Black Swan ETFs hit the market

Horizons Exchange Traded Funds Inc., along with its affiliate, AlphaPro Management Inc., both based in Toronto, have introduced two new exchange-traded funds (ETFs) that will provide investors with the opportunity to gain exposure to North American stock market indices while providing protection from sudden and significant market declines. Horizons Universa Canadian Black Swan ETF and Horizons Universa U.S. Black Swan ETF will pair a “tail risk hedge” strategy with an equities index investment. Horizons Universa Canadian Black Swan ETF will provide investors with exposure to the performance of the S&P/TSX 60 index through a portfolio of equities and/or index funds. Horizons Universa U.S. Black Swan ETF will provide investors with exposure to the performance of the S&P 500 index through a portfolio of equities and/or index funds. Horizons Universa U.S. Black Swan ETF will trade in U.S. dollars and will not seek to hedge its exposure to the US$ back into the Canadian dollar. Both ETFs will provide an actively managed basket of put and call options that seek to provide protection from significant market declines over rolling one-month periods and to reduce the overall volatility of the funds’ returns. Santa Monica, Calif.-based Universa Investments LP will subadvise on the Black Swan ETFs. Universa Investments is an investment-management firm that specializes in convex tail hedging and investing. In addition, Horizons, along with its affiliate, Horizons ETFs Management (Canada) Inc., has announced it will be terminating Horizons GMP Junior Oil and Gas IndexTM ETF, effective at the close of business on Friday, Aug. 10.

Compiled by Clare O’Hara (cohara@investmentexecutive.com).