TORONTO – April 22, 2020 – In connection with the ongoing extreme market volatility in crude oil futures markets, Horizons ETFs Management (Canada) Inc. (the "Manager") announces that the net asset values per share of the BetaPro Crude Oil 2x Daily Bull ETF (“HOU”) and the BetaPro Crude Oil  -2x Daily Bear ETF (“HOD”, and together with HOU, the “ETFs”) as at 2:30 p.m. (EST) today, when the exposure of the ETFs was changed in the manner described in the press release issued earlier this morning and below, are estimated to be approximately $0.51 per share for HOU, and approximately $16.30 per share for HOD.

Temporary Management Fee Reduction of HOU

The ETFs pay annual management fees (each, a “Management Fee”) to the Manager equal to an annual percentage of the net asset value of that ETF, together with applicable sales tax, calculated and accrued daily and payable monthly in arrears. The Manager is pleased to announce a 40 basis point (0.40%) rebate on the annual management fee of HOU that will be effective April 23, 2020, and will remain in effect until further notice. During this rebate period, the annual management fee of HOU will be 75 basis points (0.75%) plus applicable sales taxes.

There is no change to the annual management fee payable by HOD, which will remain at 1.15% of net asset value.

Temporary Name Changes

The Manager announces that it will temporarily change the names of the ETFs as set forth below, which will take effect as soon as reasonably practicable, and which name changes are intended to reflect the temporary reduced leverage exposure of each ETF (as described below).

Previous ETF Name New ETF Name
BetaPro Crude Oil 2x Daily Bull ETF BetaPro Crude Oil Daily Bull ETF
BetaPro Crude Oil -2x Daily Bear ETF BetaPro Crude Oil -1x Daily Bear ETF
 

The ticker symbols of the ETFs will remain the same.

The Manager also confirms the following changes to the ETFs announced earlier today:

Additional Changes Affecting the ETFs (Previously Announced)

As stated in our press release earlier today, we announced that due to the volatility in the crude oil markets, negotiations with the ETF’s counterparties, and the resulting changes to the ETF’s operations, the Manager no longer expects HOU or HOD to meet their stated investment objectives after 2:30 p.m. (EST) today.

Temporary Reduction of Leverage (as of  2:30 p.m. (EST) today) (Previously Announced)

As stated in our press release earlier today, we announced that effective at 2:30 p.m. (EST) today, it is anticipated by the Manager that the daily performance of HOU and HOD will endeavour to correspond to one-times, and minus one-times (inverse), respectively, the daily performance of its underlying exposure based on an amended rolling methodology described below. Accordingly, neither HOU nor HOD will provide two-times leveraged exposure or two-times inverse (opposite) leveraged exposure until further notice.

Confirmation of Amended Rolling Methodologies (as of 2:30p.m. (EST) today)

As stated in our press release earlier today, we announced that commencing at 2:30pm (EST) today, 100% of the underlying exposure of the ETFs was rolled to the July futures contract. Subsequently, and until further notice, it is anticipated that the monthly roll dates for HOU and HOD for 100% of the primary futures contract will occur on the 10th trading day of each month (instead of the 10th trading day of each primary futures contract, as announced earlier this morning). For example, following today’s roll to the July futures contracts and based on the amended roll dates, 100% of underlying exposure to the July futures contract would be expected to roll to the August secondary futures contract on May 14, 2020, and subsequently 100% of underlying exposure to the August futures contract would be expected to roll to the September secondary futures contract on June 12, 2020, (being the 10th business days of those respective months).

Continued Suspended Subscriptions (commenced April 21, 2020)

On April 21, 2020, the Manager announced it will not be accepting new subscriptions for shares of HOU or HOD until further notice. Accordingly, the Manager anticipates that purchases of new shares of the ETFs at the available offer prices on the secondary market are not expected to be reflective of the underlying net asset values per share. It is imperative to note that shares of the ETFs have and are expected to continue to trade at premiums to their net asset values while subscriptions of shares are suspended. Redemptions will continue to be accepted in the normal course.

The Manager also anticipates that the ETFs will be able to re-open to new subscriptions when the extreme market volatility in crude oil futures markets subsides and when it is able to obtain additional underlying exposure for the ETFs in the normal course.

An investment in shares of the ETFs involves certain risks, including as a result of the foregoing changes.  Investing in shares of the ETFs can be speculative, can involve a high degree of risk and may only be suitable for persons who are able to assume the risk of losing their entire investment.  Potential investors in these ETFs are reminded to read the prospectus, as amended from time to time, and all information available on www.sedar.com before investing. Investors should continue to monitor their investment daily and note that the ETFs are no longer expected to achieve their stated investment objective for the reason set forth above.

The Manager will advise as soon as there are any further developments with respect to the ETFs. A prospectus amendment that reflects the changes set out above will be filed following the date of this press release, and will be available at www.sedar.com or the Manager’s website at www.horizonsetfs.com.

For all inquiries, please contact:
Horizons ETFs at 1-866-641-5739 (toll-free) or (416) 933-5745
info@horizonsetfs.com

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Horizons ETFs Announces Temporary Changes to the BetaPro Crude Oil 2x Daily Bull ETF and BetaPro Cru

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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 include our BetaPro products (the “BetaPro Products”). The BetaPro Products are alternative mutual funds within the meaning of National Instrument 81-102 Investment Funds, and are permitted to use strategies generally prohibited by conventional mutual funds: the ability to invest more than 10% of their net asset value in securities of a single issuer, to employ leverage, and engage in short selling to a greater extent than is permitted in conventional mutual funds. While these strategies will only be used in accordance with the investment objectives and strategies of the BetaPro Products, during certain market conditions they may accelerate the risk that an investment in shares of a BetaPro Product decreases in value. The BetaPro Products consist of our 2x Daily Bull and 2x Daily Bear ETFs (“2x Daily ETFs”), Inverse ETFs (“Inverse ETFs”) and our BetaPro S&P 500 VIX Short-Term Futures™ ETF (the “VIX ETF”). Included in the 2x Daily ETFs and the Inverse ETFs are the BetaPro Marijuana Companies 2x Daily Bull ETF (“HMJU”) and BetaPro Marijuana Companies Inverse ETF (“HMJI”), which track the North American MOC Marijuana Index (NTR) and North American MOC Marijuana Index (TR), respectively. The 2x Daily ETFs and certain other BetaPro Products use leveraged investment techniques that can magnify gains and losses and may result in greater volatility of returns. These BetaPro Products are subject to leverage risk and may be subject to aggressive investment risk and price volatility risk, among other risks, which 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 futures index or benchmark (the “Target”) for a single day. Each Inverse ETF seeks a return that is –100% of the performance of its 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, particularly in the case of the 2x Daily ETFs, possibly direction from the performance of their respective Target(s) for the same period. Hedging costs charged to BetaPro Products reduce the value of the forward price payable to that ETF. Due to the high cost of borrowing the securities of marijuana companies in particular, the hedging costs charged to HMJI are expected to be material and are expected to materially reduce the returns of HMJI to unitholders and materially impair the ability of HMJI to meet its investment objectives. Currently, the manager expects the hedging costs to be charged to HMJI and borne by unitholders will be between 10.00% and 45.00% per annum of the aggregate notional exposure of HMJI’s forward documents. The hedging costs may increase above this range. The manager will publish, on its website, the updated monthly fixed hedging cost for HMJI for the upcoming month as negotiated with the counterparty to the forward documents, based on the then current market conditions. The VIX ETF, which is a 1x ETF, as described in the prospectus, is a speculative investment tool that is not a conventional investment. The VIX ETF’s Target is highly volatile. As a result, the VIX ETF is not intended as a stand-alone long-term investment. Historically, the VIX ETF’s Target has tended to revert to a historical mean. As a result, the performance of the VIX ETF’s Target is expected to be negative over the longer term and neither the VIX ETF nor its target is expected to have positive long-term performance. Investors should monitor their holdings in BetaPro Products and their performance at least as frequently as daily to ensure such investment(s) 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.