To achieve Horizons HAD's investment objectives, the ETF's Sub-Advisor uses research on Canadian economic conditions and their impact on interest rates to select fixed income securities that, based on the Sub-Advisor's view, are believed to offer superior risk adjusted returns relative to passively managed Canadian bond indices. When the Sub-Advisor believes that interest rates will increase, the Sub-Advisor may choose securities with shorter terms and when the Sub-Advisor believes that interest rates will decrease, the Sub-Advisor may choose securities with longer terms.
Horizons HAD will be substantially invested at all times in a portfolio primarily composed of Canadian federal and provincial government bonds, Canadian corporate bonds and municipal bonds. Horizons HAD may also from time-to-time invest in foreign government, foreign government-backed and corporate bonds denominated in Canadian dollars and certain high quality asset-backed securities.
Horizons HAD will not invest in bonds denominated in currencies other than the Canadian Dollar.
Horizons HAD may from time to time also use both long and short futures contracts and forwards to manage its duration objective and hedge any resulting non-Canadian currency exposure to the Canadian Dollar.