TORONTO – July, 30, 2020 – Horizons ETFs Management (Canada) Inc. (“Horizons ETFs” or the “Manager”) is pleased to announce the successful corporate class reorganization of the Horizons Global Risk Parity ETF (“HRA”) into the Horizons ReSolve Adaptive Asset Allocation ETF (“HRAA”), a new class of shares of Horizons ETF Corp. (“Horizons MFC”), a multi-class mutual fund corporation managed by the Manager. Shares of Horizons ReSolve Adaptive Asset Allocation ETF trade on the Toronto Stock Exchange (“TSX”) under the ticker HRAA.

At a special meeting of unitholders of HRA (the “Meeting”) held on July 14, 2020, unitholders approved all matters related to the merger (the “Merger”) of HRA into HRAA. Within the corporate class structure, although the value of any net interest income from the settlement of any derivatives will be reflected in the net asset value (“NAV”) of HRAA, investors in HRAA are not expected to receive any taxable distributions.

HRAA’s investment objective is to seek long-term capital appreciation by investing, directly or indirectly, in major global asset classes, including, but not limited to equity indexes, fixed income indices, interest rates, commodities and currencies. HRAA provides exposure to these major global asset classes through derivatives and securities, including futures contracts and forward agreements. For purposes of applicable securities legislation, HRAA is an alternative fund, and accordingly, is permitted to use up to 300% leverage in seeking to achieve its investment objectives. HRAA is sub-advised by ReSolve Asset Management Inc., the same sub-advisor that was employed by HRA prior to the Merger.

HRAA further expands our growing line-up of alternative ETFs and this reorganization enhances the ability of HRAA to take advantage of global opportunities while still holding risk parity as a cornerstone of its mandate,” said Steve Hawkins, President and CEO of Horizons ETFs. “I am confident that with the ReSolve team’s seasoned quantitative capabilities, and their use of advanced machine learning tools, HRAA will be well-positioned to navigate market volatility – particularly relevant given COVID-19’s recent impact on the global marketplace.”

HRAA uses a portfolio allocation strategy commonly known as risk parity. This is an approach that seeks to ensure that each asset class in the portfolio contributes an equal amount of risk, thus creating optimal portfolio diversification. HRAA uses a quantitative process to dynamically measure the sensitivities of major asset classes to a set of common risk factors over changing market conditions. By considering asset allocation from the perspective of systematic risks, it aims to keep the portfolio’s target level of annualized volatility at or below 12% and reduce overall correlation to broader equity and fixed income markets.

HRAA represents the next evolution of the global asset allocation strategy that has been at the core of our investment thesis for more than a decade,” said Adam Butler, Chief Investment Officer of ReSolve Asset Management. “Not only will HRAA be empowered to react dynamically to all market conditions with greater conviction, it will also be able to provide tax-efficiencies through Horizons ETFs’ corporate class structure.”

HRAA will pay an annual management fee to the Manager equal to 0.85%. HRAA will also pay a performance fee to the Manager, if any, equal to 15% of the amount of out-performance of HRAA over its annualized benchmark threshold and high-water mark. Please read the prospectus for further details about HRAA.

About Horizons ETFs Management (Canada) Inc. (www.HorizonsETFs.com) 
Horizons ETFs Management (Canada) Inc. is an innovative financial services company and offers one of the largest suites of exchange traded funds in Canada. The Horizons ETFs product family includes a broadly diversified range of solutions for investors of all experience levels to meet their investment objectives in a variety of market conditions. Horizons ETFs has more than $14 billion of assets under management and 92 ETFs listed on major Canadian stock exchanges.

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

For media inquiries:
Contact Jonathan McGuire
External Communications Manager
Horizons ETFs Management (Canada) Inc.
(416) 640-2956
jmcguire@horizonsetfs.com
 
Commissions, management fees (including performance fees) and expenses may all be associated with an investment in Horizons ReSolve Adaptive Asset Allocation ETF (“the ETF”) managed by Horizons ETFs Management (Canada) Inc. The ETF is an alternative mutual fund within the meaning of National instrument 81-102 Investment Funds, and is permitted to use strategies generally prohibited by conventional mutual funds and ETFs, such as borrowing cash, selling securities short, and employing leverage of up to 300%, amongst others. The use of these strategies may accelerate the risk associated with the ETF. The ETF is not guaranteed, its values change frequently and past performance may not be repeated. The prospectus contains important detailed information about the ETF. Please read the prospectus and its risk disclosure before investing.

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Horizons ETFs Announces July 2020 Distributions for its Covered Call ETFs

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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 Daily Bull and Daily Bear ETFs (“Leveraged and Inverse Leveraged ETFs”), Inverse ETFs (“Inverse ETFs”) and our BetaPro S&P 500 VIX Short-Term Futures™ ETF (the “VIX ETF”). Included in the Leveraged and Inverse Leveraged 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 Leveraged and Inverse Leveraged 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 Leveraged and Inverse Leveraged ETF seeks a return, before fees and expenses, that is either up to, or equal to, 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 Leveraged and Inverse Leveraged 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 Leveraged and Inverse Leveraged ETFs, possibly direction from the performance of their respective Target(s) for the same period. For certain Leveraged and Inverse Leveraged ETFs that seek up to 200% or up to or -200% leveraged exposure, the Manager anticipates, under normal market conditions, managing the leverage ratio as close to two times (200%) as practicable however, the Manager may, at its sole discretion, change the leverage ratio based on its assessment of the current market conditions and negotiations with the respective ETF’s counterparties at that time. 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 publishes 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.

Horizons Total Return Index ETFs (“Horizons TRI ETFs”) are generally index-tracking ETFs that use an innovative investment structure known as a Total Return Swap to deliver index returns in a low-cost and tax-efficient manner. Unlike a physical replication ETF that typically purchases the securities found in the relevant index in the same proportions as the index, most Horizons TRI ETFs use a synthetic structure that never buys the securities of an index directly. Instead, the ETF receives the total return of the index through entering into a Total Return Swap agreement with one or more counterparties, typically large financial institutions, which will provide the ETF with the total return of the index in exchange for the interest earned on the cash held by the ETF. Any distributions which are paid by the index constituents are reflected automatically in the net asset value (NAV) of the ETF. As a result, the Horizons TRI ETF receives the total return of the index (before fees), which is reflected in the ETF’s share price, and investors are not expected to receive any taxable distributions. Certain Horizons TRI ETFs (Horizons Nasdaq-100 ® Index ETF and Horizons US Large Cap Index ETF) use physical replication instead of a total return swap. The Horizons Cash Maximizer ETF and Horizons USD Cash Maximizer ETF use cash accounts and do not track an index but rather a compounding rate of interest paid on the cash deposits that can change over time.

*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.