Quarterly rebalance includes a leading U.S.-based CBD producer

TORONTO – March 18, 2019 – Horizons ETFs Management (Canada) Inc. (“Horizons ETFs”) has completed the quarterly rebalance of the constituent holdings of the Horizons Marijuana Life Sciences Index ETF (“HMMJ:TSX”).

HMMJ is the world’s first ETF offering direct exposure to North American-listed securities that are involved with marijuana bioengineering and production. Once again, the ETF has added additional companies to its portfolio as more firms have become eligible for inclusion in its underlying index – the North American Marijuana Index.

The HMMJ portfolio recently expanded to include the following constituents:

Company Name Ticker Exchange
48North Cannabis Corp. NRTH TSX Venture Exchange
AgraFlora Organics International Inc. AGRA Canadian Securities Exchange
Cannara Biotech Inc. LOVE Canadian Securities Exchange
Charlotte’s Web Holdings, Inc. CWEB Canadian Securities Exchange
Flowr Corp. FLWR TSX Venture Exchange
Heritage Cannabis Holdings Corp. CANN Canadian Securities Exchange
ICC International Cannabis Corp. WRLD.U Canadian Securities Exchange
PharmaCielo Ltd. PCLO TSX Venture Exchange
Westleaf Inc. WL TSX Venture Exchange
Zenabis Global Ltd. ZENA TSX Venture Exchange
 

HMMJ is an index (or passively managed) ETF, which seeks to replicate, to the extent possible, the performance of the North American Marijuana Index, net of expenses. This index is designed to provide exposure to the performance of a basket of North American publicly listed life sciences companies with significant business activities in the Marijuana industry. The North American Marijuana Index selects from a current universe of companies that have operations that may include one or more of biopharmaceuticals, medical manufacturing, distribution, bio-products and other ancillary businesses related to the Marijuana industry.

HMMJ is the best-performing equity ETF in Canada, with a year-to-date return of 58.95%*, as at last Friday’s close,” said Steve Hawkins, President and CEO of Horizons ETFs. “As the number of listings and the market-capitalization of cannabis stocks continues to grow so dramatically, so too have the number of eligible issuers to be included in HMMJ. This is why the ETF has added 10 new names to its portfolio, bringing the total number of investee companies in HMMJ to 59.

Another key development in the Marijuana equity sector is that U.S.-domiciled companies that produce non-THC active hemp and CBD are now eligible for inclusion in HMMJ’s portfolio. This comes after changes to a U.S. federal law at the end of 2018, legalizing the cultivation and distribution of non-THC hemp-based products.

Tetrahydrocannabinol (THC) and cannabidiol (CBD) are the two primary cannabinoids that occur naturally in the cannabis plant. Unlike THC, CBD is non-psychoactive.

One of the major additions to HMMJ’s portfolio on this rebalance is Charlotte’s Web Holdings, Inc., a leading producer of legal CBD products in the United States, which is listed on the Canadian Securities Exchange (“CWEB:CSE”). Canopy Growth Corporation (“CGC:TMX”), is an example of a major Canadian marijuana producer that is actively establishing a presence in the now-legal U.S. hemp market.

According to a study by the Brightfield Group, the U.S. legal CBD industry alone could be worth USD $22 billion within the next two years, which puts that single market by itself at roughly the same target market size of the entire Canadian Marijuana industry,” said Mr. Hawkins. “This is another exciting growth market through which HMMJ can provide exposure, given the regulatory changes in the United States.

Rebalancing of the North American Marijuana Index, and consequently HMMJ, occurs each calendar quarter. At that point, all stocks eligible for inclusion are generally re-weighted by their respective market capitalization. The holdings of HMMJ and its current portfolio weights are regularly updated and available at www.HorizonsETFs.com/HMMJ.

Performance*

  1 Month 3 Months 6 Months YTD 1 Year Annualized Since Inception**
HMMJ 8.82% 47.31% 4.82% 58.95% 25.56% 59.58%
 

* Source: Morningstar Direct, as at March 15, 2019.
** Since HMMJ’s inception on April 4, 2017.
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 Horizons Marijuana Life Sciences Index ETF (the “ETF”) or returns on investment in the ETF.

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 $10 billion of assets under management and 86 ETFs listed on major Canadian stock exchanges. Horizons ETFs Management (Canada) Inc. is a member of the Mirae Asset Global Investments Group.

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

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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 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 units 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 15.00% and 35.00% 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.