Many investors are now looking to replace their traditional higher-fee funds with ETFs to meet their long-term investment goals. With the growing number of ETFs available in Canada, this can be a daunting task. So we asked PŮR Investing Inc. to design a series of model portfolios* to illustrate how one could build a portfolio using our ETFs.

The team at PŮR Investing Inc. believes that managing risk is a key driver in delivering long-term performance. With this in mind, here are six Horizons ETFs model portfolios selected based on a portfolio size of $100,000. Using target risk asset allocation, the portfolios below are rebalanced quarterly to best maintain the appropriate level of market exposure and to meet the investment objective.

PŮR Investing Inc.'s proprietary research assigns a "Risk Rating" number to each model portfolio. This risk number implies that in any twelve month period their expected maximum negative total return is this risk number, with a projected statistical probability of 99%. It also suggests that over an investing time horizon of approximately 10 years, there would be a 95% statistical probability that the lowest expected total return performance of the portfolio would be the return of all capital plus inflation. PUR cannot project the maximum upside total return potential of the portfolio.

*Model portfolios are not sold under a single ticker through a broker. Should you choose to replicate a model portfolio, it will require multiple trades to purchase the individual ETFs at the outset and at the quarterly rebalances.

  Conservative Moderate Aggressive Fixed Income Diversified Income Alternative
  Conservative Moderate Aggressive Fixed Income Diversified Income Alternative
RISK RATING 10 18 24 5 15 18
Bonds 56% 33% 11% 85% 27% -
Equities 39% 61% 76% - 29% -
Alternatives 5% 6% 13% - - 100%
Preferreds - - - 15% 8% -
Covered Call Equities - - - - 36% -
 

PŮR's approach to risk control is unique among private client managers. Portfolios are designed to consistently reflect an investor's risk requirements in all markets and to outperform their benchmarks by protecting capital in two ways: first, under normal market conditions, with volatility within historical averages, diversification is used to control risk; second, when volatility is historically high or low, PŮR uses a proprietary SmartRisk™ strategy. SmartRisk™ is a tactical asset allocation approach that automatically de-risks portfolios when markets are threatening (high volatility) and increases risk when volatility is low.

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The Horizons Model Portfolios (the "Model Portfolios"), provided by Horizons ETFs Management (Canada) Inc. (“Horizons ETFs”), and based on data research by PŮR Investing Inc., are hypothetical and designed to illustrate how Horizons Exchange Traded Products could be combined to create solutions for different needs. The Model Portfolios have been categorized in general terms and not for specific investors. The Model Portfolios and the information related to them do not constitute, and are not to be construed as, investment advice. Any investment or allocation decisions should be made with the advice of a qualified investment professional with respect to individual circumstances, preferences, risk tolerance, and after reading the relevant prospectuses. and Horizons shall not have any liability, contingent or otherwise, to any person or entity for the quality, accuracy, timeliness and/or completeness of information in, or related to, the Model Portfolios, or for delays, omissions or interruptions in the delivery of such information. Horizons ETFs makes no warranty, express or implied, as to the results to be obtained by any person or entity in connection with any use of the Model Portfolios and any data related thereto, or any components thereof, and is not liable for any action or decision made by you in reliance on this Website or the information contained therein. Horizons is not an advisor as to legal, taxation, accounting, regulatory or financial matters in any jurisdiction, and is not providing any advice as to any such matter. 

PŮR Investing Inc. ("PŮR") is a software development firm specializing in innovative strategies for investors, advisors and pension plans. For more information on the firm please visit www.purinvesting.com.

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Horizons ETFs is a Member of Mirae Asset Global Investments. Commissions, management fees and expenses all may be associated with an investment in exchange traded products managed by Horizons ETFs Management (Canada) Inc. (the "Horizons Exchange Traded Products"). The Horizons Exchange Traded Products are not guaranteed, their values change frequently and past performance may not be repeated. The prospectus contains important detailed information about the Horizons Exchange Traded Products. Please read the relevant prospectus before investing.

The Horizons Exchange Traded Products consist of the Horizons Index ETFs ("Index ETFs"), 2x Daily Bull and -2x Daily Bear ETFs ("2x Daily ETFs"), Inverse ETFs ("Inverse ETFs"), VIX ETFs (defined below) and active ETFs. The 2x Daily ETFs and certain other Horizons Exchange Traded Products use leveraged investment techniques that can magnify gains and losses and may result in greater volatility of returns. These Horizons Exchange Traded Products are subject to leverage risk and may be subject to aggressive investment risk and price volatility risk, which, where applicable, are described in their respective prospectuses. Each 2x Daily ETF seeks a return, before fees and expenses, that is either 200% or -200% of the performance of a specified underlying index, commodity or benchmark (the "Target") for a single day. Each Index ETF or Inverse ETF seeks a return that is 100% or -100%, respectively, of the performance of a Target. Due to the compounding of daily returns, a 2x Daily ETF's or Inverse ETF's returns over periods other than one day will likely differ in amount and possibly direction from the performance of their respective Target(s) for the same period. The Horizons Exchange Traded Products whose Target is the S&P 500 VIX Short-Term Futures Index™ (the "VIX ETFs"), one of which is a 2x Daily ETF and one of which is an Index ETF, as described in their prospectus, are speculative investment tools that are not conventional investments. The VIX ETFs' Target is highly volatile. As a result, the VIX ETFs are not generally viewed as stand-alone long-term investments. Historically, the VIX ETFs' Target has tended to revert to a historical mean. As a result, the performance of the VIX ETFs' Target is expected to be negative over the longer term and neither the VIX ETFs nor their Target are expected to have positive long term performance. Investors should monitor their holdings, as frequently as daily, to ensure that they remain consistent with their investment strategies.

*The indicated rates of return are the historical annual compounded total returns including changes in per unit value and reinvestment of all dividends or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. The rates of return shown in the table are not intended to reflect future values of the ETF or returns on investment in the ETF. Only the returns for periods of one year or greater are annualized returns.