberg Capital Management Inc. and Wellington West Capital Markets Inc.

The fund is expected to automatically convert into an actively managed exchange traded fund by no later than July 30, 2012.

IE